Did you know we been charge extra on our billing with tax?

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Etown
Helpful Neighbour
Thanks for all posting everyone! Nothing wrong with a healthy discussion on how tax apply! I have yet hear a phone call back or email!  I hope maybe telus will see the posting and start fixing the issue!
From: TELUS Neighbourhood
Sent: Saturday, December 16, 2017 3:41 PM
To: terencelam21@gmail.com
Reply To: TELUS Neighbourhood
Subject: Re: Did you know we been charge extra on our billing with tax? (TELUS Neighbourhood Subscription Update)



Re: Did you know we been charge extra on our billing with tax? (TELUS Neighbourhood Subscription Update)
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Hi Etown,







BC1 (Just Moved In) posted a new reply in Internet, TV & Home Phone on 12-16-2017 05:41 PM :








Re: Did you know we been charge extra on our billing with tax?


I just spent two hours with Telus. Telus is calculating the tax based on the original price rather than the discounted price. 

 

My previous internet bill was $60 and reduced to $45 since September. The taxes are still calculated based on $60.

 

Companies charged customers GST on the full amount of the telephone bill before applying the billing credit, because they tried to claim input tax credits (ITCs) for the billing and reduced their expenses.

 

 - CRA's coupon rules (ETA paragraph 181(3)(b)) allows a company to claim ITCs for the tax fraction (for example, 13⁄113) of a coupon. However, the credits on the phone bill are NOT COUPON.

 

- CRA's rebate rules (ETA section 181.1) also allows a company to claim ITCs for the tax faction of a rebate. However, the credits are not rebate and they are simply a discount offered when customers signed up for a two-year plans.

 

Our tax system imposes tax on the value of the consideration for the supply, ensuring tax is exigible on the net consideration an end consumer pays. The companies charged tax before calculating the discount violate our tax acts. 

 

Talking to online customer representatives and phone representatives won't help.  I had tried to find an email address so I can email to Telus. But no, they don't have one. Hope the Telus employees can see the posts here and find a solution for us.

 



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BC1
Friendly Neighbour

For BC customers:

 

Home phone:

GST = (total home phone amount including long distance - 911 amount) X 5%

PST = Long distance amount X 7%  note: residential home phone base plan and 911 amount are not BC PST taxable 

 

Internet: 

Internet cost X 5% for GST and  7% for PST

 

TV: I don't use TV so I can't comment.

 

Mobile:  5% for GST and  7% for PST

 

The cost should be based on what we actually pay, i.e. after bundle discounts and credits. 

 

 

CBC1975
Just Moved In

Response I got from the Provincal Government

 

Thank you for your inquiry.

 

We are familiar with the situation you describe, as we have received e-mails from a number of other people with the same concern.

 

As background, there is an exemption from taxation under section 83 of the Provincial Sales Tax Exemption and Refund Regulation (PSTERR) for residential telephone services.  There is also an exemption for basic cableservices under section 84 of the PSTERR. However, please note that if you are purchasing Telus’ Optik TV that this will not qualify for the exemption for basic cable services, as Optik TV is delivered through an Internet connection. PST applies to the full purchase price of TV services provided through an Internet connection.

 

As discussed on page 5 of Bulletin PST 311 - Promotional Materials and Special Offers, if a vendor provides their own coupons or rebate offers (as is commonplace with e.g., grocery stores, with newspaper coupons), these reduce the purchase price for the goods (or in this case, services) being provided and on which PST is due. This reduction in the purchase price for goods or services is provided for by section 22 of the Provincial Sales Tax Act (PSTA). It seems likely that this is the type of discount Telus is providing you.

 

Only if the seller was receiving compensation from a third-party for the coupon accepted/rebate offer provided would the tax be calculated before deducting the value of the coupon/rebate offer, as per section 23(2) of the PSTA). It seems unlikely that this is the type of discount being applied by Telus. The application of discounts to telecommunication services, in particular, is discussed in more detail on pages 20-21 of Bulletin PST 107, Telecommunication Services.

 

In other words, these coupons/rebate offers being provided by Telus should, in all likelihood, reduce the “purchase price” for the telecommunication services being purchased, and should be deducted before calculating the tax due (assuming that Telus is not being reimbursed by a third party for the coupons/rebate offer).

 

It would appear, however, that Telus may be applying the PST to the initial price for all (or most) of the telecommunication services (other than those qualifying for exemption) before applying the credits/discounts (possibly after accounting for some apportioning of the discount between taxable and non-taxable services).  In other words, in effect, PST is being applied on (most of) the value of the discounts. This would be incorrect, assuming Telus is not receiving reimbursement from a third-party.

 

However, we are unable to conclusively determine what Telus is doing. It is advised that you contact Telus to get their complete explanation for their billing practices and how they are calculating the PST due.

 

If a person has paid PST in circumstances where they were not required to pay the PST, the supplier/service provider may refund the PST to their customer only if the refund is provided within 180 days of the date the PST was paid, upon presentation of the required documentation, if necessary. Otherwise, the person who paid the PST may apply to the Ministry for a refund using FIN 355 -- Application for Refund - General (PST) (and, if necessary, FIN 355 Schedule - Refund Claim Schedule (PST). In addition, please see Bulletin PST 400, PST Refunds.

 

Please note that refund claims must be received by the Ministry within 4 years of the date the tax was paid, and that the Ministry does not refund amounts of less than $10.00.

 

Please note that we can provide advice on the BC PST (and other BC consumption taxes) only. We cannot provide advice on the taxes of other jurisdictions, or the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST), as that is a federal tax on sales of goods and services. The Canada Revenue Agency (CRA) is responsible for administering the GST. For questions concerning the application of the GST, please visit the CRA's dedicated GST/HST web pages at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call the CRA at 1-800-959-5525.

 

More information on British Columbia’s PST can be found in our PST Bulletins and Notices. Our Forms Page contains exemptions certificates and forms related to registration, applying for a refund, and self-assessing the PST.

 

For additional information, including free interactive webinars, informational videos and upcoming events, please visit the PST Outreach webpage. To receive updates about legislative changes and new public information, please Subscribe To Receive Updates (click the button at the top right of the page and then put in your e-mail address on the “form”).

 

This correspondence describes how the Ministry interprets the relevant tax provisions for information purposes only. This response may be impacted by variations in circumstance, subsequent changes to legislation or subsequent court decisions. The Ministry is not responsible for updating this response if there are any subsequent changes to the law. This response is provided as an aid to understanding the legislation and is not intended to replace the legislation.

 

Rulings and Interpretations Team
Ministry of Finance
www.gov.bc.ca/consumertaxes

canucks4life
Ambassador

Perhaps this is why Telus is axing the Bundle discount they can't fix the billing system so we'd better remove the discount.

2cents
Just Moved In

I found the below link that may shed some light, but good luck trying to get the Telus management team to correct the charges.

 

https://forum.telus.com/t5/My-Home-Account/Telus-Charges-More-than-5-for-Federal-GST-November-25-201...

Parsian1
Neighbour

I am having this issue as well. After speaking with a Telus Rep, they are charging the GST on the pre-discounted price. I didn't think this was allowed, but the Telus Rep told me it was and that is what they are doing. 

 

Guess I need to read the tax code....

Parsian1
Neighbour

They are calculating the GST on the pre-discounted price. A Telus Rep confirmed this for me. She noted that this was legal and that it would continue. 

 

I guess I need to brush up on the tax code. Seems sleazy to charge tax on a price the customer isn't even paying....

Parsian1
Neighbour

After speaking with a Telus Rep, she noted that the GST is being charged on the pre-discounted price. When I questioned the legality of this, I was told it was legal and that it would continue this way. 

 

If anyone knows the tax code please comment. Seems unfair to charge GST on a price the customer isn't even paying. 

Etown
Helpful Neighbour
still haven't hear anything back yet

vishwa
Ambassador

I am writing this to update as I said I will.  Adam from Telus called me back as promised and explained what is happening.  He had spent a lot of time investigating this issue and his answer matches the observation on this thread.  Basically, if you look at your bill and there is a credit such as loyalty credit etc. and if there is a * in front of that, that is subject to GST. That is the way they calculate. If I calculated based on this new info, the number adds up right.

 

I had a few other(unrelated to tax) issues with my bill and Adam fixed them as well.  Overall, my experience with Telus has been great with respect to the quality of services but mixed when it comes to the interaction with the CSRs and I always felt that billing (notwithstanding the recent GST calculations) has been their Achilles heel--you make a small change and the system changes many things and you call back three more times to get it fixed. Adam fixed so many of those for me over the months and I would like say a Big Thanks to him publicly here. Interacting with someone like him will make me stay with Telus a lot longer for all my three services.

ashock
Just Moved In

I recently renewed my services with Telus and my new bill reflects the practice of charging tax before applying discounts. 

My bill from the previous month before renewal had credits that were applied before adding tax. 

The rep told me this is the way it is and it's how my bills will look like going forward, which does not make sense at all.

 

How can they charge tax on something I didn't pay for? Would also appreciate if someone was able to argue their way with Telus to charge tax on post discounted amount and the section referenced from the CRA to get this fixed. Just seems wrong what they're doing!

Lola
Rockstar

Lol @ the Rulings and Interpretations Team, Ministry of Finance -- some of the best long-winded gov-weaseling I've read in a long time.

KN1231
Neighbour

I too have been overcharged for both PST in BC and GST.  The link https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-gst... provides a good explanation between non-reimbursable and reimbursable coupons or discounts. Assuming Telus is not getting reimbursed by a 3rd party or manufacturer, they should be charging tax on only the net amount after discounts have been applied. 

 

I will log an issue with Telus, and if they refuse to correct the problem, I will contact the CRA. If anyone has any other ideas, thoughts, or solutions, please post. Thanks.

KN1231
Neighbour

Telus said that they differentiate between discounts and credits. I can see both on my statement. They calculate tax on the full price less discounts. Credits are applied afterwards. 

For example:

  • Original service amount $110
  • Less discount of $10
  • Equals $100
  • GST and PST in BC are calculated on the $100 to equal $5 and $7 respectively, for a total of $112
  • Credit of $15 is then applied
  • Customer owes $97

An accountant friend of mine said that this is legal and is at the discretion of every company as to if they consider a reduction to be a discount or a credit. The benefit to companies who do this is that they can report higher revenues, i.e. in this case $100 vs. $85 if they fully discounted the $25.

 

I have not contacted the CRA to verify this. If anyone does, please post.

BC1
Friendly Neighbour

@Lola wrote:

@Lol @ the Rulings and Interpretations Team, Ministry of Finance -- some of the best long-winded gov-weaseling I've read in a long time.



All I see is " PST is being applied on (most of) the value of the discounts. This would be incorrect ". 

BC1
Friendly Neighbour

@KN1231 wrote:

Telus said that they differentiate between discounts and credits. I can see both on my statement. They calculate tax on the full price less discounts. Credits are applied afterwards. 

For example:

  • Original service amount $110
  • Less discount of $10
  • Equals $100
  • GST and PST in BC are calculated on the $100 to equal $5 and $7 respectively, for a total of $112
  • Credit of $15 is then applied
  • Customer owes $97

An accountant friend of mine said that this is legal and is at the discretion of every company as to if they consider a reduction to be a discount or a credit. The benefit to companies who do this is that they can report higher revenues, i.e. in this case $100 vs. $85 if they fully discounted the $25.

 

I have not contacted the CRA to verify this. If anyone does, please post.


Telus can do whatever bookkeeping they want to make it look like a higher revenue, but they can't bill us tax for the price that we didn't pay for.

BC1
Friendly Neighbour

For GST rebate application, select Reason code 1C – Amounts paid in error, you can apply for rebate within two years after the day that you paid the amount in error.

 

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-re...

 

 

For PST (BC) refund, you can apply for rebate within four years after the day that you paid the amount in error.

 

https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/forms/fin-355-refund-general.pdf

 

 

BC1
Friendly Neighbour

For GST rebate application, select Reason code 1C – Amounts paid in error, you can apply for rebate within two years after the day that you paid the amount in error.

 

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-re...

 

 

For PST (BC) refund, you can apply for rebate within four years after the day that you paid the amount in error.

 

https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/forms/fin-355-refund-general.pdf

 

BC1
Friendly Neighbour

I posted here before why Telus wanted to charge tax on discounts. Companies used this way to claim a portion of the GST as input tax credit and reduce their costs. But these cases had been denied by the court before. Now Telus is doing it.

 

https://forum.telus.com/t5/Internet-TV-Home-Phone/Did-you-know-we-been-charge-extra-on-our-billing-w...

Lola
Rockstar

@BC1 wrote:

@Lola wrote:

@Lol @ the Rulings and Interpretations Team, Ministry of Finance -- some of the best long-winded gov-weaseling I've read in a long time.



All I see is " PST is being applied on (most of) the value of the discounts. This would be incorrect ". 


"PST is being applied on (most of) the value of the discounts. This would be incorrect, assuming Telus is not receiving reimbursement from a third-party."

 

You didn't see the rest.

Nicole-Natassha
Community Manager
Community Manager

Hi @Lola

Can I suggest you contact our Client Care team in regards to months where the tax calculation isn't correct on your invoice? We did previously have a billing issue for this that has since been closed and rectified. You can contact them at 310-2255

Lola
Rockstar

@Nicole-Natassha

 

I'm not having an issue. Smiley Very Happy Thank you for asking me though.

Nicole-Natassha
Community Manager
Community Manager

@Lola I need more coffee! My apologies!

 

@Victoria_ Mike that message was for you!

Telus-tax
Just Moved In

I did just that yesterday Monday 23 Jan 2018. Took an hour and I was told that since October 2017 Telus has been charging gst/pst on credits, and that it was not going to change. She also said that CRA had demanded the changes!

I intend to contact the CRA to get this verified today. If not the advise I was given  was to take Telus to court. Since that is most likely the only way to get them to address this. I am going to talk with my MLA first.

 

Etown
Helpful Neighbour
Awsome feedback and information! I will keep everyone update once I get update from Telus as well to see if that match.

Virus-free. www.avg.com

Etown
Helpful Neighbour

I wish someone will call me back! I'm glad Adam did! 

vishwa
Ambassador

@Etown: You are right.  I have been with Telus for decades.  I have talked to countless CSRs from various departments.  I have had so many people telling me they would call back but never did.  Adam has been unique and has called me back 3 times already as I had issues due to someone else screwing up my account/billing.  He fixed it so that I should be good till August.  He was gracious to extend my TV offer to coincide with internet so that I only have to make changes once. In addition, he promised to call back in April just to make sure everything is OK.  The best Telus CSR that I have interacted with.

On a related topic, my experience with Telus has been that anytime I make any changes(no matter how small) things have gone wrong.  These days I try to avoid making any changes but can't avoid it completely.  Thanks to Adam, from now on the TV and Internet are in sync. Good luck.

KN1231
Neighbour

Yes they can. I just spoke with the CRA's GST Technical Inquiries Department, and credits CAN be applied after tax is calculated (similar to gift cards). The catch is that this information needs to be in the customer agreement, which it is at the bottom of the following page: https://www.telus.com/en/bc/support/article/pst-telus-bill. It says that the credit includes the credit for the taxes as well.

As a customer though, this seems like a shady business practice, and I certainly never "agreed" to it.

KN1231
Neighbour

Sorry, meant to add that it seems shady in that it seems arbitrary as to what they deem to be a discount vs. what they deem to be a credit.

BellaKiki
Just Moved In

I'm new to this forum, but came across it after searching the internet on this exact issue.  After looking over my bills today, I noticed Telus has been charging me GST on my plan prior to the discount, since November 2017 when I made a change to my plan.  This is not how they display it on their invoices either.  They could easily get away with it if they changed how they showed the transaction on the statements.  No matter, this seems to be shady business practice on their part, nickel and diming their customers.  If you consider that there are many customers whom are not aware this is even taking place.  I've been chasing Telus for a better part of the day today, and was able to obtain a $0.25 credit for my most recent bill, but that was all they were willing to do and said that they escalate this issue. 

 

I then contacted CRA, whom was of no assistance and directed me to the CRTC, where I have made a complaint.  It will likely have no impact either as they see this as being a Revenue Canada issues since it pertains to GST charges.   Next stop, Better Business Bureau and Social Media.  Yes it's only $0.25 each month and nominal amount, but unfair to the consumer.