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

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Keithster
Resident

I recently negotiated a 50% discount on my phone, tv, and internet but they still calculated the taxes on the full amount. Telus reps say call CRA and I get no help from them. Can this be correct?

Darlene1
Coach

Gst and pst totals 12%, I get charged the 12% on the total amount owing which is a discount that I get as well. I checked past bills, some include a discounted rate and it all calculates correctly.

Lola
Rockstar

Whether taxes are added before or after a % discount, the final amount is the same. If you add 12% tax to 100.00, then subtract 5%, you get the same total as if you subtracted 5% from 100.00 then added 12% tax. If the discount is a coupon, or  a set dollar amount, then where tax is applied is dependent on if the amount is reimbursable to the merchant or not.

 

I don't know if this helps anyone here. It would be helpful to those of us trying to help if we could see the bills, discounts, itemization, etc., in real time.

 

 

Etown
Helpful Neighbour
I'm glad we have a discussion here and got few people attention! 1) Telus rep said they'll get back to me but I still haven't from them over few weeks now. I spoke to CRA and they agree that tax should be calculate on the final amount not pre-caluclate. 2) my charge from previous few months is different range from $144 to $123 but tax is still the same at $8! Make any sense?? Discount or no discount ! federal tax is only 5% and in alberta there is no pst! What is 5% for 132 ? not 8.32

vishwa
Ambassador

I am also waiting to hear from the Telus rep(who said he will look into it and call back).  In my case it is about 3-4 dollars more than it should be.  It only started in September.  I have a feeling that this issue might have affected people who made some change in the account(such as upgrade, change tv package, add a service or some other) during August-September time period.  Otherwise, we would have heard from many more people.

I am going to wait another week and then contact that Rep again to see what is happening.  By that time I will have received another bill.

Etown
Helpful Neighbour
totally agreed with you Vishwa! It happened for me as well starting August......calling Telus is such a time wasting. It took me over an hour to reach a rep on a slow day or busy day!

TMc
Neighbour

I agree - it seems to only have affected people that made a change to their plan during that time period. It seems to be a glitch in the system but good luck convincing any rep over the phone/any specialist they consult with, that the tax is being calculated incorrectly...

canucks4life
Ambassador

December bill is out tax calculation issue persists Robot Sad

 

New charges

Internet $60.43

Other charges and credits -$6.00

PST $5.35

GST / HST $3.67

Total new charges....................................................................$63.45

 

Well at least previous rep left a note on account last month so wasn't that difficult to get credited back again.

vishwa
Ambassador

My Telus rep called yesterday and they are still looking into it. I am sure it will be resolved.  He said he will call me back after the next bill to make sure things are sorted out. He gave a credit of $10 for the last 3/4 months.  

Most Helpful
BC1
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.

 

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
Resident

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
Resident

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.