topic Re: GST on online sales over $20 in Selling

GST on online sales over $20

misterforgetfulsbooks — Wed, 22 Jul 2015 05:15:54 GMT

Why not just get ebay to collect it off the sale of anything sold here in Australia?

ie: you sell items in Australia, you pay Australian taxes - level playing field

Re: GST on online sales over $20

pennyforum14 — Wed, 22 Jul 2015 05:36:52 GMT

Since eBay don't pay much (if any) tax in Australia, I can't see them agreeing to collect it, it would probably negate all the reasons they use to avoid paying it themselves. EG, they claim their Australian operation is minimal and most functions that generate income occur through the foreign head office and are therefore not taxable. If they agreed to collect GST on OS sales, the ATO might be able to claim that since they can do that, they must have financial functions in this country and are therefore liable to pay company tax here. Besides, collecting it is not the issue, those sellers who are regstered for GST collect it on domestic sales now, so they would simply widen the collection to include OS sales. It's the administration of it that would cost so much, the volume of sales involved would mean additional staff and resources to manage it all, and probably a lowering of the threshold at which businesses would need to register to collect GST.

Re: GST on online sales over $20

beautysecretfashion — Wed, 22 Jul 2015 07:21:27 GMT

Aus Govt want Aussie importers NOT ebay to pay GST on goods purchases overseas.

Some sellers who do a BAS statement do collect GST from their ebay sales because no doubt the big sellers are paying importers tax when they bring in over $1000 at a time.

The way it is going to be implimented will be interesting. Aust cannot ask an overseas business to collect the GST on their behalf.

There is talk of it being added to the sale at the end of purchase? So depending on one pays, ie: credit card then the Bank would pass the GST on??

Perhaps when we go to collect our deliveries from overseas the amount of value of goods is noted by Aust Post or whoever the delivery service is - then that record is forwarded to the ATO and perhaps we get a monthly account sent to us.

This would mean that we might be given a number (not ABN) that we will need to put on our delivery address?

Who knows??

All I know is it means we the Aussie small seller will be even more disadvantaged and less compettive with overseas sellers who do not need to factor in the GST although countries like USA have Sales tax which I suppose is the equivalent. Great Britain and New Zealand have VAT I believe.

I just want the revenue collected to be spent on things that need the money ie health and education.

JMO

Re: GST on online sales over $20

beautysecretfashion — Wed, 22 Jul 2015 07:29:53 GMT

Just a thought, the Aust Govt could make us use our TFN every time we make a purchase from overseas. The TFN could then be placed on the address label etc... but then is that a safe method, having our TFN made public??

The mind boggles on how they are going to collect it?

Re: GST on online sales over $20

davewil1964 — Wed, 22 Jul 2015 07:36:15 GMT

But, we the Aussie small seller who is not an importer will be advantaged compared to somebody who imports. And all people buying goods from overseas will be importers, thus helping locals and leaving resellers no worse off, compared to foreign sellers.

Re: GST on online sales over $20

pennyforum14 — Wed, 22 Jul 2015 07:54:57 GMT

In the UK, consumers have to pay VAT on any overseas purchase over GBP15. The fee is collected by the Royal Mail Service who add a GBP8 fee for the service. So if you buy something for GBP16, you pay 15% VAT, that's GBP2.40 PLUS GBP8 to the PO for processing. That makes your GBP16 purchase into a GBP26.40 bill, and a very unattractive proposition (which I guess is what it was intended to do). What's worse, the wording of the documentation from the PO gives the impression that the charge is for unpaid postage rather than VAT and processing and this cause a lot of angst on another site I sell on where UK customers are always complaining in the forums about sellers underpaying shipping. I hope if it does happen here it will be handled better.

Re: GST on online sales over $20

phorum_junkie* — Wed, 22 Jul 2015 08:32:47 GMT

Close but no coconut Penny. With parcels that are delivered by Royal Mail they do not usualy implement any charge for lower priced items, in my experience up to about £50. It is a different story if the sender uses a courier, they will always charge the VAT (GST), the import duty and a rather heavy handling fee.

Re: GST on online sales over $20

pennyforum14 — Wed, 22 Jul 2015 08:42:11 GMT

I'm just going by what I read on the forums on the other site PJ, at least once a day there is another UK buyer asking what an they do about their seller who didn't pay enough postage and they got hit with the bill (I believe the wording on the collection card says something like "postage fees owing" which leads the buyer to think the seller has ripped them off by underpaying postage). Then the regulars point out to them that it is actually their government's VAT, and associated fees, that the seller cannot pre-pay these fees and that it is the buyer's responsibility to pay it just like with customs duty. It does not go down well.

Re: GST on online sales over $20

digital*ghost — Wed, 22 Jul 2015 13:17:54 GMT

@davewil1964 wrote:
But, we the Aussie small seller who is not an importer will be advantaged compared to somebody who imports. And all people buying goods from overseas will be importers, thus helping locals and leaving resellers no worse off, compared to foreign sellers.

Unless the goods are manufactured in Australia, someone, somewhere down the line, has to be the importer. The only difference is how many suppliers in the Australian section of the chain down to the retail consumer.

For a great many products, the threshold being lowered to $20 will not advantage small and/or local business over OS business, not as far as I can see it, anyway, since the price gap is quite often more than the GST, even accounting for extra processing fees and so forth. And for those who import items that retail below the proposed threshhold, and especially those who keep their purchases under the current threshold (eg moi ), they'll be less competitive than they aready are with OS sellers, and less competitive than large retailers who have bigger buying power and can get cheaper unit prices to help off-set import charges.

Some local retailers will be advantaged, for some it will be compared to other local retailers, others compared to overseas retailers, a select few to both, and many simply disadvantaged (on the retail front).

Re: GST on online sales over $20

phorum_junkie* — Wed, 22 Jul 2015 14:22:29 GMT

Penny I don't have to go by the UK boards, I live in the UK for half the year so know very well how it works here, There is a seller in India I used to buy from used India post and Royall Mail for parcels and I never had to pay anything then they changed to a courier company and I got whacked with a large charge. Sometimes the courier coompanies will insist on payment before they will deliver the parcel, some just send you a bill later.

t is not perculiar to the UK either, there are many countries where the import charges and taxes are even higher than here in the UK which is why sellers should always have the blurb about all taxes and charges etc being the responsibility of the buyer.

Now that PB are operating in the UK they collect any duty or taxes before sending and the delivery charge a buyer sees will iinclude those fees. If the Au government does lower the level for the payment of GST and import duty then buyers will know up front what the charges will be before buying.

Re: GST on online sales over $20

misterforgetfulsbooks — Thu, 23 Jul 2015 01:07:46 GMT

if you import and resell, then the GST you paid is written off against the GST you collect in the sale of your goods

Re: GST on online sales over $20

gec2002 — Thu, 23 Jul 2015 01:30:37 GMT

I am all for the GST be lowered anything that even slightly levels the playing field. Unfortunately I can see that it would become like the bad old days pre GST when we had Import Duties and the invoices would be lowered to reduce the duty. So the chinese seller in Hong Kong gives you the nod, and a wink and suddenly your $800 camera will arrive with a $200 invoice or is a gift??.

Junkie just because you weren't being charged by Royal Mail doesn't mean you shouldn't have been charged. The avoidance of VAT and import duties in England is illegal.

Re: GST on online sales over $20

digital*ghost — Thu, 23 Jul 2015 01:49:49 GMT

@misterforgetfulsbooks wrote:
if you import and resell, then the GST you paid is written off against the GST you collect in the sale of your goods

Only if A) you can sell your goods after they start costing you 20-30% more, and B) you're registered to collect / pay GST.

The threshold being lowered is not going to level the playing field, it will be just as uneven as it ever was, just in different places.

Re: GST on online sales over $20

everard6920 — Thu, 23 Jul 2015 01:59:21 GMT

Well, I import all of my items so this will affect me - the only good thing is that all of my competitors are overseas.

So, they can buy it from me with the 10% mark-up for GST applied, or they can buy it overseas from a competitor and pay the 10% when they do that.

I'd be really interested to find out how they're going to collect this. There was a study awhile ago that showed that the cost of collection would exceed the revenue.

I feel like this could become very confusing if it isn't done properly. And I don't trust them to do it properly.

Re: GST on online sales over $20

everard6920 — Thu, 23 Jul 2015 02:03:22 GMT

@digital*ghost wrote:
@misterforgetfulsbooks wrote:
if you import and resell, then the GST you paid is written off against the GST you collect in the sale of your goods
Only if A) you can sell your goods after they start costing you 20-30% more, and B) you're registered to collect / pay GST.

The threshold being lowered is not going to level the playing field, it will be just as uneven as it ever was, just in different places.

How would they cost 20 - 30% more? Wouldn't they cost 10% more?

Re: GST on online sales over $20

digital*ghost — Thu, 23 Jul 2015 02:10:27 GMT

@everard6920 wrote:
How would they cost 20 - 30% more? Wouldn't they cost 10% more?

It won't just be 10% added on, there'll be processing fees etc

One of the main reasons the threshold is as high as it is, is because it was determined not cost effective to collect GST on goods under $1k. To make it cost effective, they will charge additional fees. As it stands, most people pay an extra 20-30% on imported goods over $1k after GST, import duties and any brokerage fees have been paid, so it stands to reason the same percentage is likely to apply if the threshold is lowered. It might be even higher in some cases if they whack a flat processing fee similar to the one in the UK (around $15.00 AUD I think).

Re: GST on online sales over $20

everard6920 — Thu, 23 Jul 2015 02:19:40 GMT

@digital*ghost wrote:
@everard6920 wrote:
How would they cost 20 - 30% more? Wouldn't they cost 10% more?
It won't just be 10% added on, there'll be processing fees etc

One of the main reasons the threshold is as high as it is, is because it was determined not cost effective to collect GST on goods under $1k. To make it cost effective, they will charge additional fees. As it stands, most people pay an extra 20-30% on imported goods over $1k after GST, import duties and any brokerage fees have been paid, so it stands to reason the same percentage is likely to apply if the threshold is lowered. It might be even higher in some cases if they whack a flat processing fee similar to the one in the UK (around $15.00 AUD I think).

True. Knowing our government the fee will be something astronomical.

Re: GST on online sales over $20

chameleon54 — Thu, 23 Jul 2015 04:58:25 GMT

@misterforgetfulsbooks wrote:
Why not just get ebay to collect it off the sale of anything sold here in Australia?
ie: you sell items in Australia, you pay Australian taxes - level playing field

Maybe I,m just reading your post differently to what you intended. Maybe you where referring only to O.S sales in Australia. If Not......

What about the millions of Australians who use ebay a few times a year to sell their own personal items ? Should they be required to charge GST, register for an ABN and fill in the paper work four times a year when they sell an old family bunk bed or camera on ebay ??? Should they be expected to do the same if they sell through facebook, gumtree or the local market ??? If not why just on ebay?

The threshold for requirement for GST registration of a business is $75,000. This is deliberately designed to allow start ups to build a bit of scale, before having to go through the GST paperwork nightmare. Should a small ebay business turning over $15,000 worth of second hand books or clothes PA be required to register for GST when other similar small B & M stores turning over less than $75,000 PA dont have the same requirements ? How is this a "level playing field". ???

Larger ebay businesses turning over more than the threshold are already required to register for, and charge GST. The ATO has taken steps to data match sellers tax records with ebay sales records so is being pro-active in policing this issue.

The problem with collecting GST on OS sales of less than $1000 is the cost of collection is more than the revenue collected, meaning taxpayers are paying government agencies to protect Australian businesses from overseas competition and the consumer is paying extra on top of this for the actual GST paid. It just seems to be a very expensive totally unproductive, nonsense system.

If introduced it will just be another example of governments extravagant waste and inefficiency paid for by taxpayers. If society wants taxpayers to subsidise and pay protection money to support local retailers, ( and tarrifs have long ago been phased out for other industries, so what is so special about the retail industry ? ) there must be a more cost effective, efficient, financially productive system than collecting GST on all overseas sales over $20.

Re: GST on online sales over $20

gec2002 — Thu, 23 Jul 2015 05:05:38 GMT

So what your saying is its OK while I pay no GST on imported materials and have an unfair advantage but its wrong if you have to pay what other manufacturers pay now. So having a 10% advantage by not paying GST on items sold (you said you are not registered) and a further 10% advantage by currently not paying on imported materials is not enough.

You buy your materials o/s now for $10 and sell for $22 Profit $12

A GST registered businees that buys in more than a $1000 lot o/seas

Buys their material $10 unit cost plus 10% GST = $10 + $1 GST = $11
Sell the item for $22 which includes $2 GST. Profit $22 - $11 - ($2 GST Collected - GST $1 Paid) = Profit $10

You may well argue that they buy at a lower unit cost because they buy in bulk, but that has nothing to do with GST.

Re: GST on online sales over $20

gec2002 — Thu, 23 Jul 2015 05:14:56 GMT

Sorry you are wrong it is not proposed to collect GST on sales to Overseas customers at any sale price. The change in GST is only relevant to items imported into Australia which are currenty GST exempt if less than $1000, ie items purchased from Overseas and imported into Australia, not those sold by Australians to Overseas customers.