Search - consideration

Under subsection 181(4), when a registrant accepts, in full or partial consideration for a supply of property or a service, a coupon that may be exchanged for the property or service or that entitles the recipient of the supply to a reduction of, or a discount on, the price of the property or service and subsection 181(2) does not apply in respect of the coupon, the value of the consideration for the supply is deemed to be the amount, if any, by which the value of the consideration for the supply exceeds the discount or exchange value of the coupon. In other words, the recipient of the supply would be required to pay tax on the net consideration for the supply; that is, after deducting the value of the coupon. ... GST/HST at the applicable rate then applies on the reduced consideration attributable to each of the taxable items. ...

In consideration of the Assumption of the Bridge Liability by XXXXX agreed to transfer lands to XXXXX to meet the XXXXX needs in connection with the reparation of the Bridges and related work. ... XXXXX was also granted, for nominal consideration, easements for some other properties connected with the Bridges (parcels of lands, structural elements of the Bridges, etc.). ... XXXXX agrees with XXXXX that the consideration to be shown in each of the conveyances from XXXXX in respect of XXXXX[.] ...

The amount of the discount will reduce the value of the consideration for each of the goods purchased. ... Where a customer of XXXXX purchases property and redeems points, the value of the consideration is reduced by the amount of the reduction associated with the points. ... Where a maximum dollar amount is deducted, that amount would have to be prorated among each of the items purchased based upon the value of the consideration for each item. ...

Therefore, the province is liable to pay the consideration and is the "recipient" of the supply. ... Where the province supplies the converted vehicles to a municipality for consideration, it is making a taxable supply to the municipality. As the supply is not zero-rated, tax at the rate of 7% must be charged on the value of the consideration for the supply. ...

Explanation Section 17 of Part VI of Schedule V to the ETA exempts the supply of a membership in a public sector body (other than a membership in a club the main purpose of which is to provide dining, recreational or sporting facilities or in a registered party) where each member does not receive a benefit by reason of the membership, other than a) an indirect benefit that is intended to accrue to all members collectively, b) the right to receive services supplied by the body that are in the nature of investigating, conciliating or settling complaints or disputes involving members, c) the right to vote at or participate in meetings, d) the right to receive or acquire property or services supplied to the member for consideration that is not part of the consideration for the membership and that is equal to the fair market value of the property or services at the time the supply is made, e) the right to receive a discount on the value of the consideration for a supply to be made by the body where the total value of all such discounts to which a member is entitled by reason of the membership is insignificant in relation to the consideration for the membership, or f) the right to receive periodic newsletters, reports or publications the value of which is insignificant in relation to the consideration for the membership, or that provide information on the activities of the body or its financial status, other than newsletters, reports or publications the value of which is significant in relation to the consideration for the membership and for which a fee is ordinarily charged by the body to non-members, except where the body has made an election under the section in prescribed form containing prescribed information. ...

While the recipient of a taxable supply is liable to pay the tax on the consideration charged for a taxable supply, the obligation to collect that tax rests with the supplier. ... A gift certificate is a device (e.g. voucher, receipt, ticket) • that usually has a monetary value or is for a particular supply of property or service • that can be redeemed on the purchase of property or a service from a particular supplier; i.e. the supplier agrees to accept the device as consideration, or a part thereof, towards the purchase of property or a service, • for which consideration was given, and • that has no intrinsic value. ... Section 181.2 provides that, for GST/HST purposes, the issuance or sale of a gift certificate for consideration shall be deemed not to be a supply and, when given as consideration for a supply of property or a service, the gift certificate shall be deemed to be money. ...

As a consequence, GST/HST applies to any prepayment or part payment of the consideration for a supply even if the goods and/or services are not supplied at the time the payment is made. ... When an amount is withdrawn from trust by the cemetery operator for the supply of cemetery products and services under the pre-need arrangement, the amount is regarded as consideration for the supplies and the GST/HST will apply on the value of that consideration at the time it becomes due unless the amount paid or due to the cemetery operator represents the total of the consideration and tax (i.e., the amount is considered to include tax). ... Where a cemetery operator charges consideration for a supply of a good or service and does not place the amount in trust, or withdraws an amount from trust to pay for a good or service supplied by the cemetery operator, the cemetery operator must account for the applicable amount of GST/HST on this amount. ...

It provides guidelines to clarify when a particular transfer of money by a grantor may be regarded by the CCRA as consideration for a supply made by the grantee. ... Note, subsection 141.01(1.2) of the ETA deems a grant or subsidy that is not consideration for a supply and intended to fund an activity that involves the making of taxable supplies for no consideration, to be consideration for those supplies. ... However, the transfer of money by the Province to the City is not consideration for a supply made by the City. ...

However, subsection 141.01(1.2) of the ETA provides that where a government grant is provided for the purpose of funding an activity of a registrant which results in the making of taxable supplies for no consideration, the grant is deemed for purposes of the section to be consideration for those supplies. Thus, the amounts the person receives from a grantor are deemed to be consideration for the person's taxable supplies. ... However, where the Organization makes supplies for no consideration the supplies would generally be exempt pursuant to section 10 of Part VI of Schedule V to the ETA. ...

RULING GIVEN Based on the facts set out above, we rule that 1. a payment received by the Association from a Partner that participates in the Program and who credits reward dollars to Association members or from a member acquiring additional reward dollars represents consideration for the taxable supply of a coupon rather than a gift certificate and, accordingly, the Association is required to collect GST/HST on the value of the consideration for the supply of the reward dollars; 2. when reward dollars are used by members to purchase property and services, the Association should treat the reward dollars as a reduction of the price of the property or service equal to the fixed dollar amount (the reward dollars) redeemed; and 3. the non-reimbursable coupon rules in subsection 181(3) apply where the Association treats the reward dollars used for a taxable supply of property or a service (other than a zero-rated supply) as a “partial cash payment that does not reduce the value of the consideration for the supply”. ... In determining which provision under section 181 applies to reward dollars, the characteristics of the coupon must be taken into consideration. In this case, where the reward dollars are accepted in full or partial consideration for a taxable supply other than a zero-rated supply, subsection 181(3) applies to the treatment of the redeemed reward dollars. ...