Forum Discussion
Inquiry Regarding GST Calculation on Bill Credits
The answer I am referring to is the one you give in this very website about the way Telus reduces the face value of bill credits by GST application.
If you're going to claim this is mandated b...
TELUS_Support
Official Support Team
Official Support TeamWhen TELUS applies bill credits to an account, they are treated as promotional incentives, not point-of-sale price reductions and under current CRA guidance, GST is applied to the full service amount before the credit is deducted. In other words, we are required to calculate tax on the pre-credit value, because the credit is not reducing the base price of the service at the time of purchase, but rather applied afterwards to the account balance.
The key distinction lies in how and when the credit is applied. According to CRA rules for telecommunications and invoicing (under the Excise Tax Act), discounts that are:
- Applied at the time of sale/invoicing = GST is applied to the reduced amount
- Applied post-sale, as a rebate or promotional credit = GST is still calculated on the original amount
You can read more in the CRA technical information bulletin B-103 regarding promotional allowances and the treatment of tax on incentives. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/b-103.html
Please, don't respond.
This will require multiple post-Presentation of a CRA Bulletin that is about establishment of location of service is deceptive. Regardless, CRA Bulletins are not the Excise Tax and hold no legal authority. While your change in application is one of two methods the Excise Tax affords. Your presentation for the change in method is intentionally deceptive and self serving. Second their is not a seperate 'Telecommunications' Excise Tax The Excise Tax (the actual law for GST states the provides the following (for clarity):
For businesses and consumers alike, understanding the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to various discounts and incentives can be a complex affair. The Canadian Excise Tax Act lays out specific requirements for how service amounts are treated for tax purposes, with significant distinctions between manufacturer coupons, promotional incentives, and rebates. These differences hinge on who is offering the discount, how it is redeemed, and the flow of funds between the parties involved.
At the heart of the matter lies the concept of "consideration," which the Canada Revenue Agency (CRA) defines as the total amount payable for a supply of property or a service. The application of GST/HST is directly tied to this value. Here’s a detailed breakdown of how each type of price reduction interacts with this principle.
