CRA finds that "gross revenue" does not include cost rebates or subsidies such as volume rebates.

Although the definition of "gross revenue" includes all amounts received or receivable by the taxpayer (other than on capital account), CRA considers (at least for inter-provincial income allocation purposes under Reg. 402(3)) that gross revenue does not include amounts received in respect of taxpayer expenditures such as volume rebates or government assistance.

Similar issues arise under the "gross REIT revenue" definition in s. 122.1, which on a literal reading could include a wide range of receipts such as loan proceeds.

In 2010-0382161I7 F, CRA indicated that rebates or discounts only represent cost reductions rather than gross revenue if they are a price reduction at the time of purchase rather than being crystallized subsequently based on, say, yearly purchase volumes.  (If purchased inventory is not sold until a subsequent year, this affects the timing of income recognition.)  CRA noted that the above interpretation reverses this earlier position.

Neal Armstrong.  Summary of 31 March 2014 Memo 2013-0514921I7 under s. 248(1) – gross revenue.