topic Re: GST questions in Selling

GST questions

dont_waste_dollars — Sat, 02 May 2015 19:29:17 GMT

hi there,

Lets say hypothetically i sell an item for $250 and bought it for $220

$20 gst hast already been paid by the supplier. plus i have to pay an additional $2.73 for a total of $22.73gst on the $250 sale

But i was wondering ( hoping.. wishing.. knowing its not true lol ) if i can deduct my ebay and papal fees from my sale price (21.25+5)

giving me a revised sale price of $223.75 which means instead of paying $2.73 in gst i only pay $0.35

Oh and lets say in another situation taking the ebay and paypal fees away from my sold price means i fall below what i paid for it ( made a loss ). lets say i bought for $220 and my revised sale price after fees deducted was $210. Would i have that sale as my gst contribution ruduced to zero or would i actually deduct $0.89 from my overal gst contribution from that sale and for my quarterly BAS?

Thanks so much in advance for any help with this. I've just recently exeeded the 75k turnover mark and thus have to start paying gst and i thought i was all over it but then i found myself wondering a few things about this little tax.

Re: GST questions

maranock — Sat, 02 May 2015 19:48:22 GMT

I am not good at explaining things like this but:

Assuming you have now registered for GST, the tax your supplier has charged you is of no importance as it will be claimed back by you. You need to charge your customers gst on top of your price, just as your supplier has done to you.

Your price for your item is $250 so you sell it for $275. You claim back the amount of GST you paid your supplier on your quarterly form - and the government gets the extra which your customer has paid as they can't claim back any as the end user.

I think I know what exactly you are asking but I can't seem to find the words to explain it. It is easier to talk to your accountant, or look it up on the ATO website.

Re: GST questions

clarry100 — Sat, 02 May 2015 20:19:48 GMT

You pay GST on your sale prices.
You can claim back any GST you paid on anything yo do with the business.
Unfortunately since neither EBay nor PayPal pay GST in this country your fees paid to them do not contains s GST component and therefore cannot be claimed back.
Also if you buy your stock from overseas there is no GST component in your suppliers charge. Unless GST was charged during the import process.
Hope that makes sense.

Re: GST questions

jensmanchester-australia — Sat, 02 May 2015 22:45:59 GMT

No you cannot deduct your ebay and paypal fees from the sale price to reduce the sales price for GST purposes.

GST is paid on the total sales price. (including any postage costs) ie It is charged on what the buyer pays you in total.

You claim your ebay and paypal fees separately as a GST free expense.

If your sales price is lower than your purchase price then you receive a GST credit for that particular sale.

Re: GST questions

gec2002 — Sat, 02 May 2015 23:21:06 GMT

Basically on items that you buy and sell the amount of GST to be paid is equal to the GST on your profit (Loss) so bought for $220 (GST Paid $20 ) sold for $330 (GST received $30) you owe the ATO $30 - $20 = $10 or in other words profit = $330 -$220 = $110 divide by 11 (to calculate 10% GST) = $10 GST you owe. No GST on eBay and Paypal fees or bank interest or charges so nothing to claim. But all business costs the contain GST eg Postage, ISP costs, etc are claimable.

Re: GST questions

dont_waste_dollars — Sun, 03 May 2015 04:41:41 GMT

Thanks for all the replies guys

So basicaly gst works just as id feared haha.

When you say i can claim gst credits im a little confused. i havent actually paid my first BAS yet.... this was how i thought it worked...

BAS is due lets say i bought everything for 22000 and sold for 33000. ( every item i buy already has a GST component paid as its all within australia) meaning the gst total is 3000. gst paid by supplier 2000. when i submit my BAS do i pay the differentce of 1000 OR do i pay the full 3000 and claim back 2000 at tax time? seems silly if its the latter. that means the goverment will have surpless gst money from every link in the chain so to speak and will have to pay most of it back.

Thanks again.

Re: GST questions

lyndal1838 — Sun, 03 May 2015 04:53:40 GMT

You work out the amount of GST you need to pay and write that in the box.

Then you work out the amount of GST that has already been paid.

If you are submitting on line the ATO site will tell you what amount you need to pay but basically it is the difference between what is owed by you on your sales and what has already been paid by your suppliers.

Re: GST questions

cherry*135 — Sun, 03 May 2015 09:25:33 GMT

If you pay $2000 GST on purchases of goods, office expenses .... (GST collected)

and have collected $3000 GST ( from the sale of goods) (GST paid)

On your BAS - you would owe ATO $1000. Which would be paid to ATO quarterly (?).

Simplified version above - as PAYG w/h is also entered on BAS, and other things (e.g. capital purchases) if they apply.

Re: GST questions

misterforgetfulsbooks — Tue, 05 May 2015 04:53:37 GMT

ebay pays the Govt. no GST on the fees they charge us?

What a rort.

And now the Govt. wants to stuff around with people's pensions.

Re: GST questions

joethenuts — Tue, 05 May 2015 05:03:54 GMT

mmmm if they had to pay gst who do you think will have to pay for it ,mmmmmmmmmm

Re: GST questions

clarry100 — Tue, 05 May 2015 05:29:59 GMT

The buyer pays the GST on the item sale price. Just as you do when you buy something in a shop that has a GST component on it.

You (the seller) pays the GST on any goods or services related to running your business, but this would then be claimable (if indeed GST was paid by paypal/ebay) as an input tax credit when you lodge your quarterly BAS statements.

Since neither paypal nor ebay pay any GST to the ATO on their services at present then there is no GST component to claim in relation to their fees.

If you don't have enough total sales in a tax year (currently $75K) to register for GST then your tax agent will have the job of taking care of any business expenses you incur when you complete your usual annual tax returns. In this case the GST forms a part of the total cost of the item/service.

Either way you (the seller) are liable to pay the tax (either income or GST) you incur on your profits. Your tax accountant will figure it all out for you.

Re: GST questions

joethenuts — Tue, 05 May 2015 05:55:37 GMT

correct . the question was if ebay paid a gst on there fees

Re: GST questions

clarry100 — Tue, 05 May 2015 07:10:54 GMT

Same answer...

Re: GST questions

flexigav — Fri, 16 Jun 2017 04:52:09 GMT

As a seller I am employing the services of Ebay to facilitate my sales. I soon will be paying the GST on Ebay's services. The amount being based on the sales revenue from each sale I make using Ebay's services.

As a buyer I am also using Ebay's services to help purchase goods. Therefore I must pay the GST on Ebay's services, also based on the value of the goods they helped me purchase.

Is Ebay collecting two lots of the GST for servicing both the buyer and the seller?

Re: GST questions

lyndal1838 — Fri, 16 Jun 2017 05:07:26 GMT

Ebay is not collecting GST on the sale of your items but on the fees that you pay for accessing ebay as a selling venue....the Final Value Fees on the item and the postage.

Everything you buy on ebay has GST included in the sale price but as the end buyer you cannot claim it back. The only people affected by the GST on the sale price is the seller and then only if they are GST registered. Ebay has nothing to do with this GST.

Re: GST questions

clarry100 — Fri, 16 Jun 2017 16:02:34 GMT

As Lyndal says the GST is only payable on eBay fees.
When you are acting as a buyer eBay do not charge you any fee so you are therefore not subject to this new GST.
As the seller you are charged fees by eBay for the use of their services so in turn you ARE subject to the new GST on their fees.
If you are a seller who is registered for GST (ie sales revenue over $AUD75K per snnum) then you will need to account for this GST in your quarterly BAS statements.
If you are not registered for GST then it will not bother you too much but you might wish to have a look into increasing your sale prices marginally to cover it off.
But for a sale of say $10 where the eBay fee would normally be say $1 then 10% on that $1 fee is only 10-cents so not much of an increase really.
Remember the new GST is only applied to the eBay fee component not the full sale price of the item itself.

Re: GST questions

valueexplorerau — Fri, 17 Dec 2021 03:25:09 GMT

Good explanation.

Re: GST questions

kh-stanley1 — Fri, 17 Dec 2021 04:07:28 GMT

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.

Thank you for understanding.