GST with discount coupons.

[letscleanupmycupboards]

Bought something and used a 10% off coupon code. When gst was added I discovered the gst amount was based on the original total not the discounted total. Not so bad when it’s a relatively small amount but if buying a bigger value item this is significant, I always thought the idea of a discount was eBay paid that portion. So I’m being charged a tax on money I have not spent which seems like it would not be legit. Doesn’t seem logical but a lot lately doesn’t.

[kopenhagen5]

The total sale amount is still the full amount and GST is charged on that amount irrespective of whom pays what portion.

Similarly if you buy meals for friends at a restaurant and pay 100, the GST is 10 even if one of your friends says, here is 20 towards the bill.

The seller is still paid the full amount which is the sale (invoiced) amount.

[letscleanupmycupboards]

Yes however if the discount was $300 paid by eBay why should I be taxed the $30 gst on that? If eBay has paid the amount. Just seems a little wrong.

[kopenhagen5]

I see you point.

I don't know if anyone has contested that issue with a favourable outcome.

I'm guessing it's down to keeping paperwork simple as you are still able to claim the GST for that invoice (if applicable) and eBay won't claim any GST. 

[countessalmirena]

You are taxed on the item's full amount (including shipping and insurance). The amount that is taxable is the customs value of the item. It doesn't affect the amount of that customs value if eBay gave you a redemption code or coupon or discount or voucher towards the purchase price, just as it wouldn't affect the amount of that customs value if a friend put money into your PayPal account to pay for half of it, or if family members chipped in on the total, or you had been given an eBay gift card which paid for part of it or all of it. The customs value remains the same. As per Information for Consumers (on the ATO website):

❝When you purchase goods sourced from overseas, shipping and/or insurance costs form part of the price of the delivered goods on which GST is calculated.❞

Even clearer is the following information which has recently been added to that page - probably in response to people phoning them and asking about this very issue.

❝Where the EDP operator offers a 'discount', GST is still calculated on the individual merchant's listed price. The 'discount' offered by the EDP operator is viewed as a part payment made by the EDP operator towards the cost of the good to you, as illustrated in Example 2.

__________________________________________________________

Example 2 – GST and discount offered by an EDP operator

Gavin lives in Australia and purchases a lens cover from a merchant in the US via

an EDP. The individual merchant lists the lens cover for sale on the EDP at a price

of A$66.00 (including shipping to Gavin's Australian address).

The EDP operator is offering a 5% discount on all purchases made on the EDP in

the week Gavin makes his purchase.

Merchant's price A$60.00 (GST exclusive)

GST A$6.00 (10% of merchant's price)

Less EDP discount A$3.00 (part payment made by the EDP operator)

Gavin pays A$63.00

The individual merchant's price of A$60.00 (GST exclusive) is not reduced by the

discount offered by the EDP operator. The EDP operator is required to charge

GST based on the merchant's price.

The discount offered by the EDP operator is viewed as a part payment towards

the cost of Gavin's purchase and does not reduce the GST payable.

__________________________________________________________❞

(Emphasis mine.)

You'll also see in the eBay User Agreement:

❝If you are a buyer, you may see "GST may apply" when viewing items on eBay that are located overseas. You acknowledge and agree that if you buy a low value item on eBay from outside Australia, you will be charged 10% GST on top of the seller's item price (applied in your cart and at checkout).❞

This makes it unambiguous and clear that the GST is charged as a component of the seller's item price, not the price that you pay if you have any sort of voucher or redemption code.

[k1ooo-slr-sales]

---

@letscleanupmycupboards wrote:
Yes however if the discount was $300 paid by eBay why should I be taxed the $30 gst on that? If eBay has paid the amount. Just seems to a little wrong.

---

hey cupboards, y’know, for the example you gave there would be members who would say “wake up to yourself!!!!!! You got a $300 discount and lost $30 of it by having to pay the GST, which means you still saved $270 so stop bloody whinging”, but not me.

The there are those that would say “if this bothers you so much then don’t use the voucher”, but not me.

So, “what do you say?” you may well ask.  Good question.  I say eBay needs to include the tax stuff in their T&Cs.  They include a statement about the voucher is only to be used on the item price and not the shipping, so they should change that and say “item price only and not shipping or taxes that may apply”.

And that’s all I have to say about that as I said enough on another thread a short time ago

https://community.ebay.com.au/t5/Buying/Import-GST-charge-calculation-based-on-pre-discount-price-th...

(cupboards, might be worth reading that thread)

[digital*ghost]

---

@letscleanupmycupboards wrote:
Yes however if the discount was $300 paid by eBay why should I be taxed the $30 gst on that? If eBay has paid the amount. Just seems a little wrong.

---

Because you pay GST on the value of the goods when it's an import.

In order for a 10% voucher to provide a $300 discount, the item (plus any postage) would have been at least $3000, in which case eBay wouldn't even apply GST to the item when it's purchased (because it's over $1k).

The seller would receive $3000, mark the value of the goods as $3000, and then when it arrives here, customs would apply all applicable import duties and then charge GST on that total - they don't care how the payment is funded, they only care about how much it's worth or how much was paid in total for it.

Same applies to low value imports. Vouchers are a discount on item prices, not import taxes. (You effectively get a discount on GST on local items, because all prices of all items listed in Australia are GST inclusive).

I would venture to suggest part of the reason eBay has been issuing so many 10% vouchers lately is to actually off-set the GST for members and keep people buying on here. 

[brerrabbit585]

I'd argue that ebay doesn't discount the price, in fact I don't think I've ever seen any reference to them discounting the price. A voucher means they pay part of the price for you, which is a totally different thing. It's like using a gift card in a store - the price is still the same, the money just comes from a different source.

I'd be grateful for the part they pay and wouldn't complain because they didn't pay the tax for me as well. If I wanted to buy something from overseas and a friend said they'd pay $20 towards it, I wouldn't ask them to pay part of the tax as well, nor would I complain about it.

There may already be something in the T&C's about tax but I'm on the wrong ID to check what my current voucher says.

[k1ooo-slr-sales]

@brer

in that other thread I linked to in a previous post there was robust discussion around the wording.  I look at those eBay offers as a rebate, a redemption offer, a % off, a gift, a subsidy . . . . . . . and not as a discount.