HST: Before or After the Discount?

In my last post I talked about how Fairmont Vancouver and DealFind are not making it clear to consumers as to WHY they are charging the 12% HST on the original value of $76 instead of on the discounted price of $38.. Well, I actually took the time to find out (unlike DealFind), and it turns out that they might actually be CORRECT, and that tax should be charged on the actual value ($76 in this case).

This is because the vouchers are essentially like “gift certificates”. Tax is applied onto the original value, and then the discount is applied onto the final bill.

Refer to CRA’s link here: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/cpns/gft-eng.html

HOWEVER, this does NOT mean that DealFind and Fairmont are 100% correct.

Last year Fairmont offered the deal, with tax applied to the discounted value. They probably found out later that they messed up, and therefore did not want to do the same thing again this year. However, instead of admitting to their mistake when people inquired, they decided to avoid the topic altogether. DealFind probably knows about this as well, and instead of providing customers with solid answers, decided to copy/paste the same answer over and over again: “The taxes and gratuities paid on the $76 dollar value is because it is a food service and this is the government regulation for taxing.”

What government regulation? Where is the evidence? People are not concerned because it’s going to be costing them an extra $4.50 to enjoy the afternoon tea, but because there are over 13,000 vouchers sold, so if the tax should only be on the discounted price, who/where is the extra tax going towards??

I believe that this is the correct interpretation of the whole tax issue around Fairmont and DealFind’s current deal, but please leave me a comment below if you think otherwise. :)

10 thoughts on “HST: Before or After the Discount?

  1. EI says:

    Hi,

    Thank you so much for clarifying that; I have been somewhat concerned about this deal (though I have already bought 2 and 1 as a gift, as it is still a steal) regarding whether the amount of tax that customer must pay was correct or not. Now that I know, I feel much more relieved and feel like I can buy with confidence in the future on Dealfind. Even though their customer service could use a little work.

    Thank you!! =)

    P.S. I too bought the Leonidas coupon…can’t wait to try it out after reading your post about it!

  2. CSDealfind says:

    Dear Valued Dealfind Customer,

    Thank you for your post.

    We apologize for the confusion you and others have experienced regarding the taxes for our amazing $38 for Afternoon Tea for 2 People, Including Pastries, Petit Sandwiches and Vancouver’s Best House-Made Scones at The Fairmont Hotel Vancouver ($76 Value) Deal.

    We understand that The Fairmont Hotel Vancouver dealt with the taxes differently when they ran last year due to an error, however, we have clarified that taxes and gratuities are to be paid on the full value of the voucher, which in this case is $76. Due to the confusion, we have noted on the Deal page under the ‘What You Should Know’ that “Taxes of 12% and gratuities of 15% must be paid at The Fairmont Hotel Vancouver on the price of $76.”

    We want to thank you for posting this correction and for for your help! We would like to explain that as per our DealTalk Discussion Board policies, “Any posts that are not questions about today’s deal will be removed.” For all other inquiries, please do not hesitate to contact us by calling 1-855-631-6368, or by using our Contact Us Request Form here: http://www.dealfind.com/contact-us.php.

    Sincerely,

    The Dealfind Team

    • This problem could have been dealt with it in a much better way. Instead of giving the same answers, all you guys had to do was provide the proof/evidence that everyone was looking for. People are just confused about the difference in taxing for the current deal and for the last deal that was offered for Fairmont’s afternoon tea. It’s not that hard to figure out.

      I appreciate your reply, but perhaps it might be better to apologize to everybody on the discussion board.

    • C Y says:

      “Any posts that are not questions about today’s deal will be removed.”

      Seriously? So you’re saying all those posts deleted were not relevant to the deal at all? First, if that’s a policy then don’t you think it’s common courtesy to let people know that first instead of pretending those questions never existed? I never even posted on your discussion board but that is just terrible customer service. It doesn’t seem like Dealfind “values” their customers at all.

      And thank you for your post SimpleAffairs. I understand the tax part but I still don’t understand Fairmont suddenly hiding their online menu just to up their price and accommodate this deal. That is just shady business.

      • Hello C Y,

        Thank you for reading! I agree with you on the Fairmont issue as well. We can wait and see if Fairmont changes their afternoon tea price back to $36 after the deal ends or not. ;)

        • Adrienne says:

          I’m still waiting for an answer to my request for a refund. This whole thing was so rude on both Dealfind’s and The Fairmont’s parts. I repeatedly have requested a refund and on Thursday, April 5th @ 12.21PM, I received this from Dealfind:

          “Hi Adrienne,

          Thank you for your email.

          We are sorry to hear about your experience, and assure you that we are looking into your case. As per Dealfind’s standard refund procedure, we require 24 hours to notify the merchant of a refund request and investigate the situation. We will get back to you shortly!

          We apologize for any inconvenience and thank you for your patience.

          Best Regards,

          Avital
          Customer Satisfaction Expert”

          It is now 8:42 PM and still no refund. My Visa was charged on March 30th, 2 days after I made my MISTAKE purchase!

          Dealfind has lost me as a customer due to their ignorance and unprofessional practices. Their staff is rude and condescending and do not treat the customers with the respect and courtesy that we deserve.

          I haven’t given up on online purchasing, I will just never purchase from Dealfind again.

    • Annoyed says:

      These vouchers cannot be treated as gift certificates per the cra website: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/cpns/gft-eng.html

      because per point 3

      “for which money or other consideration in the amount of the certificate’s face value is given to the issuer of the certificate”

      has never occured. If you paid the full amount in a gift certificate, that is you paid $76 or $72 then yes you should be charged the full amount of HST on the face value of the gift certificate. So if the Fairmount is suggesting that this deal purchased is a gift certificate for which you paid an amount (let’s say $38) and they accept that gift certificate to cover the cost of a $76 meal then the only HST to remit is the cost of the gift certificate. The remaining difference must be a non-reimburseable coupon or discount for which no tax should be collected or remitted.

      No restaurant has any obligation to remit HST on any sales not incurred, Fairmount has no obligation to remit to cra HST collected on the full price as this should not be charged to the end user.

      • Wow! Good point. I didn’t catch that one. Thanks, Annoyed!

        So in the end, it seems like Fairmont and Dealfind are still wrong.. But are they going to deal with it? Quite unlikely. :X

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