PST snafu leaves B.C. man out $3K after returning faulty vehicle

A Richmond, B.C. man has a $3,010 hole in his bank account after the provincial government denied his PST refund.

Dmitro Krasnogolov purchased a 2008 Chevrolet Corvette in May after finding it online at a car dealership in Calgary. Krasnogolov travelled to Alberta and after test driving the used vehicle, bought it.

Once he returned home to Richmond, he registered the car with ICBC and paid both his insurance and the $3,010 in PST that was owed to the provincial Ministry of Finance.

Krasnogolov didn't pay the tax in Calgary, because Alberta does not have a provincial sales tax.

A week later, there were problems with the sports car's engine and the new owner brought it into a garage.

A mechanic said the engine was not working properly and the dealership in Alberta took the vehicle back, paid to have it shipped across the provincial border and provided a full refund.

But when Krasnogolov requested a PST refund from the B.C. government, he was denied. 

"It's the just principle of it. You know, having a car for one week and it cost me $3,000. The worst thing is the federal government gave me back my GST no problem. The provincial government for some reason decided they would keep my money," said Krasnogolov.

No PST refund for out-of-province purchases

Only after reading more than 200 pages of provincial legislation did Krasnogolov find that section 125 of the tax law noted that PST refunds would only be issued for vehicles purchased in British Columbia. 

Last week, Krasnogolov was notified that his appeal of the decision has also been denied. 

"It was just such a shock, I didn't even expect something like that. I thought it was pretty straightforward. You send in the paperwork and they send you a cheque," he said. "When I was denied, it literally knocked the wind out of me, I was like seriously, for what reason."

He is speaking out because he wants others to know about the antiquated rule and is also considering taking the province to court in an attempt to get the refund. 

Government administrators' hands tied

The Ministry of Finance responded to the story with a statement. 

"Unfortunately government administrators do not have any discretion, as the legislation specifically sets out when PST refunds may be paid,"  the statement said. 

"There is no refund of PST permitted on vehicles purchased outside the province, brought into the province for use and then subsequently returned to the out-of-province seller."  

"Generally there are no refunds for goods brought or sent into British Columbia including where they are subsequently returned to the out-of-province seller. This is to limit the opportunity for tax avoidance, as our ability to verify out-of-province returns and other out-of-province transactions may be limited."