Import GST charge calculation based on pre-discount price, this doesn't seem right?

[foxfrontier]

Ebay seems to be charging GST based on the "pre-discounted price", for example I purchased an item..

Item Price: $10.38

I used a 5% discount voucher (coupon code), so effectviely $9.86 pre-tax

Credit card charges

1) 9.86 (paid to seller)

2) 1.04 (paid to ebay for "GST")

Total $10.90 charges

If I were to buy a 10.38 +10% GST item in any Australian store it would cost = $11.42

Then if I get a 5% discount it would = $10.85

Not $10.90.. so there is currently a 5 cent error in ebay's favour.

I'm not worried about my 5c of course, but multiply that by the whole of Australia and ebay is skimming a tidy profit there!!

For me the reason this is annoying though, is that I buy items for my business and because the tax is not adding up to 10%, my accounting package requires me to jump through hoops to reconcile it.

Fair enough it it were "correct", but I don't think ebay is correct in this calculation?

[gutterpunkz05]

That is why there are 2 seperate transactions.  1 for the purchase and 1 for the  GST,  the seller has absolutely nothing to do with the GST, they do not collect or remit it,  as it is only applicable if the item sells to someone in Australia, which is why it is processed differently to Australian purchases.  If the item is sold to Australia  ebay add the GST component to the existing price, they are responsible for collecting and remitting this amount (they are not pocketing any extra for themselves).  That is also why the difference of 5 cents that you come up with when comparing GST in OZ prices to GST in OS prices.  If an item is listed in OZ for $10.38  then the Pre GST price is $9.44  +  94c GST  so when you try to compare that $10.38 purchase to a OS purchase you have to realize, that given GST on overseas items is added to the purchase price, you should be looking at a comparison price  $of 9.44  not  $10.38.

By the way, theOZ   GST component on $10.00  is approx  91c    not  $1.00

[kopenhagen5]

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@foxfrontier wrote:

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@gutterpunkz05 wrote:

I can allready tell you what the answer will be.  Again read the T&C  if you wish to use special offers

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hehe I don't care what the final answer is, I just want a "clear" answer.. if you think T&C's mean anthing compared to the laws of the country they are operating in, then I don't know what to say.

An Australian busines absolutely cannot issue a tax invoice stating:

Services: $10.00

Discount: $5.00

GST: $1.00             <- this is the problem

Total: $6.00

There may be some special treatment for international marketplaces that states otherwise.. and I welcome having that clarified and you should too!!

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Completely different -  THE SELLER DID NOT DISCOUNT

eBay said - Here let me give you 52 cents towards your order.

[foxfrontier]

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Completely different -  THE SELLER DID NOT DISCOUNT

eBay said - Here let me give you 52 cents towards your order.

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Yes by now we all understand the maths and what is going on here, the point is that AFAIK at no point is eBay actually telling you in a clear and "valid Australian tax invoice/receipt" way (normally a legal requirement, but maybe not for EDMs) that "they" have "put in" the 52c and how it was contributed. If they did that, then we wouldn't be here having this discussion today..

And that's "IF" this discount/voucher applied "after" GST method that eBay are using, actually holds up with the ATO.. after this discussion I think it probably will, but I think they have some explaining to do too.

[k1ooo-slr-sales]

I think I have a solution that will work.

If the item had been a $100 item the 5% redemption coupon would have been for $5.

The GST that would have been ‘overcharged’ would have been 50c.

Now, how much value does any member put on their time?

I mean, time spent starting a thread, time spent replying to posts, time spent on phone calls to the ATO, time spent arguing with others, time spent on phone calls to eBay, time spent replying to posts!!!!!!!

If it caused me so much angst because it was difficult getting my accounting software to reconcile the ‘principled’ amount . . . . . . . . THEN I WOULD NOT USE THE REDEMPTION COUPON, even on a $100 item!

If it takes an hour to do all the ‘time’ things I have listed then you would have to be spending quite some $$$ on the items to make using the coupon worthwhile.

I suppose if you can get a ruling in writing from the ATO then the fight with eBay over 5c will have been worthwhile.

[foxfrontier]

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@k1ooo-slr-sales wrote:

If it takes an hour to do all the ‘time’ things I have listed then you would have to be spending quite some $$$ on the items to make using the coupon worthwhile.

I suppose if you can get a ruling in writing from the ATO then the fight with eBay over 5c will have been worthwhile.

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lol you never really "got it" from the beginning mate and you wouldn't understand my motives either. 😜

[lyndal1838]

If you don't consider the ebay paperwork good enough for your purposes why don't you use the paypal receipt.

Mine show the amount of the sale, the postage (if applicable) the discount applied and the full amount paid to the seller.

Under that is a second receipt showing the amount paid to the seller and the amount paid to the ebay account for the GST.which is 10% of the total amount paid to the seller.

Everything you need for the ATO.

[gutterpunkz05]

Now just to throw a curve ball in there.  I think you will find the T&Cs  also contain a limit as to the max value of any discount.

Now lets see ATO overrule ebays T&Cs, Not going to happen.

[digital*ghost]

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@foxfrontier wrote:

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Completely different -  THE SELLER DID NOT DISCOUNT

eBay said - Here let me give you 52 cents towards your order.

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Yes by now we all understand the maths and what is going on here, the point is that AFAIK at no point is eBay actually telling you in a clear and "valid Australian tax invoice/receipt" way (normally a legal requirement, but maybe not for EDMs) that "they" have "put in" the 52c and how it was contributed. If they did that, then we wouldn't be here having this discussion today..

And that's "IF" this discount/voucher applied "after" GST method that eBay are using, actually holds up with the ATO.. after this discussion I think it probably will, but I think they have some explaining to do too.

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eBay never really considered members making business purchases, or - if they did - they certainly didn't account for it.

Right now, the system is cobbled together with various other functions that were designed with something else in mind, or perhaps more specifically, without the GST on imports in mind (that system is less than 6 months old, the way their site vouchers work, and how they are applied, and what they show on invoices etc, is a few years old, and devised well before eBay had to work with GST).

Some of it is their own fault - by advertising codes as discounts in the first place, and setting things up so that buyer's receipts only show the product price after the 'discount'.

I have a wholesaler overseas who is obligated to collect GST on <$1k purchases (I have supplied them with my ABN, though, so they don't collect it on any of my purchases, but that's a little by the by). Every time I spend above a certain amount with them, I earn "vouchers" that can be redeemed against future orders above a certain value. During sales, the way they do it is a bit like this:

Item $300 $250

Redemption voucher: $10

Paid: $240

Goods value: $250 (i.e. GST would be payable on the discounted price, before my redemption code is applied, and if the order is above $1k, the pre-voucher value is the declared value). 

But, they are a single entity and don't rely on an old system that was put in place when they still owned the primary payment processor that's used on the site, IYKWIM. (i.e. that is the situation ebay is in - they need to find a way to reconcile old systems with the new systems, plsu introduce more new systems that recognise Australian businesses sometimes use eBay to purchase low value goods from overseas. 

My guess... It will be more viable when the switch from PayPal to Adyen occurs. 

[*tippy*toes*]

I think it's you that doesn't get it. You buy an item for $100. GST is $10. You buy an item for $100 and use a voucher for 10%. You pay $90 out of your pocket. You buy an item for $100 and have a voucher for 90% off. You pay $10. The GST is still $10 in all scenarios BECAUSE THE ITEM COST $100.

The voucher is irrelevant. It's all about the amount that was showing when you hit buy it now, or win an auction.

It really isn't that hard. I'm guessing that the ATO person agreed with you because in my scenario, you told them you paid $90 (or $10), not the listed price of $100. 

[foxfrontier]

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@gutterpunkz05 wrote:

Now lets see ATO overrule ebays T&Cs, Not going to happen.

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Wow some scarey comments raised in this thread.. seriously.. in this day and age multi-national companies can't just waltz in, set up shop and write their own rules that override the law of the land, if that were the case, do you really think eBay would be collecting GST in the first place!?

If you know anything about GST in Australia then you will know I've raised a pretty valid point about how eBay are communicating with the buyer. If the accountants & lawyers have made a slip up in the wording (doubtful, but, it's a very recent piece of legislation) then it could be costly!

For example, they clearly market these discounts as "percent off discounts" in a lot of places, including the T&C's for the offers themselves, go and check them out! - the fact eBay pay the seller the full amount is AFAIK never disclosed to the buyer, or hidden away in the fine print in the site T&C's, it's not on the tax invoice, or even the offer T&C's pages, where it should be as well.

Think about it, there is a sale with a seller, gst collected by ebay, and ebay chipping in part of the cost though a "voucher"... but hangon, if eBay isn't the seller, then why are they giving us a voucher/credit/whatever, have we actually conducted a transaction with eBay, the seller, PayPal, who do we have the relationship with? I think it's far from clear cut, whether eBay can just call this a voucher considering we aren't even transacting with them (rember the money goes direct to the seller).. but if they can, then maybe eBay can even claim an input tax credit on the voucher (discount) itself, just as a business would with a refund.

I do get it guys, it's just a thought experiment and it doesn't need to be re-explained by another "non-Australian expert" keyboard warrior.. we are transacting with eBay and it's being passed through to the seller less a voucher, but little (umm "legal") details like this really do matter and need to be included in an official document from eBay, say a "tax invoice". Sorry but ignorance or "anchient systems" won't cut it as an excuse. Yes I know it's probably all above board and they most likely have an ironclad ruling in the vault from the ATO.. but I would'nt write anything off until the ATO actually take a look into this case.. of course I'll keep you posted. 🙂