In yet another interesting legal battle involving Uber, the Ontario Court of Appeal has confirmed that even when a party overpaid on GST/HST, there is no right to recover that tax from the person or company that charged that tax.
This means the only redress is through the refund or rebate provisions in the Excise Tax Act ("ETA").
GST/HST Overpay
This case begins in Lewis v Uber Canada Inc., 2023, when the plaintiff claimed he, and many others, overpaid their taxes when ordering food using promotional discounts on the Uber Eats App. The plaintiff was asking the Ontario Superior Court of Justice to certify a class action suit against Uber.
Uber admitted that it had improperly taxed customers using the pre-discounted price rather than the post-discounted amount. This resulted in customers overpaying on GST!
However, the certification was denied under subsection 224(1) and section 312 of the ETA. Subsection 224.1 bars anyone, other than the government, from suing others for collecting taxes. Whereas section 312 states GST recovery is only allowed within the confines of the statute which then prohibits any suing claims outside the written tax laws.
As such, the plaintiff's GST overpayment could not be recovered by suing Uber. Instead, the Superior Court stated the preferential redress is the rebate mechanism in subsection 261(1) of the ETA. Subsection 261(1) allows Canadians to receive a rebate for GST/HST payments made in error or overpayments from the Minister of Revenue.
As the result, although the court clearly found that there was an undeniable GST overpayment, it did not give anyone the legal right to sue Uber in a class action!
Appeal Denied
Recently in Lewis v Uber Canada Inc., 2024, Ontario Court of Appeal dismissed an appeal for the previous decision citing that the Superior Court properly interpreted ETA subsection 224.1 and section 312 in finding that the plaintiff was barred from suing Uber for the GST overpayment.
Uber also received $25,000 in costs, which shows the price tag of pursuing action against the wrong parties for GST overpayments!
Takeaways
If you overpay on GST/HST, even if a company improperly taxed you, the only recourse is pursuing the rebate scheme in the ETA.
Unfortunately, these provisions are very difficult to understand, and can be complicated to pursue, but professional advice can assist!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
