Excise Tax Act

Marginal note:Incorrect statement

194 For the purposes of this Part, where a supplier makes a taxable supply by way of sale of real property and incorrectly states or certifies in writing to the recipient of the supply that the supply is an exempt supply described in any of sections 2 to 5.3, 8 and 9 of Part I of Schedule V, except where the recipient knows or ought to know that the supply is not an exempt supply,

• (a) the tax payable in respect of the supply is deemed to be equal to the amount determined by the formula

  (A/B) × C

  where

  A

  is

  • (i) if tax under subsection 165(2) was payable in respect of the supply, the total of the rate set out in subsection 165(1) and the tax rate for the participating province in which the supply was made, and

  • (ii) in any other case, the rate set out in subsection 165(1),

  B

  is the total of 100% and the percentage determined for A, and

  C

  is the consideration for the supply; and

• (b) the supplier shall be deemed to have collected, and the recipient shall be deemed to have paid, that tax on the earlier of the day ownership of the property was transferred to the recipient and the day possession of the property was transferred to the recipient under the agreement for the supply.