16 December 2005 GST/HST Interpretation 76598 - Acceptability of an Invoice as a Credit Note

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

Dear XXXXX:

Thank you for your fax XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to credit notes and invoices.

All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.

Interpretation Requested

You would like clarification on the acceptability of a GST registrant reducing the consideration for a previous supply by including a credit amount as a line item on a subsequent invoice. You would like us to confirm that the provision of the credit through this manner (rather than issuing a separate "Credit Note") is acceptable?

Interpretation Given

Based on the information provided, it is agreed that the Canada Revenue Agency (CRA) would accept the reduction of consideration and corresponding tax adjustment to be indicated on a customer's invoice as meeting the Credit Note and Debit Note Regulations requirements, provided that the indication is clear as to its representation of the reduction amount and the corresponding tax amount is clearly indicated on the invoice.

The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Goods and Services Tax Rulings, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-0419.

Yours truly,

Catherine Séguin-Ouimet
General Operations Unit
General Operations & Border Issues Division
Excise and GST/HST Rulings Directorate

2005/10/07 — RITS 51783 — Application of the GST/HST to Mutual Fund Redemption Fees