topic Re: GST for items sold by Australian sellers in Selling

GST for items sold by Australian sellers

foxinsox2000 — Mon, 04 Jun 2018 03:28:52 GMT

If an Australian seller becomes registered for GST, how it does it work when their items are sold worldwide?

For example, if an item was formerly priced at $50, the seller would change the price to $55, and pay $5 to the ATO if it sells to an AU buyer.

However, if the item sells overseas then no GST is payable. Ethically the price should be $50 for overseas buyers, $55 for AU buyers.

Am I correct?

How does eBay facilitate this?

Or is it one of those areas that they say 'not our problem, try to find a workaround like with all the other inconsitencies with the eBay platform.'?

This is not a question about how to set your price point, it's about how to ethically and transparently manage pricing, tax, and the global market.

Is there a correct, legal, ethical way to manage this? Or does the addition of the GST component for AU buyers just end up as something O/S buyers have to wear, unless the seller chooses to refund the GST to every O/S buyer?`

Are eBay a global marketplace that can't yet manage these ethical and legal trivialites?

Re: GST for items sold by Australian sellers

digital*ghost — Mon, 04 Jun 2018 04:21:49 GMT

eBay don't have a solution for it, but the simplest way is to use the additional funds to subsidise postage costs, so in your example reduce postage by $5 to international customers.

Re: GST for items sold by Australian sellers

clarry100 — Mon, 04 Jun 2018 08:44:48 GMT

What DG proposes seems like a simple solution.

It shouldn't have to be this way, but ebay don't facilitate it at all.

Just a general observation on your pricing model, if I may...

You don't have to add the full GST 10% onto prices when you first register for GST.

This is because you can claim back the GST you pay out on business related expenses.

This reduces the actual amount you owe to the ATO. Typically its somewhere closer to 5% actually.

If you add on the full 10% for GST but don't pass this full amount on to the ATO then technically you would be acting illegally.

You (or your BAS consultant) would need to do up a pricing model for your particular items/business to figure out where you really sit.

Re: GST for items sold by Australian sellers

brerrabbit585 — Mon, 04 Jun 2018 09:28:13 GMT

Your statement is more than a bit misleading, clarry, because you pay 1/11th of your sale price to the govt in gst, then you claim back the gst on your costs. You don't actually pay one first and then claim the other back, you just deduct one from the payment you make, but you still have to add 1/10th to the price. The way your statement reads, you don't have to add 10% onto the price.

Re: GST for items sold by Australian sellers

meliquidation — Mon, 04 Jun 2018 10:54:48 GMT

I was recently in account settings and I came across something asking for a tax update (ie ABN).

As far as I understand it Ebay won't withhold GST (and remit directly to tax office) on items australian sellers sell when the Australian seller is already registered for GST. If that's the case then there wont be any change at all for those Australian sellers and your question becomes irrelevant.

I'm actually a tax agent and that's what I've heard coming down the grapevine from the tax side of things when this was originally planned. It's always possible that something has changed that I've missed as I've been bogged down and am currently a few months behind my tax knowledge but that's my understanding of it.

Re: GST for items sold by Australian sellers

meliquidation — Mon, 04 Jun 2018 10:58:44 GMT

Any seller with turnover over $75k per annum already should be registered for GST. We are - and remit the appropriate amounts to the ATO on our quarterly BAS. I dont believe Ebay will charge 10% on our listings as that would double the GST the ato is getting and would not be correct.

Actually - on that topic it's worth asking ebay. I will ask now.

Re: GST for items sold by Australian sellers

meliquidation — Mon, 04 Jun 2018 11:01:41 GMT

https://sellercentre.ebay.com.au/content/gst-fees-ebaycomau

As I said before: Australia Ebay businesses already registered for GST will be exempt from the change.

Re: GST for items sold by Australian sellers

meliquidation — Mon, 04 Jun 2018 11:13:11 GMT

Here is a picture of our seller dashboard. Note the bit in the red rectangle (says we are exempt from the new regime).

Re: GST for items sold by Australian sellers

digital*ghost — Mon, 04 Jun 2018 11:15:59 GMT

@meliquidation - that's for the GST on fees charged by eBay, which was introduced last year.

Re: GST for items sold by Australian sellers

foxinsox2000 — Sun, 17 Jun 2018 04:32:09 GMT

Thanks to all who replied, took me a while to get back to the forum.

It was really just a question about the ability (or otherwise) to list "Inc GST" pricing for AU buyers and automatically calculate "Ex GST" for overseas buyers.

Many webstores do this. Just wondered if the eBay platform supports it, but as advised, no it doesn't.

Thanks!!

Re: GST for items sold by Australian sellers

laalithaj — Fri, 20 Sep 2019 07:28:55 GMT

I am selling with in Australia and yearly income is less that $75000. I have registered my ABN for GST.

Sale price for my listings does not have extra gst paid by the seller. I am very confused , how to logde the Activity statement I have no idea how to caculate the total GST . Why Ebay is not providing the GST amount. Your help is really appriciated

Re: GST for items sold by Australian sellers

lyndal1838 — Fri, 20 Sep 2019 07:49:26 GMT

You should not have registered for GST if you do not turn over $75000. Now you have to give the ATO 10% of your turnover.

Add 10% to the prices you list your items for and then work it out on your BAS and send it to the ATO.

Ebay cannot do it for you as they do not know your GST status.

You really should see an accountant to start you off if you have no idea what you are doing.

Re: GST for items sold by Australian sellers

davewil1964 — Fri, 20 Sep 2019 08:06:21 GMT

1/11 of your revenue.

As I'm sure the ATO would have told you.

And definitely see an accountant. You've already potentially cost yourself money (although you don't pay income tax on the GST collected, so you might be better off.

Edit: eBay cannot and should not provide details of GST collected by YOU. That is your job.

Re: GST for items sold by Australian sellers

davewil1964 — Fri, 20 Sep 2019 08:07:41 GMT

I'd concentrate on getting more stock, personally. It is pointless paying for a store to list 12 items.

Re: GST for items sold by Australian sellers

maranock — Sat, 21 Sep 2019 05:53:30 GMT

For many small businesses it is actually a good idea to be registered for GST even if they are nowhere near the $75,000 mark. If you have to buy a lot of imputs to make your products then being registered and claiming the GST that you have paid on your imputs can make a big difference to your bottom line. It certainly helps my business, as well as making a business seem more legit.

Re: GST for items sold by Australian sellers

lyndal1838 — Sat, 21 Sep 2019 07:01:49 GMT

We are at the other end of the scale.....we have a business that offers services so have very few input tax credits.

Last month we collected $1424 in GST but only claimed $290 in credits....and that was an unusually large claim as we paid vehicle insurance, workers compensation, green slip for registration, a service for the vehicle and our accountant....all within 30 days.

Without those claims we would have only had about $30 in credits.

I can see how a manufacturer would be able to take advantage of credits but it is certainly not for everyone. I object to giving 10% of our turnover to the ATO just because we have a $75000+ turnover. lol

Re: GST for items sold by Australian sellers

porcelain_dolls_by_me — Sat, 21 Sep 2019 09:09:26 GMT

My advice is that to save on administrative time do not register for GST unless absolutely necessary.

The $75.000 turnover requirement to register for GST is not as simple as one might imagine.

For example, is calculating the $75.000 turnover value it is my understanding you exclude export sales (which are GST exempt) and also the value of goods that have GST input credit attached.

Re: GST for items sold by Australian sellers

davewil1964 — Sat, 21 Sep 2019 11:48:11 GMT

It's MY understanding that the $75K definitely includes all domestic turnover (and could well include ALL turnover), regardless of whether GST input credits are available.

There would be very few businesses that don't have input credits for their supplies. What you claim could well, especially in the case of online sellers who post their goods, involve turnovers of well in excess of $150k before triggering a requirement to register for GST.

Good for you if you believe that, but I doubt the ATO will agree. And their fines are normally disproportionate to the crime.

Re: GST for items sold by Australian sellers

lyndal1838 — Sat, 21 Sep 2019 17:26:55 GMT

@porcelain_dolls_by_me wrote:
My advice is that to save on administrative time do not register for GST unless absolutely necessary.
The $75.000 turnover requirement to register for GST is not as simple as one might imagine.
For example, is calculating the $75.000 turnover value it is my understanding you exclude export sales (which are GST exempt) and also the value of goods that have GST input credit attached.

It was absolutely necessary for us to register for GST when it first came in....nothing has changed since.....we still turnover more than $150000 a year. And the administrative time and costs have not changed either.

I take it that you did not see where I said we were in a SERVICE industry so there are no export sales.

The turnover definitely includes goods/services that have input tax credits attached or there would be no provision to claim them in the BAS.

Re: GST for items sold by Australian sellers

digital*ghost — Sun, 22 Sep 2019 06:36:40 GMT

@davewil1964 wrote:
It's MY understanding that the $75K definitely includes all domestic turnover (and could well include ALL turnover), regardless of whether GST input credits are available.

There would be very few businesses that don't have input credits for their supplies. What you claim could well, especially in the case of online sellers who post their goods, involve turnovers of well in excess of $150k before triggering a requirement to register for GST.

Good for you if you believe that, but I doubt the ATO will agree. And their fines are normally disproportionate to the crime.

"Your GST turnover is your gross business income (not your profit), excluding any:

GST included in sales to your customers
sales that aren't for payment and aren't taxable
sales not connected with an enterprise you run
input-taxed sales you make
sales not connected with Australia."

The "sales not connected with Australia" seems to throw people, even at the ATO apprently, as I think it's interpreted as a general "sales to international customers", but near as I can tell it's actually referring to sales that take place out of Australia entirely (eg I set up a B&M store for my business in the US, those sales would be subject to the local tax laws and not counted towards my turnover in Australia, though the profit / income I get would certainly be counted as part of my overall income - not sure if dropshipping from say China to international customers would count or not, as you're still being paid the entire sale price directly and the income isn't being subected to any international tax laws etc - question for an actual accountant, I guess, that may even be true for the rest of what I've said ).

Re: the pros and cons of registering as a small business, it's going to be different for every business - not everyone will pay input tax on stock purchases, for example (if you import and keep the value of shipments under $1k, and purchase from sellers who are not required to charge you GST, for example - that was me for years, but I registered not long after the new rules were brought in when I opened my own website (it was getting to the point where I was required to anyway, and with all 4 stores, I have to stay that way for the forseeable future) - I still keep my imports under $1k, because duty and admin fees suck ). You can get a competitive edge by not registering until required, but if it was by undercutting competitors, you'll lose that when you do register, unles you can handle the cut to profit, so it will make a difference whether someone is in it to build a business long-term and have it be their sole venture, or not. I had to raise my prices when I registered, and that sucked, but I was lucky imports became 10% more expensive (on eBay) around the same time. I wish it was easier to convery that my prices include GST on eBay, though, because my items are purchased by other sellers a lot, some of whom are GST registered themselves, and it often makes me cheaper for them than my non-GST registered competitors.

Right now, the only input tax I claim on my BAS is from postage costs and postal supplies, plus the occasional amount from stationary, office equipment, tools etc. My international suppliers have my ABN so don't apply GST on my orders (all that would do is make me pay more up front, and my GST bill would be the same, so not much sense in doing that), but I do have to send an amount to them every 3 months that makes me a little sad (the trick is to never consider it your money, which it isn't, you're just collecting it for the ATO - I have a dedicated bank account for all my tax and put a certain percentage of my turnover in there a week for GST and income tax, but you have to be disciplined with it).