Inquiry Regarding GST Calculation on Bill Credits

[SubjectiveAbuse]

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 by law, then cite the act that supports your position. Because the legislation I'm looking at clearly shows that this is Telus' choice, not a legal requirement.

Let’s be clear: internal credits are not manufacturer coupons. They are reductions in price — plain and simple. And price reductions do not get taxed as if the original price still applied.

Take this example:
A store sells T-shirts for $25, then runs a Canada Day sale with 20% off. The 20% is deducted before tax — because that’s how point-of-sale discounts work. You either have an internal reduction (company-run discount) or an external one (like a manufacturer coupon or third-party gift card). But if the price is lowered internally, there’s no justification to pretend the item was ever sold at the higher price for tax purposes — because it wasn’t.

If you sell a can of soup for $5, and a customer uses a manufacturer’s coupon to save 50¢, the store still rings in $5 and claims the 50¢ back from the manufacturer. That’s a legitimate external credit — the GST still applies on the $5.

But if you just decide to sell the can of soup for $4 during a promo, the GST applies to $4 — because that is the actual sale price. The $5 "value" is irrelevant. The customer never paid $5, the register never showed $5, and no outside party is covering the difference.

What Telus is doing is trying to call an internal discount a phantom price — then charging tax on that fictional amount. That’s not standard practice. That’s a creative accounting decision that lets you pocket a few extra nickels per transaction.

It’s a money grab — death by a thousand paper cuts.
And it doesn’t  even make sense!

[TELUS_Support]

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

[SubjectiveAbuse]

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.

[SubjectiveAbuse]

Manufacturer Coupons: A Reduction in Tax Payable for the Consumer
A key characteristic of a manufacturer's coupon is that it is a reimbursable coupon. This means the retailer who accepts the coupon from a customer is entitled to be reimbursed for the coupon's value by the manufacturer or another third party.
Specific Requirements and GST/HST Application:
Under Section 181 of the Excise Tax Act, when a retailer accepts a reimbursable coupon for a taxable supply (other than a zero-rated supply), the GST/HST is calculated on the full price of the item before the coupon is applied. The coupon is then treated as a partial payment towards the total, inclusive of tax.
Example:
A customer in Ontario (where the HST rate is 13%) purchases a product for $20.00 and presents a $2.00 manufacturer's coupon.
* Selling Price: $20.00
* HST (13% of $20.00): $2.60
* Total Payable: $22.60
* Less Manufacturer's Coupon: -$2.00
* Amount Paid by Customer: $20.60
In this scenario, the retailer collects $2.60 in HST from the customer and the coupon. The retailer can then claim an input tax credit (ITC) for the tax fraction of the coupon value they were reimbursed by the manufacturer. The "tax fraction" is calculated as the HST rate divided by (100% + the HST rate). In this case, it would be 13/113 of the $2.00 coupon value.

[SubjectiveAbuse]

Promotional Incentives: Tax on the Actual Price Paid
Promotional incentives offered by a retailer, such as "buy one, get one free" (BOGO) or percentage-off discounts, are treated differently from manufacturer coupons because the retailer is not reimbursed by a third party. These are considered non-reimbursable price reductions.
Specific Requirements and GST/HST Application:
For promotional incentives, the GST/HST is calculated on the net consideration paid by the customer.
* "Buy One, Get One Free" (BOGO): The CRA considers a BOGO offer as a single supply for a single price. Therefore, GST/HST is calculated on the total amount the customer actually pays.
Example:
A store offers a "buy one, get one free" promotion on a shirt that normally sells for $30. The customer gets two shirts but only pays for one.
* Total Consideration Paid: $30.00
* HST (13% of $30.00): $3.90
* Total Paid by Customer: $33.90
* Loyalty Programs and Points: When customers redeem loyalty points for goods or services, GST/HST is generally not applied to the redemption. The rationale is that the tax was implicitly collected on the original purchases that earned the points. However, if points are purchased or if they are redeemed for cash, the tax implications can change.

[SubjectiveAbuse]

Rebates: The Timing of the Tax Adjustment is Key
Rebates, which can be offered by either the manufacturer or the retailer, represent a refund to the customer after the initial purchase. The GST/HST treatment depends on whether the rebate is provided at the point of sale (instant rebate) or after the fact (mail-in rebate).
Specific Requirements and GST/HST Application:
* Instant Rebates: When a rebate is provided at the time of purchase, it is treated as a reduction in the price before calculating the GST/HST, similar to a retailer's promotional incentive.
* Mail-in Rebates and Section 181.1: For mail-in rebates, particularly those from a manufacturer, the initial sale is treated as being for the full price, and GST/HST is collected on that amount. The subsequent rebate is governed by Section 181.1 of the Excise Tax Act.
This section allows a registrant (e.g., a manufacturer) who pays a rebate to a customer to claim an input tax credit for the "tax fraction" of the rebate amount, provided they give the customer written notice that the rebate includes the GST/HST.
Example:
A customer buys a taxable item for $100 plus 13% HST, paying a total of $113. The manufacturer offers a $10 mail-in rebate.
* Initial Sale: The customer pays $113 to the retailer. The retailer remits the $13 HST to the government.
* Rebate: The customer mails in the rebate form and receives $10 from the manufacturer. If the manufacturer provides written notice that the rebate is tax-inclusive, they can claim an ITC for the tax portion of that rebate (13/113 of $10). The customer, if a GST/HST registrant who claimed an ITC on the initial purchase, may have to make an adjustment to their net tax.

[SubjectiveAbuse]

Appreciate the response — but let’s cut through the spin.

Telus isn't required to apply GST this way. You're choosing to, because it benefits your bottom line. CRA Bulletin B-103 doesn’t force this structure. It simply explains how tax is applied if a company chooses to treat internal credits as post-sale rebates. You chose that structure — likely because it lets you charge GST on money the customer never actually spends.

There’s no “full service amount” being paid here. Customers see the discount on their invoice before payment is made. That’s not a rebate — that’s a price reduction. A true post-sale rebate means the customer is charged and pays full price, and then receives a refund later. That’s not what’s happening. You’re taxing the higher amount, even though the customer never pays it.

This isn’t a CRA requirement — it’s a Telus accounting choice. Retailers across the country apply discounts before tax without issue. The only reason to structure it this way is to maximize how much you can tax and collect — even if it’s just pennies at a time.

You’re presenting this as a legal obligation when it’s clearly a business decision. A more honest answer would be:

> “We structure credits this way so we can apply tax on the undiscounted amount.”

But that would admit the obvious — this is about revenue, not compliance.

And let’s be real: the CRA didn’t tell you to quietly archive the last thread either. That was just damage control.