Manufacturers may offer rebates on the goods they sell. The GST and QST rules for manufacturers' rebates apply when all three of the following conditions are met:
- A manufacturer sells taxable goods (excluding zero-rated goods, other than motor vehicles purchased for sale, under the QST system) to a customer entitled to a rebate.
- The sale is made either directly by the manufacturer or by another person (such as a retailer).
- The customer receives a rebate respecting the goods from the manufacturer, accompanied by a document specifying that a portion of the rebate represents the GST and QST, and the rebate is not associated with a debit or credit note.
How the GST and QST are applied depends on when the rebate is granted, that is, if the rebate is treated as a separate transaction or as a part of the sales transaction.