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

Gift certificates
A gift certificate is a document that can be used as payment for goods or services purchased from one
or more merchants. The sale of a gift certificate is not subject to GST or QST. When a customer pays
for an item with a gift certificate, the latter is considered a portion of the amount paid for the item;
accordingly, you must calculate GST and QST on the full price of the item, as in a cash purchase. As
the retailer, you are not eligible for any form of compensation.
Example
For his birthday Daniel receives a $30 gift certificate issued by a store that sells CDs. His purchase
is as follows:
Price of CDs $35.00
GST + $1.75
Subtotal $36.75
QST + $2.76
Subtotal $39.51
Value of gift certificate – $30.00
Balance due $9.51
Coupons
Coupons are receipts or tickets with a set monetary value (such as a $2 discount) or without a
set monetary value (such as a 10% discount). Coupons entitle the consumer to a discount on the
purchase price of specific goods or services.
Coupon reimbursements, as well as related handling fees and postage, are not taxed. However,
coupon clearing houses must charge GST and QST on brokerage fees.
The following section shows how to calculate the GST and QST on various types of coupons.
Reimbursable coupons
Reimbursable coupons reduce the total amount of the bill, like a cash payment. They are generally
referred to as “manufacturers’ coupons,” and their face value is considered to include the GST and
QST payable.
Reimbursable coupons
y are remitted by the retailer to a third party (for example, a coupon clearing house or the
manufacturer) for redemption;
y entitle the purchaser to a specific discount (set amount) at the time of purchase; and
y apply only to taxable (excluding zero-rated) goods and services.
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Special cases