topic Re: How is Ebay calculating the GST on purchases sent to Australia? in Buying

How is Ebay calculating the GST on purchases sent to Australia?

camicat1 — Tue, 10 Jul 2018 13:40:03 GMT

I have noticed that the amount being added to purchases for "import charges" is far more than the 10% GST now levied on items sold into Australia

Here are just two examples I encountered tonight. In both cases the "GST" or "Import Charges" is far more than the legal rate of 10%. How is this being calculated and who is getting the additional money?

Item (1) US $42.99 Postage US $23.50 GST US $6.65

Order total US $73.14

Items (5) US $112.75 Postage US $31.16 Import charges US $19.67

Order total US $163.58

Re: How is Ebay calculating the GST on purchases sent to Australia?

countessalmirena — Tue, 10 Jul 2018 14:05:11 GMT

There are several threads on this board which have mentioned this very issue.

As best we can determine at this point, it seems that Pitney Bowes are charging an additional amount, presumably for admin associated with collecting the GST. This isn't legal in Australia, but with PB being outside Australia, it's anyone's guess as to how this will play out with the ATO.

Re: How is Ebay calculating the GST on purchases sent to Australia?

lyndal1838 — Tue, 10 Jul 2018 14:22:31 GMT

Your first example is the way it should be....10% of the item cost plus postage, collected by ebay.

The second example looks to be using the GSP.....the GST is included in the Import charges and collected by Pitney Bowes. It is illegal not to show the GST as a separate item on the invoice but Pitney Bowes is getting away with it. They are also charging a fee for collecting the GSP which is also illegal in Australia.

Re: How is Ebay calculating the GST on purchases sent to Australia?

camicat1 — Tue, 10 Jul 2018 23:24:28 GMT

The Sydney Morning herald is doing a piece on the big overseas sellers who are still resisting collecting the GST. I have sent this information to them as showing the other side of the problem where some are clearly profiteering. Almost every state in the USA collects some form of tax, with different rates in different states and this does not seem to attract additional charges for administration.

Re: How is Ebay calculating the GST on purchases sent to Australia?

brerrabbit585 — Wed, 11 Jul 2018 01:32:08 GMT

@camicat1 wrote:
The Sydney Morning herald is doing a piece on the big overseas sellers who are still resisting collecting the GST. I have sent this information to them as showing the other side of the problem where some are clearly profiteering. Almost every state in the USA collects some form of tax, with different rates in different states and this does not seem to attract additional charges for administration.

US citizens are obliged to pay sales tax in their state and can't charge to collect it, but that's a completely different situation to overseas sellers collecting tax on behalf of the Australian govt. Nobody knows what the legalities are when it comes to overseas businesses collecting tax on Australia's behalf and I'd say there are still a few things to be ironed out.

Re: How is Ebay calculating the GST on purchases sent to Australia?

camicat1 — Wed, 11 Jul 2018 02:36:27 GMT

Others have this sorted easily. Just calculate 10% and remit to ebay Australia, as the seller in China has done with this purchase

Transaction ID: 7JM4xxxxxx
Date: 10 July 2018
Payment status: COMPLETED

Description Unit price Quantity Amount

20X/set Stainless Steel Clothes Pegs Hanging Pins Clips Laundry Windproof.AU

273102130688

$4.01 AUD

$8.02 AUD

Shipping and handling $0.00 AUD Total
$8.02 AUD Payment
$8.02 AUD

Related payment

Transaction ID: 7W0xxxxx

Related to purchase transaction ID: 7JM4xxxxx

Payment recipient: eBay Australia & New Zealand Pty Limited

A separate payment has been sent to cover charges related to your purchase.

Total $0.80 AUD Payment sent to: gst_au@ebay.com

Re: How is Ebay calculating the GST on purchases sent to Australia?

countessalmirena — Wed, 11 Jul 2018 07:53:06 GMT

@camicat1,

The seller hasn't "sorted this"; eBay collects all GST on overseas items listed on eBay, sold to customers in Australia, where the total including shipping is less than $1,000. (Or rather, "all" except for items being sent via the GSP, it seems. In those cases, it's PB collecting the GST and charging an "import fee" that includes the GST plus admin costs, apparently.)

eBay themselves, where they are collecting the GST, are "eating" the administrative costs of this, which are considerable.

The Chinese seller in your example has done nothing in connection with the GST, and will not be remitting any funds to the ATO.

Re: How is Ebay calculating the GST on purchases sent to Australia?

brerrabbit585 — Wed, 11 Jul 2018 10:33:37 GMT

The thought of the Chinese collecting money for the Aussie govt and then sending it to ebay is the funniest thing I've heard in ages!!!

Re: How is Ebay calculating the GST on purchases sent to Australia?

camicat1 — Wed, 11 Jul 2018 11:57:02 GMT

It struck me as hilarious particularly as from what you are saying ebay cannot manage a similar transaction when dealing with USA sellers. Something screwy about all this. Anyone who sells on eBay has to abide by eBay’s rules but they seem to apply them in different ways for different countries. There is no need to differentiate although this is what is happening. The Chinese seller simply processes the transaction and eBay does the rest.

Re: How is Ebay calculating the GST on purchases sent to Australia?

brerrabbit585 — Wed, 11 Jul 2018 14:30:42 GMT

It's Pitney Bowes that's charging more than the GST, not ebay. If you buy from a US seller who doesn't send through the GSP you'll just get charged the GST and nothing more, same as when you bought from a Chinese seller on ebay. PB seem to be charging to collect the GST, or if they aren't actually collecting it (I can't see how they would be) they're charging brokerage fees to fill in the customs certificate.

Re: How is Ebay calculating the GST on purchases sent to Australia?

camicat1 — Wed, 11 Jul 2018 14:49:19 GMT

I just did a random check of some private sellers not using Pitney Bowes and all are adding far more than the 10% GST. The amounts vary from 15-19% of the price of the goods, not the required 10%. The explanation given as information is that the Australian Government charges 10%. No explanation is given for the extra.

There is nothing more to be gained from pursuing this topic here. I will need to contact eBay

Re: How is Ebay calculating the GST on purchases sent to Australia?

countessalmirena — Wed, 11 Jul 2018 14:55:50 GMT

Are you including the cost of shipping in your calculations?

The GST is to be charged on the item price + shipping/postage price.

Re: How is Ebay calculating the GST on purchases sent to Australia?

camicat1 — Thu, 12 Jul 2018 00:05:38 GMT

Yes of course I have- I checked the ATO website to see what should be charged before I first posted here. Some of the amounts are correct, many are not, and it is not just Pitney Bowes at fault . I notice there are now several other threads raising this issue

As I noted above there is not much point in pursuing this here. I will have to approach eBay for some asnwers as to how they are applying the new rules to their sellers.

Re: How is Ebay calculating the GST on purchases sent to Australia?

k1ooo-slr-sales — Thu, 12 Jul 2018 01:05:54 GMT

@camicat1 wrote:
I just did a random check of some private sellers not using Pitney Bowes and all are adding far more than the 10% GST. The amounts vary from 15-19% of the price of the goods, not the required 10%. The explanation given as information is that the Australian Government charges 10%. No explanation is given for the extra.
There is nothing more to be gained from pursuing this topic here. I will need to contact eBay

if you are buying from private sellers on eBay they should not be adding GST to their items as it is eBay who will collect the GST, nothing to do with eBay sellers unless, as some members have posted, eBay defer to Pitney Bowes for GST collection on GSP items.

Re: How is Ebay calculating the GST on purchases sent to Australia?

brerrabbit585 — Thu, 12 Jul 2018 01:17:49 GMT

@camicat1 wrote:
I have noticed that the amount being added to purchases for "import charges" is far more than the 10% GST now levied on items sold into Australia
Here are just two examples I encountered tonight. In both cases the "GST" or "Import Charges" is far more than the legal rate of 10%. How is this being calculated and who is getting the additional money?

Item (1) US $42.99 Postage US $23.50 GST US $6.65
Order total US $73.14

Items (5) US $112.75 Postage US $31.16 Import charges US $19.67
Order total US $163.58

You're still insisting that sellers are charging you more than 10% but it's not the sellers charging anything, it's ebay who calculates the GST when you go through checkout. Your first example above is charging GST correctly, yet you insist it's more than 10%.

42.99 + 23.50 = $66.49 US. 10% of $66.49 = $6.65 US, exactly as they've charged it. If you've got this wrong, I suggest you're probably calculating all the others wrong as well, except the items being posted through the GSP. Nobody knows what Pitney Bowes is charging for or whether they can do it legally, so chase that up with the ATO but do your sums properly on the others before you waste their time.

Re: How is Ebay calculating the GST on purchases sent to Australia?

chezshed — Sat, 29 Sep 2018 11:35:08 GMT

Paypal are collecting the gst and pitney bowes another ebay co are double dipping by the looks

Re: How is Ebay calculating the GST on purchases sent to Australia?

chezshed — Sat, 29 Sep 2018 11:38:26 GMT

Obvious answer buy nothing that is shipped via pitney bowes... it was always ridiculously expensive and now this blatant rip off needs answering

Re: How is Ebay calculating the GST on purchases sent to Australia?

davewil1964 — Sat, 29 Sep 2018 11:57:07 GMT

@chezshed wrote:
Paypal are collecting the gst and pitney bowes another ebay co are double dipping by the looks

Paypal are collecting the GST on behalf of eBay and it goes into a separate account for remittance to the ATO.

Pitney Bowes is a global logistics company established in 1920 (it took me 30 seconds to check that) who subcontract to eBay for postage from the USA for eBay's Global Shipping Program.

PB do, indeed, charge for their services and charge GST on the admin costs as well as the service.

Easy answer - don't buy from sellers who use the GSP. You might find your options are limited (or nonexistant) but, hey, you won't get ripped off.

Re: How is Ebay calculating the GST on purchases sent to Australia?

sb_sgw4k — Fri, 15 Mar 2019 08:45:10 GMT

I'm sure it's legit but why include the shipping cost when calculating GST? Seems like a rort.

Re: How is Ebay calculating the GST on purchases sent to Australia?

k1ooo-slr-sales — Fri, 15 Mar 2019 09:18:15 GMT

@sb_sgw4k wrote:
I'm sure it's legit but why include the shipping cost when calculating GST? Seems like a rort.

the simple answer is that shipping cost is a service, and it makes collection of GST easier if it is applied to the transaction total.

Having shipping free of GST would encourage avoidance by Aussie buyers asking sellers to drop the item price and increase the shipping by the same amount. E.G. a US$150 item with US$30 shipping might become a US$10 item with US$170 shipping .

You might think this example I have given is not likely to happen, but we all know how much Aussies love paying tax!