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

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Helpful Neighbour

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

Hi Everyone

 

Have you check notice the charges on tax is wrong? we been getting charge extra for the past few months! If you haven't you should and let Telus hear your voice.  They told me was system error and should be resolve but they haven't.  You should double check especially if you live in Alberta. 

Etown

1 ACCEPTED SOLUTION
Friendly Neighbour

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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78 REPLIES 78

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.

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.

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.

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.

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.

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.

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

 

 

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...

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

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. 

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!

As an Alberta customer, my bills are much easier to decipher as the only tax should be 5% GST. Up until October, I was charged 5% GST on a $40 post-discount bill ($2). However, I recently changed plans and now my post-discount bill is $46, but I'm charged $3.55 GST, which is 5% of the non-discounted price of $71. It is my understanding, according to this CRA bulletin - https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/E/pub/gp/rc4022/rc4022-17e.pdf, - that GST must be calculated on the post-discount amount. When I brought the issue to a Chat rep, they told me a specialist would look into it and get back to me within 5 business days. They never did. When I searched the Telus website to escalate the issue, I ironically found a channel to do just that - https://www.telus.com/order/contact-us/en/escalates.jsp. Apparently, they must have a lot of unresolved issues to resolve. I was pleasantly surprised by the opportunity to get my issue resolved and wrote an email. That same day, I received a reply requesting I call in to have my issue addressed (oh Telus, how you love to play games...). I waited a few more weeks without anyone calling so I tried Chat once more. I explained the situation all over again and the Rep consulted with her support team. She argued that GST had been incorrectly calculated on my previous bills and that when I changed plans, their system somehow reset and the new method of calculating GST, based on the pre-discounted price, was correct. She offered me a $10 credit for the hassle, which I accepted. I maintain that I'm being overcharged GST and from the looks of these forums. I'm not the only one...

Thank you for providing the online complaint form at:

 

https://www.telus.com/order/contact-us/en/escalates.jsp

 

Friendly Neighbour

Since October/November of 2017 Telus has been overcharging for taxes (in BC).

 

Clearly, when a company advertises a service/product at $aaa dollars and then sells at $bbb dollars, the taxation amount is calculated on the sold value ($bbb).  If a company advertises a service at $100, sells to you at $50 (discounted), they must calculate tax on the sale amount ($50).  This is clearly stated in the taxation bulletins below.  Telus is wrong.  The quickest way to a remedy is to contact your MP/MLA (elected government person) and tell them this is a serious matter that you want assistance with. 

 

General Information for GST/HST Registrants, page 48

http://publications.gc.ca/collections/collection_2017/arc-cra/Rv4-42-2017-eng.pdf

 

Promotional Materials and Special Offers, page 5

http://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-311-promotional-materials-specia...

While I am not an expert in tax laws, my  thinking on this is that it is not so black and white. It has to be more complex than that.  When a company advertises an item on sale, for example from $100 to $70, then of course they will charge tax on $70.  However, if the same company issues a coupon for $30 on that specific item, the tax will be on $100 and 30 will be treated as cash--with the net value in Alberta being $75 and not $73.50.

 

When Telus advertises a service for say $50 for the first 6 months and $80 ongoing, I am sure they charge GST on $50 for the first 6 months and on $80 after that.  Complication(that we are talking about in this thread) arises when a customer bargains for a better rate and the L&R agent subsidizes the monthly rate from $80 to $50, then they consider it as a promotional dollar equivalent to a coupon.  Thus they charge GST on the full rate and subtract the promotional amount($30 in this example) and that is where the discrepancy arises.

 

Obviously, I am not speaking on behalf of Telus here but in my case the above math agrees with the taxes as I have had some discount on my TV and Internet services.  Now, I must also note that this wasn't always the case.  Up until August of 2017, the taxes always matched the exact amount of dollars you were charged.  Something changed around that time and this is the new reality.  I am not sure if it is across the board or has affected only those who made changes to their accounts during July-September 2017 period. 

Just got my February bill and once again it is a mess...reps are no longer hiding it anymore perhaps a memo went out.

 

Full Taxes (12% in my case) are indeed being charged BEFORE any discount credits on account are applied which in my opinion is a load of garbage but I guess it must be legal assuming CRA is aware of their practices.

 

 

 

 

This change became prevalent in the autumn of 2017.  One of their representatives, posting here, claims it was an accounting problem internally. Another representative, reached by telephone, claims that the government directed them to make a change to tax calculations. In the latter case, he was ambivalent about particulars -- is it all governments in each jurisdiction Telus operates in, the federal government only, a particular provincial government? There was no effort by the latter representative to provide any government issued documents, or reference to, that would support the claims made by Telus: "the government directed us".

 

This whole scenario smells much like certain cell phone provider claims of years past that clients needed to pay a "network access fee" (aprox $8) each month. Further, some of them claimed that it was a fee demanded by "the government". It was proven that the charge was merely another layer of fees that the service provider applied, without any mandate by the government. The monies certainly were not a tax that was forwarded to the government.

 

The governments at both levels state tax calculations should be based on the reduced/discounted/final price the customer pays. If the supplier/vendor wants to monkey around with GST input tax credits, they can choose their method of accounting, but the client/customer cannot be made to pay tax on the fictitious, inflated portion of the advertised price.

 

I think Telus, and anyone else attempting to calculate and charge taxes on an amplified, advertised service price, is skating on thin ice.

 

Ambassador

Indeed there is definitely a billing issue affecting some clients...I'm on standalone Internet and taxes were incorrect last two bills Oct/Nov.

 

https://forum.telus.com/t5/My-Home-Account/Incorrect-Taxes-calculation-billing-issue/td-p/78723

did they give you a reasonable answer and resolve your situation ?

Community Power User

Tax looks fine on my statements and I'm in Alberta. Can you provide more information on what you're seeing?


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Helpful Neighbour

Taxes should be charge base on the final total correct ? Discount should apply to the total first then tax!