*GST Liability on Holdbacks or Partial Payments It’s normal practice in construction industry in Canada to have a certain percentage of invoice payable as "Holdback’ to fulfil terms of contract until expiry of agreed period to meet contingent liability, the contractor will have ,in event of non- performance, or non -compliance per agreed terms. For example if a contractor invoices the recipient of supply or services $100,000 On May 1,2008 due net 30days,and 10% of amount is on "Holdback" for an agreed period ( for example 2 years)and will be collected after expiry of period and contract terms having been satisfactorily fulfilled. Question arise on GST implication of these HoldBack amounts, particularly when amounts involved are significant. Are the contractors supposed to pay GST on these amounts even though they have not been collected or are uncollectable till a certain period Canada Revenue Agency has Memo (G300-6-7) for these partial payments . Memo adds that any sub...