Prospects of face masks firm related to Kevin Vuong may get tax refund

TORONTO —
Prospects who purchased a number of the a couple of million COVID-19 face masks offered by an organization related to Toronto’s unbiased MP Kevin Vuong could have paid an excessive amount of gross sales tax, and might be entitled to a refund, based on specialists contacted by CTV Information Toronto.

The corporate, Take Care Provide, offered its face masks and charged GST or HST after the federal government made such merchandise ‘zero-rated’ — basically gross sales tax-free — so now these prospects can ask for a refund from the corporate or the federal authorities itself, they stated.

“As a enterprise proprietor, you shouldn’t be charging that tax if it’s zero-rated,” stated Sanjeev Desai, a Chartered Skilled Accountant within the GTA.

One other CPA, Tiffany Stewart, advised CTV Information Toronto that her recommendation to the corporate can be: “Cease doing it instantly. Repair what’s occurring so the subsequent particular person isn’t subjected to that HST or GST cost.”

The corporate, Take Care Provide, sells material face masks made in Toronto for $15 every. Court docket information recommend the enterprise began with the pandemic, demand for his or her merchandise exploded, and the corporate had $7.5 million in income in 2020.

The corporate is a enterprise between businessman Larry Lau, designer Anna Marie Mountfort, and Kevin Vuong, who went on to turn into the MP for Spadina Fort York.

That was after Vuong had been dropped from the Liberal occasion amid revelations he’d been charged with sexual assault, a cost that was later withdrawn. Mountfort is now suing the opposite two, alleging she was unfairly minimize out of the enterprise. 

In November 2020, the federal authorities made many masks “zero-rated” — which makes their gross sales tax zero. Receipts examined by CTV Information present the corporate charged $1.95 on a masks offered in Ontario the place the province has HST, and 5 per cent GST in provinces that don’t have the tax-sharing settlement with the federal authorities.

Take Care Provide stated in an e mail its operations are in compliance with the CRA and it’ll proceed to gather the tax. 

It advised CTV Information Toronto in a press release that it reviewed standards set by the CRA and “determined out of an abundance of warning to observe the observe of trade leaders… all tax collected are remitted to the Canada Income Company. As such, per the Authorities of Canada, Canadians can file a rebate declare with the CRA if the quantity exceeds $2.”

It pointed to different corporations that additionally gather the tax. Many retailers examined by CTV Information don’t cost the tax, although some do. Specialists stated the refund may apply to prospects of any firm.

It’s not clear how a lot gross sales tax shoppers have been charged in 2021 by Take Care Provide. 

The federal government of Canada has a course of the place prospects can apply for a refund if it’s greater than $2. The HST on one $15 masks is $1.95 — slightly below the brink — so it’s as much as the retailer whether or not to refund the cash straight.

College of Toronto political science professor Nelson Wiseman says Vuong must be extra cautious than most as a result of he’s now a public determine and a member of the federal government that runs the CRA.

“He’s a public persona, so now different elements of his life can get mild shone on them,” Wiseman stated.

In the meantime, a petition demanding that Vuong resign now has greater than 5,000 signatures, and different Toronto-area political figures have referred to as for his resignation, together with Ontario Liberal chief Steven Del Duca and Ontario NDP MPP Suze Morrison.

Vuong is legally entitled to his seat, Wiseman stated, however he stated it’s unsure he has the assist of his driving on condition that many early voters had solid a poll earlier than he was ejected by the Liberal occasion. 

“The honourable factor for him to do can be to resign, and run in a by-election as an unbiased,” Wiseman stated.

The federal government of Canada introduced in November 2020 that, non-medical face masks may qualify for zero-rating if they’re designed for human use, they’re product of a number of layers of dense materials, they’re giant sufficient to utterly cowl the nostril, mouth and chin with out gaping, they’ve ear loops, ties or straps for securing the face masks or respirator to the top, they’re to be used in stopping the transmission of infectious brokers reminiscent of respiratory viruses, and they don’t have an exhalation valve or vent.

“If a buyer was charged GST/HST on these merchandise after December 6, 2020, they’ve two choices for recovering the GST/HST they paid,” stated a press release from CRA. “They’ll both go to the provider to get a refund or credit score of the quantity, [or] file a rebate declare with the Canada Income Company if the quantity exceeds $2.”