topic Re: eBay overcharges by charging final value fees on GST in Selling

eBay overcharges by charging final value fees on GST

worldofannwn — Wed, 14 Jun 2023 05:37:18 GMT

I have read many people complain about overcharging here only to be told that it's all correct and legal no matter how unfair it might seem; I would be happy for someone to point out if and how that applies to the following situation because I simply can't see it no matter how I look at it, and there is a dearth of information out there about GST on commissions.

1. Suppose I sell an item for $100 and eBay takes 10% FVF (to keep it simple), then I end up with $90 and eBay with $10 as the variable part.

2. Since both parties are registered for GST, I collect $100 + $10 GST from my customer and eBay collects $10 + $1 GST.

3. The ACCC says display prices must include all applicable taxes and charges, and eBay says listing prices include GST where appropriate.

4. The listing price for a $100 item is therefore $110 GST inclusive. eBay charges 10% FVF on this, and collects $11 GST inclusive. They then add in any other applicable fees and charge GST on the total, or another $1.10 on top of their fee.

5. This amounts to fees being approximately 1% higher than advertised and is a significant gouge out of profits.

Unsurprisingly, most responses from eBay customer service have disingenuously asked where the error in the calculation is, or exposed their ignorance of the law. The last response promised that the matter was being passed over to a specialist team (specialising in fobbing off customers, no doubt) and assured me there was no need to email again. I don't know about need but I certainly agree there is no point.

A read through the ATO community website indicates that their position is that we need to contact eBay to sort out GST issues; the ACCC seems uninterested in looking into it, presumably considering it's not a matter of public interest.

Before I start down the path of legal action I would be interested to know if anyone else has been affected by this and what was done about it.

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Wed, 14 Jun 2023 08:18:54 GMT

You pay GST on the ebay fee ( for service), not the sale. If you have your ABN registered with ebay, they do not collect GST on the fees you pay to ebay.

Trying to keep it simple.

Re: eBay overcharges by charging final value fees on GST

sugar249 — Wed, 14 Jun 2023 08:25:25 GMT

Here we go again, look back at about 200 other posts covering this exact subject.

Take it up with your lawyer, and they will laugh at you as well. If Ebay were breaking the law, someone would have already taken the appropriate action.

If you don't like it go to Gumtree and Facebook market place, where you wont be paying GST but will be scammed.

Enjoy

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Wed, 14 Jun 2023 08:42:37 GMT

You list an item for $100 if you are registered for GST, that price includes GST. If you are not registered, the listing price does not include GST, as it is illegal for an unregistered seller to charge GST.

So you have sold the item for $100 and it is up to you to declare the sale and GST to the ATO.

Now ebay collects there sale fee, service fee, whatever you want to call it,but it is the under the service part of GST. Now using your example of 10% sale fee. Ebay collects $10 as there Fee and is also required to collect GST on this payment, so there fee is $10 (+ $1 GST) ebay keeps there $10 and remits the $1 GST to the ATO.

You declare your sale to the ATO, and Declare receipt of $10 GST (from your sale price, nothing to do with ebays $10 Fee.) You also claim a $1 expense for the $1 GST that you have paid to ebay.

As stated earlier, register your ABN with ebay, and they will not collect GST on your fees.

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Wed, 14 Jun 2023 08:55:02 GMT

Before I start down the path of legal action I would be interested to know if anyone else has been affected by this and what was done about it.

-----------------------------------

Don't waste your time and money, the process is correct, just ask your accountant, if you don't have one, get one. It will be much cheaper.

Re: eBay overcharges by charging final value fees on GST

imastawka — Wed, 14 Jun 2023 09:08:56 GMT

I would hope with over 17K+ feedback as a seller, that you have an accountant to explain it all to you.

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Wed, 14 Jun 2023 09:16:02 GMT

2. Since both parties are registered for GST, I collect $100 + $10 GST from my customer and eBay collects $10 + $1 GST.

______________________________

Incorrect, You collect $100 including, $10 GST, The $10GST is not yours and is not added to the sale price,

So in effect you have sold the item for $90.

Then of course there is the ebay sale/service fee + GST to also be deducted, so you net sale is about $79

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Thu, 15 Jun 2023 23:45:02 GMT

Please read my post.

eBay is charging their fees on a GST inclusive price. That means, by my example, that they are collecting fees on $110 when I actually only receive $100, $10 of that being collected on behalf of the ATO.

I have my ABN registered eBay and they still collect GST on their fees. I have been unable to get them to fix this, either.

Nonetheless, if eBay were not collecting GST on my fees, under this scenario they are still collecting fees when they shouldn't. As far as I understand, you either charge commission on an ex GST price and then collect GST, or you charge commission on a GST inclusive price. Not both.

Trying to keep it simple.

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Thu, 15 Jun 2023 23:50:34 GMT

I don't think a lawyer will laugh at me if they understand my question, which you clearly don't.

But please, go ahead and point to the 200 other posts that cover eBay charging commission on the GST component of a sale. I covered that in my opening sentence.

If you have nothing useful to contribute, please don't contribute.

Re: eBay overcharges by charging final value fees on GST

sugar249 — Fri, 16 Jun 2023 01:45:21 GMT

@worldofannwn wrote:
I don't think a lawyer will laugh at me if they understand my question, which you clearly don't.

Great, can you let us know what your lawyer says,

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Fri, 16 Jun 2023 01:59:09 GMT

No, I don't list an item for $100. The price of my item is $100, but since I am registered for GST I am required to collect $10 and since the ACCC says I must include that in my display price, I list the item for $110.

So I have sold the item for $110 and I declare the sale and the GST to the ATO.

Now eBay collects their fee, and this seems to be where the problem is:

Not registered for GST:
- Item sale price: $100
- Gross: $100
- eBay fees: $10
- GST on fees: $1
- Net: $89
- Effective fee: 10%

Registered for GST:
- Item sale price: $110
- Gross: $100
- GST collected: $10
- eBay fees: $11
- GST on fees: $1.10
- GST remitted to the ATO: $8.90
- Net: $89
- Effective fee: 11%

I receive the same amount whether I am registered for GST or not, except that being registered I don't pay the GST (only the end-user pays) so the $1 that goes to the ATO in the unregistered case is winding up in eBay's coffers. Overall that extra $1 is increasing my final value fees by 1% above the stated value, so how is that not overcharging?

If this is legal, it shouldn't be. It's not supposed to cost anything to be GST-registered. The only information I can find on the ATO site is examples, although they do show that it's either commission on ex. tax + GST on commission or commission on GST inclusive. eBay is doing both and I can find no precedents or rulings either way.

I already have my ABN registered with eBay and have done since July 2018. They are still charging GST and I have had no success getting them to fix it. They even had the temerity to tell me the ATO hadn't approved it. However even if they were not charging GST, the only difference would be that I remit the full $10 to the ATO. They are still charging fees on the GST component.

I appreciate you taking the time to assist, but I am not convinced that it is correct.

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Fri, 16 Jun 2023 02:03:15 GMT

The sale price is $100 and eBay charges $10. With GST, the list price is $110, and eBay collects $11.

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Fri, 16 Jun 2023 02:11:27 GMT

I would but I think the answer would be beyond your limited comprehension. Now please stop trolling.

Re: eBay overcharges by charging final value fees on GST

padi*0409 — Fri, 16 Jun 2023 02:21:10 GMT

@worldofannwn wrote:

I would but I think the answer would be beyond your limited comprehension. Now please stop trolling.

Maybe if you had spent the same amount of time talking to eBay about your GST registration problem as you have posting here - there wouldn't be a problem anymore.

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Fri, 16 Jun 2023 02:21:31 GMT

I would hope that people would realise that, having discovered an anomaly that eBay refuses to look into, I am seeking advice and opinions of others who may have spotted the same anomaly before taking any legal action, which may include but is not limited to contacting an ombudsman, consulting a lawyer or having an accountant explain it to me.

I also don't see how my level of feedback or the question of having an accountant has any bearing on the matter.

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Fri, 16 Jun 2023 02:31:54 GMT

I can read your posts but they are full of errors, Go and PAY an accountant to be told exactly the same.

A $100 domestic sale does not increase to $110.

Ebay FVF is charged on the TOTAL invoice. (Quite Clear, legal and approved )

Fees when you sell your item

You pay one final value fee for items you sell on eBay, with no third-party payment processing fees.

The final value fee is calculated as a percentage of the total sale amount per item (item price + postage and handling charges + any applicable taxes), plus a fixed charge per order.

You have agreed to this Fee structure. So to save yourself some money, Copy the above, place it in an envelope with a couple of hundred and slide it under your lawyers door. Then walk away before the laughing starts.

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Fri, 16 Jun 2023 02:50:52 GMT

-------------------------------

As per my previous. Ebay charges one FVF

Re: eBay overcharges by charging final value fees on GST

worldofannwn — Fri, 16 Jun 2023 03:46:30 GMT

You have no idea how long I have spent being trying to talk to eBay and being ignored and stonewalled. Maybe if you don't have anything useful to add you could avoid adding it anyway.

Re: eBay overcharges by charging final value fees on GST

*sons_n_daughters* — Fri, 16 Jun 2023 03:47:32 GMT

My head hurts. This is going to be one of those 50+ message threads, I can see it a mile off.

Re: eBay overcharges by charging final value fees on GST

gutterpunkz05 — Fri, 16 Jun 2023 04:03:11 GMT

Yeah I am out.

They can pay for assistance if still needed.