The Supreme Court of Canada ruled that bankruptcy trustees, receivers and secured creditors can continue to collect the full amount of accounts receivable of a bankrupt supplier, including the Goods and Services Tax (GST) component, even if an amount remains owing by the supplier to the Canada Revenue Agency (CRA).

In a decision released today, the Supreme Court of Canada settled the ongoing controversy concerning the duty of a bankruptcy trustee, a receiver or a financial institution holding a security interest to remit to the tax authorities the GST and Québec Sales Tax (QST) included in the total amount of the accounts receivable of a bankrupt supplier, when the supplier is indebted to the tax authorities for unremitted GST or QST.

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