The appellant bank appealed reassessments denying GST/HST rebates for amounts paid to a loyalty program operator.
The bank argued that the reward points it purchased were 'gift certificates' under section 181.2 of the Excise Tax Act, meaning no GST should have been charged.
The Tax Court of Canada found that the predominant element of the supply was the reward points, not marketing services.
However, the Court concluded that the reward points were not gift certificates because they lacked a stated monetary value, were not freely transferable, and required the accumulation of more points to be used.
The appeals were dismissed.
