Rebates That Are Part of the Sales Transaction – Individuals

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Some manufacturers' rebates are granted to customers through the retailer at the time a good is purchased.

The amount of the rebate is applied to the retail price of the item. The retailer must collect the GST and QST on the retail price before deducting the amount of the rebate.

Example

A dealership sells an automobile for $20,000. The dealer informs the customer (who is not a GST or QST registrant) that the manufacturer is providing a $500 rebate on the automobile.

Calculation Amount
Amount payable by the customer = $22,495 
Selling price $20,000 
GST ($20,000 × 5%) + $1,000 
QST ($20,000 × 9.975%) + $1,995 
Subtotal = $22,995 
Rebate $500
Note

The customer must pay $20,500 ($22,495 − $1,995) to the dealership and $1,995 to the Société de l'assurance automobile du Québec. 

For more information, see the document General Information Concerning the QST and the GST/HST (IN-203-V).

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