topic Re: GST in Selling

GST

brianhe — Tue, 01 Feb 2022 05:31:51 GMT

Why do I have to pay EBay GST on Postage Costs associated with an item, when I don’t use them as a postage service.

I post items from a POST OFFICE and then pay more GST on that same postage cost.

Re: GST

padi*0409 — Tue, 01 Feb 2022 05:38:32 GMT

It's been like that for many years now on eBay - it's a Goods and Services Tax, postage is a service. You should be building it into your price so that, in effect, the buyer pays for it.

Re: GST

etb321 — Tue, 01 Feb 2022 06:45:24 GMT

True, but the point being made is the gst is being paid twice. First to Ebay and again at the AP counter.

Tom

Re: GST

repentatleisure1952 — Tue, 01 Feb 2022 06:48:55 GMT

Sigh... over 1k feedback as seller... and never read an eBay announcement.

Re: GST

davewil1964 — Tue, 01 Feb 2022 07:55:08 GMT

Wrong.

You are paying GST on eBay's fees, not postage. You've been around for a while, eBay have been charging this for many years. You've only just noticed?

Re: GST

brianhe — Tue, 01 Feb 2022 08:13:40 GMT

I beg to differ. If I sell an item for $10 and apply $2 postage. EBay charge their fee on $12.

Re: GST

repentatleisure1952 — Tue, 01 Feb 2022 09:05:45 GMT

@brianhe wrote:
I beg to differ. If I sell an item for $10 and apply $2 postage. EBay charge their fee on $12.

Well yes... that has been the case for at least 8 years.... did you just discover this?

You only pat GST on the fees... as davewill has said

Re: GST

davewil1964 — Tue, 01 Feb 2022 09:09:48 GMT

Correct.

You pay fees (and GST) on the total value of the sale. Including the postage component. The fees eBay charge, however, do not include GST on postage, but GST on the fees eBay apply to postage.

As has been said, you are not paying double GST.

If that is beyond your grasp, maybe do Accounting 101. Or find somewhere (not eBay) where common accounting doesn't apply.

You could always contact your local Member of Parliament. If they bother to reply, they will inform you that that is the law and has been for many years.

Re: GST

gutterpunkz05 — Tue, 01 Feb 2022 09:15:21 GMT

It does not matter if you beg to differ or not, ebays fees on the total invoice is totally above board, and GST is applicable to ebay fees.

Re: GST

k1ooo-slr-sales — Tue, 01 Feb 2022 10:22:06 GMT

**what everyone else has said** plus

For many years eBay didn't pay much tax in Australia despite huge turnover/volume of sales that generated a lot in fees.

The federal government went after eBay, Google, Facebook and other big tech to get them to pay more tax.

The easy out for eBay was to levy sellers 10% GST on their eBay fees, something that should have been happening for many years prior.

When eBay charges 13.4% fee the GST that consists of 12.2% eBay fee + 1.2% GST.

So technically, you are right that you are paying GST on postage, but only 1.2% . . . that is actually acounted for as GST on 12.2% fees.

Nothing wrong or illegal about it.

Personally, I don't have a problem with the GST on fees as it is paid to the government. If there was no GST on eBay fees the government would look elsewhere to make up the tax shortfall and ALL taxpayers would make up that amount sellers would not be paying.

Savvy sellers take fees into account when pricing their items and postage. On your example, just charge $2.30 and all fees on postage will be recovered (13.4% x $2 = $0.27).

The way to make this work is that you put in your description something like:

Postage & Handling is $2.30 for posting through Australia Post.

DO NOT give a breakdown of the what you charge for p&h i.e. DO NOT mention that you are recovering your fees on postage.

Re: GST

brianhe — Tue, 01 Feb 2022 13:04:05 GMT

I certainly agree with most of your comment. But why should sellers have to realistically pay 11.2% GST. Surely this would be a fair bit overall for volume sellers. I am not referring to myself as I am only a small seller and buyer.

Re: GST

brianhe — Tue, 01 Feb 2022 13:05:02 GMT

And therefore, as eBay charge fees on, total selling price and postage costs combined, then charges GST on the fees, isn’t that charging pro rata GST on postage

Re: GST

k1ooo-slr-sales — Tue, 01 Feb 2022 14:14:47 GMT

I did say in my post:

So technically, you are right that you are paying GST on postage, but only 1.2% . . . that is actually acounted for as GST on 12.2% fees.

The reality is that you are paying GST on the eBay fee . . . which is levied against the transaction total i.e. amount paid by the buyer.

You can interpret that any way you want to, but you have the power to negate that through my P&H suggestion . . . making GST on postage a non-issue.

The reason eBay charge fees on postage have been done to death on other threads back when it was introduced.

The short explanation is that eBay wants sellers to include the postage cost in their pricing and have their listings promoted as "FREE POSTAGE" as they say they have research that says buyers are more likely to buy an item that has FREE POSTAGE.

We all know the reality that postage isn't free.

Using your $10 item + $2 postage example, a seller offering a $12 item with free postage pays fees on $12.

Why should a seller who offers a $10 item with $2 postage pay less fees?

Re: GST

k1ooo-slr-sales — Tue, 01 Feb 2022 14:23:34 GMT

furthermore, you might ask:

"but what about auctions where you can't build postage into your pricing?"

Well, that too can be explained by the way eBay are trying to manipulate sellers.

eBay wants sellers to list as fixed price buy-now listings with free postage. They have said so very often. They talk about level playing fields and other convincing business concepts.

eBay will tell you they have research that says buyers like Buy-Now because they know the price, don't have to wait for an auction to finish and that Buy-Now items are more likely to offer FREE POSTAGE.

Bottom line is that eBay fees, GST and other listing conditions are known to those sellers who read up on selling and keep up to date with eBay announcements.

The whinging and whining comes about when sellers misconstrue and/or misunderstand eBay fees and GST on fees.

Re: GST

k1ooo-slr-sales — Tue, 01 Feb 2022 14:33:40 GMT

@brianhe wrote:
I certainly agree with most of your comment. But why should sellers have to realistically pay 11.2% GST. Surely this would be a fair bit overall for volume sellers. I am not referring to myself as I am only a small seller and buyer.

for sellers who transact over $75K on eBay they would have an ABN, and you start getting into them having to register for GST and all that BAS activity statements and GST credits/inputs.

Bottom line is that for these sellers the GST on fees is not an issue at all. Many of the larger businesses on eBay are not on the same fee structure as Joe Public occasional seller, they pay less due to the volumes they sell!

Re: GST

k1ooo-slr-sales — Tue, 01 Feb 2022 14:57:07 GMT

@etb321 wrote:
True, but the point being made is the gst is being paid twice. First to Ebay and again at the AP counter.

Tom

sorry Tom, but you sort of have that wrong on several counts.

First one being:

This thread is about sellers paying GST. The seller DOES NOT pay the GST on the postage at the Post Office . . . the buyer does as the "end user" in the transaction train. When a buyer pays for postage as part of the transaction it is the buyer paying for any GST on postage at the Post Office.

And secondly:

As many have pointed out, the GST collected by eBay is GST on the fees charged by eBay i.e.

- eBay provide a service,

- eBay charge a fee for service,

- eBay collects 10% as GST on the fee for service (not the postage)

- ALL GST collected gets forwarded to the Australian Government,

- GST stands for Goods & Services Tax.

Re: GST

brianhe — Tue, 01 Feb 2022 21:26:20 GMT

This could be discussed and debated forever, but the fact is, if postage is to be paid, then the seller is paying 11.2% GST overall on the postage. It is irrelevant whether it is on one item with postage or a thousand items.

Re: GST

k1ooo-slr-sales — Tue, 01 Feb 2022 23:11:25 GMT

@brianhe wrote:
This could be discussed and debated forever, but the fact is, if postage is to be paid, then the seller is paying 11.2% GST overall on the postage. It is irrelevant whether it is on one item with postage or a thousand items.

using the example you gave many posts ago, the buyer is paying the GST on the $2 postage, the seller is paying GST on their fees.

Not going to discuss this forever. I guess all that is left for me to write is "I tried". I'm out now.

Re: GST

padi*0409 — Tue, 01 Feb 2022 23:16:46 GMT

@k1ooo-slr-sales wrote:
Not going to debate this forever. I guess all that is left for me to write is "I tried". I'm out now.

Unfortunately logic isn't going to work here k1ooo, the OP is fixated on being "ripped off", and is never going to be convinced otherwise...............

.......join me in a soundproof room and we'll scream at the perceived injustice of the whole saga.......

Re: GST

countessalmirena — Tue, 01 Feb 2022 23:19:25 GMT

OP,

the best thing for you to you may be to book a time with your tax accountant and discuss this thread and the issue. it may give you peace of mind.