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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...
When 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
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
The following is clearly illogical and dishonest. I ask for a billing correction on my Mobility bill. I was charged $14.00 for the "service". GST is added to that amount so the amount owing is $14.70. Telus corrects my bill. However, instead of crediting me the $14.00, they credit me $13.33. The GST add-on brings the credit to $14.00. I was charged $14.70 but credited only $14.00. Why did I end up having to pay $0.70? It should have zeroed out.
