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]

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.