An input tax credit, or ITC, recovers eligible GST/HST paid or payable on purchases used in commercial activities. It is claimed through the GST/HST return, separately from the income-tax deduction for an expense.
Follow one purchase from invoice to return
Start with the recipient and the registration period. Then ask what was acquired, whether GST/HST was actually payable, how the purchase supports commercial activity and whether the documents support the amount claimed. A payment labelled "business" in an app does not answer those questions.
Personal spending and purchases used to make exempt supplies generally do not qualify. Mixed use and restricted expenses need their own calculation. The claim must also be made within the applicable time limit. CRA's ITC eligibility guidance.
Consider a deliberately simple example: a registered designer using the regular method buys $200 of ordinary office supplies plus $26 Ontario HST, entirely for taxable design work. If all eligibility and documentation conditions are satisfied, the ITC is $26, not $226. The supplies cost and recoverable tax stay separate in the records.
Check the method and timing
Quick Method users generally cannot claim ITCs for operating expenses. Registration also does not automatically recover all taxes paid before the effective date; special rules apply to property on hand and some prepaid amounts.
Before filing, match the proposed claim to its invoice and period, check that it has not been claimed already, and resolve any missing information. A useful worksheet has columns for supplier, date, purchase, tax, eligible share and claim period.
If no GST/HST was charged or payable on a particular purchase, do not manufacture an ITC by multiplying its price by 13%. The tax treatment of the actual transaction controls.
Checked October 20, 2026. Next: invoice information and mixed-use purchases.
