General Informatiion Concerning the QST and the GST/HST - Ryan

Special cases
Cash discounts and late-payment charges
If you offer cash discounts (including early-payment discounts) on credit sales, you must collect the
GST and QST on the total sale price before the discount.
Example
The invoice you give to the customer contains the following information:
Purchase $100.00
GST + $5.00
QST + $7.88
Total $112.88
The invoice also confirms that a 2% discount is offered if the customer pays within 10 days of
billing. The GST and QST do not change, even if the customer takes advantage of the discount.
Consequently, the total price paid by the customer will be $110.88, calculated as follows:
Purchase ($100 – $2) $98.00
GST + $5.00
QST + $7.88
Total $110.88
If you charge an amount for late payment of a bill, the GST and QST must be calculated on the
amount shown on the invoice before the addition of the late-payment charge.
Example
You charge $5 for late payment of a bill of $100. In this case, the GST and QST must be collected
only on the amount of $100, even if your customer actually paid $105 for the item.
When the amount you bill the customer is already net of the early-payment discount, you must charge
GST and QST on the invoiced amount.
Example
You send a customer an invoice with instructions to pay $108 if payment is made by March 23,
or $118 if payment is made after March 23. Even if the customer makes the payment after
March 23, you must charge GST and QST on the amount of $108.
47 Special cases