A careful reading of the policy suggests that Revenue's acceptance may be tempered by setting an unduly high standard to establish the defence. The onus of establishing that due diligence was exercised is on the claimant. Because the defence is fact-specific, the policy does not set out any criteria, but says that a person must demonstrate that he or she made a sincere and demonstrable attempt that a reasonably prudent person would have made in similar circumstances to comply with GST payment or remittance obligations. It appears that Revenue is of the view that an incorrect assumption based on genuine uncertainty regarding the application of the Act must have prevented compliance. For example, there is no defence if the failure arose because of computation errors or because of errors due to a failure to maintain adequate records.
Revenue says that there is no defence for late remittance and generally none for late payment.
Of the four examples in the policy, Revenue says that only one raises a sustainable defence. A number of steps are taken to determine the product's tax status, including contacting Revenue's local office, reviewing publications, and obtaining a professional opinion. The example suggests that the defence requires the taxpayer to make significant efforts and expenditures on professional fees. The TCC in Skylink Voyages commented that tax provisions should be drafted so that ordinary people can readily understand them without excessive expenditures of time or money. Overall, the policy is a helpful development.