On April 28, 2010, the Canada Revenue Agency (CRA) issued Headquarter Letter (Ruling) No: 120360 in which it ruled that the taxpayer should be entitled to claim an input tax credit (ITC) for the amount of goods and services tax (GST) (can substitute HST here too) paid on the purchase of the goods for resale that were subsequently stolen from the taxpayer's store. The taxpayer would be required to meet the other ITC documentary requirements.
In this case, the taxpayer filed a claim for recovery against its insurance and the insurance company denied that portion of the claim that was GST because the insured taxpayer could recover those amounts by other means. This did not bother the CRA.
This is a fair ruling in the circumstances.
Other taxpayers should rely on CRA rulings at their own risk as their factual circumstances may be different. A taxpayer should seek a binding ruling from the CRA if they wish certainty.