Cash Discounts
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 the customer contains the following information:
| Total | $114.98 |
|---|---|
| Purchase | $100.00 |
| GST ($100 × 5%) | $5.00 |
| QST ($100 × 9.975%) | $9.98 |
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 $112.98, calculated as follows:
| Total | $112.98 |
|---|---|
| Purchase ($100 − $2) | $98.00 |
| GST ($100 × 5%) | $5.00 |
| QST ($100 × 9.975%) | $9.98 |