Search - consideration

A gift certificate is a device (e.g. voucher, receipt, ticket): • that usually has a monetary value or is for a 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 (including a gift card that meets the criteria of a gift certificate) for consideration is deemed not to be a supply and, when given as consideration for a supply of property or a service, the gift certificate is deemed to be money. ... Therefore, a GST/HST registrant merchant of a particular establishment who accepts a gift certificate as a method of payment is required to account for the GST/HST payable by the customer on the value of the consideration charged in respect of the taxable supply (other than zero-rated) of their goods or services. ...

Issue Are the early withdrawal fees considered to have been acquired from the segregated fund by the insurer pursuant to paragraph 131(1)(c) or are the early withdrawal fees consideration for "the amount of a redemption" pursuant to paragraph 131(2)(a)? Our comments Paragraph 131(1)(c) deems amounts deducted from segregated funds to be "a taxable supply of a service and the amount shall be deemed to be consideration for the supply that becomes due at the time". ... Accordingly, the amount transferred out of the segregated fund into the general fund is an exempt supply pursuant to paragraph 123(1)(f) of the definition of financial service. •   The redemption fee paid by the insured to the insurer by means of deduction from the general fund of the insurer constitutes consideration for "the transfer of ownership or repayment of a financial instrument" pursuant to paragraph 123(1)(d) of the definition of "financial service". ...

Pursuant to subsection 249(1) of the Act, the threshold amount for a fiscal year of a person is an amount equal to the total of the amount determined by the formula (A x 365/B) + (C x 365/D) where A is the total consideration (other than consideration attributable to the sale of goodwill of a business) paid or payable to the person in the immediately preceding fiscal year (referred to as the base year) for taxable supplies (other than supplies of financial services, supplies by way of sale of capital real property, and zero-rated exports) made in Canada; and B is the number of days in the base year. ... Under subsection 249(1), the threshold amount for a particular fiscal year (year 3) is based on the consideration for taxable supplies in the immediately preceding fiscal year (year 2). Therefore the threshold amount for year 2 is based on the consideration for taxable supplies in the immediately preceding fiscal year (year 1). ...

Retailers accepted these coupons as partial consideration towards the purchase price of XXXXX products. ... The GST/HST was collected by the retailers on the value of the consideration which would be payable if the coupons had not been accepted. ... As such, the amount of the promotional allowance is not consideration for a supply made by the retailer to the supplier. ...

Ruling Requested You would like confirmation that XXXXX is required to collect the GST/HST on the consideration it charges insurance companies for the supply of IME reports. ... The tax is calculated on the value of the consideration for this supply which is the total amount charged by XXXXX to the insurance companies. That is, the value of the consideration includes the recovery of XXXXX expenses incurred to make this supply and its arranging or set-up fee. ...

Interpretation Given As explained in our letter XXXXX, section 232 of the ETA permits an adjustment, refund or credit of the GST in two situations: where an excess amount of tax has been charged or collected; or where consideration for a supply is reduced at some time after the tax has been charged or collected, and the supplier adjusts, refunds or credits the tax charged on the original consideration. ... Where the supplier has reduced the consideration for a supply and adjusts, refunds or credits the tax charged or collected on the reduced consideration, paragraph 232(3)(a) of the ETA requires either a credit note to be issued by the supplier or a debit note to be issued by the recipient containing prescribed information for documentary purposes. In Scenario 4, if the supplier has reduced the consideration for the returned goods and the recipient has issued a debit note containing the prescribed information, both the supplier and recipient must account for the tax contained as part of the prescribed information on the debit note in their respective reporting periods in which the debit note was issued and received. ...

It states, "Where a lessee is obligated under the terms of a lease agreement to pay the lessor for any shortfalls below the guaranteed amount in the vehicle's value at the termination of the lease period, any shortfall in that amount is considered for GST purposes to be additional consideration paid in respect of the vehicle." Section 152 outlines when the consideration for a taxable supply is due. Subsection 152(2) applies specifically to the consideration for a taxable supply when the supply is made under a lease agreement: "Notwithstanding subsection (1), where property is supplied by way of lease, licence or similar arrangement under an agreement in writing, the consideration, or any part thereof, for the supply shall, for the purposes of this Part, be deemed to become due on the day the recipient is required to pay the consideration or part to the supplier pursuant to the agreement. ...

The XXXXX assessment is consideration for taxable supplies made to the XXXXX members. ... Indicative of this is the fact that if a member chose to show its assessment on its customer's invoice, this would not reduce the amount of the consideration for the freight service. 3. ... Such a practice does not reduce the consideration for the freight transportation service. ...

Based on the facts set out above, we rule that the equalization payments by the XXXXX are consideration for an exempt supply pursuant to subparagraph 189(a)(i) of the ETA and therefore XXXXX is not required to collect tax on these payments. ... In our view, the amounts paid by the producers at issue represent membership dues and therefore consideration for that deemed exempt supply to the members, notwithstanding that the amount is paid by the producers. That is, pursuant to the terms of the collective agreement, the producers have undertaken to pay part of the consideration for services (deemed to be exempt) provided by the union to its members. ...

Interpretation Requested The XXXXX Regional office has recently received x letters on the topic of room and board and each has illustrated unique aspects for consideration. ... The supplies must be made for a single consideration where the fees are not billed as different or separate supplies. ... As the supply of accommodations is exempt from the GST pursuant to paragraph 6(a) of Part [I] of Schedule V to the Act, the total consideration attributable to the accommodation and laundry services will not be subject to the GST. ...