| 920928 | |
| 24(1) | Glen Thornley |
| (613) 957-2101 |
Attention: 19(1)
April 9, 1992
Dear Sirs:
Re: Section 67.1 of the Income Tax Act (the "Act")
This is in reply to your letter of March 23, 1992 requesting a technical interpretation with respect to the application of section 67.1 of the Act and the interaction of that section with the Goods and Services Tax. ("GST") You present an example of a taxpayer who spends $100,00 for meals, plus $7.00 for GST. An input tax credit of 80% of the GST equal to $5.60 is ultimately received, leaving the taxpayer with a net cost of meals of $101.40 (100.00 + (7.00-5.60)).
You ask, and we confirm, that the taxpayer in your hypothetical example may claim as a deduction under section 67.1 of the Act, $81.12 being 80% of the net cost of $101.40.
We trust our comments will be of assistance to you.
Yours truly,
E. Wheelerfor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch