How is Ebay calculating the GST on purchases sent to Australia?

[camicat1]

I have noticed    that the amount being added to purchases   for "import charges" is  far more than the 10% GST now levied on items sold into Australia 

Here are  just two  examples I encountered tonight. In both cases the "GST"   or "Import Charges" is far more than the    legal rate of 10%. How is this being calculated and who is getting the additional money?

Item (1) US $42.99 Postage US $23.50 GST US $6.65

Order total US $73.14

Items (5) US $112.75 Postage US $31.16 Import charges US $19.67

Order total US $163.58

[countessalmirena]

There are several threads on this board which have mentioned this very issue.

As best we can determine at this point, it seems that Pitney Bowes are charging an additional amount, presumably for admin associated with collecting the GST. This isn't legal in Australia, but with PB being outside Australia, it's anyone's guess as to how this will play out with the ATO.

[lyndal1838]

Your first example is the way it should be....10% of the item cost plus postage, collected by ebay.

The second example looks to be using the GSP.....the GST is included in the Import charges and collected by Pitney Bowes.  It is illegal not to show the GST as a separate item on the invoice but Pitney Bowes is getting away with it.   They are also charging a fee for collecting the GSP which is also illegal in Australia.

[camicat1]

The Sydney Morning herald is  doing  a piece on the  big overseas sellers who are   still resisting collecting the GST. I have sent this information to them as showing the other side of the problem where some are clearly profiteering.  Almost every  state in the USA collects some form of tax, with different rates in different states and this does not seem to attract additional charges for administration.

[brerrabbit585]

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@camicat1 wrote:

The Sydney Morning herald is  doing  a piece on the  big overseas sellers who are   still resisting collecting the GST. I have sent this information to them as showing the other side of the problem where some are clearly profiteering.  Almost every  state in the USA collects some form of tax, with different rates in different states and this does not seem to attract additional charges for administration.

---

US citizens are obliged to pay sales tax in their state and can't charge to collect it, but that's a completely different situation to overseas sellers collecting tax on behalf of the Australian govt.  Nobody knows what the legalities are when it comes to overseas businesses collecting tax on Australia's behalf and I'd say there are still a few things to be ironed out.

[camicat1]

Others have this sorted easily. Just calculate 10% and remit to ebay Australia, as the seller in China has done with this purchase

Transaction ID: 7JM4xxxxxx
Date: 10 July 2018
Payment status: COMPLETED

Description Unit price  Quantity  Amount

20X/set Stainless Steel Clothes Pegs Hanging Pins Clips Laundry Windproof.AU

273102130688 

$4.01 AUD

2

$8.02 AUD

    Shipping and handling $0.00 AUD     Total
$8.02 AUD     Payment 
$8.02 AUD

Related payment 

Transaction ID: 7W0xxxxx

Related to purchase transaction ID: 7JM4xxxxx

Payment recipient: eBay Australia & New Zealand Pty Limited

A separate payment has been sent to cover charges related to your purchase. 

    Total  $0.80 AUD       Payment sent to: gst_au@ebay.com

[countessalmirena]

@camicat1,

The seller hasn't "sorted this"; eBay collects all GST on overseas items listed on eBay, sold to customers in Australia, where the total including shipping is less than $1,000. (Or rather, "all" except for items being sent via the GSP, it seems. In those cases, it's PB collecting the GST and charging an "import fee" that includes the GST plus admin costs, apparently.)

eBay themselves, where they are collecting the GST, are "eating" the administrative costs of this, which are considerable.

The Chinese seller in your example has done nothing in connection with the GST, and will not be remitting any funds to the ATO.

[brerrabbit585]

The thought of the Chinese collecting money for the Aussie govt and then sending it to ebay is the funniest thing I've heard in ages!!!

[camicat1]

It struck me as hilarious particularly as from what you are saying  ebay cannot  manage a similar transaction  when dealing with USA sellers. Something screwy about all this. Anyone who sells on eBay has to abide by eBay’s rules but they seem to apply them in different ways for different countries. There is no need to differentiate although this is what is happening. The Chinese seller simply processes the transaction and eBay does the rest. 

[brerrabbit585]

It's Pitney Bowes that's charging more than the GST, not ebay. If you buy from a US seller who doesn't send through the GSP you'll just get charged the GST and nothing more, same as when you bought from a Chinese seller on ebay. PB seem to be charging to collect the GST, or if they aren't actually collecting it (I can't see how they would be) they're charging brokerage fees to fill in the customs certificate.