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?

[foxfrontier]

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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!!

[imastawka]

Good grief!

The seller sold their item for $10.38

The GST paid to the ATO, was $1.04

It can't get any simpler than that.

Why are you complicating it?

The discount doesn't come into it.....the seller got full price

[digital*ghost]

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@foxfrontier wrote:

As I said above, the representative on the phone call was 100% backing my intepretation and no I didn't baboozle him, 

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Maybe you didn't bamboozle him, but since you keep using the word "discount" in this thread, I suspect they didn't get a full understanding of what is actually happening.

Forget the word "discount". The price of the item is not being discounted, what is actually happening is more akin to a rebate that occurs simultaneously. 

GST is payable on the transaction value of a purchase. Because eBay pay a portion of the cost to the seller, the transaction value remains the same as if it was purchased without any eBay codes.

Let me put that in a different context - I purchase an item for $2000 on eBay (in my hypotheticals, I have this kind of disposable income  ). Because this is not a low-value import, eBay aren't collecting GST, but I did use a 10% code and I paid $1800.

Now, the seller doesn't even know a code was used, what they do know is that they received $2000 for their item, the item is valued at $2000, and the customs declaration reflects this.

So, when that package arrives in Australia, the customs value is $2000 and the GST I end up paying will be based on the value of the item, $2000 (plus all other costs, and duties, as GST on higher value items is applied after all other charges are tallied).

The situation on low value imports is exactly the same. 

[imastawka]

Wish I'd said that...................

Wayda minnit,      I did.

[k1ooo-slr-sales]

I think that how you present the facts of the transaction might just influence what the ATO will advise.

For example, and I am being word-tricky here, did you say

- I bought an item on eBay and the total was discounted 5%

OR

- I bought an item on eBay and eBay subsidised my total by 5%

OR

- I bought and item on eBay and used an eBay 5% off redemption code

The item price was not discounted, it was subsidised via an eBay redemption offer.  The item price remained $10.38 + GST.

This screengrab shows a discounted price, which would attract $32.20 GST if it was from overseas with ‘free’ postage i.e. 10% of the item price

I appreciate that you are championing a principle here and not complaining about paying 5c too much.

Also, your computer software won’t reconcile the amounts involved, but when you think of it the way I do then the computer software would not have a problem i.e. “GST is payable on the full price but eBay subsidised my purchase by 5%”.

Additionally, you are not ripping anyone off when you put the full price into your software as you are only getting refunded the GST you paid.  For your case, even if you paid GST on the ‘discounted’ price you would get back all of that GST.

Just put the full item price into the program, get a full refund on GST paid, 

[foxfrontier]

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@countessalmirena wrote:

@foxfrontier,

Now, I agree that this is messy. There may well be room to argue that if an EDP is providing a coupon which discounts the price paid by the consumer, then the total price should be considered in the light of the EDP discounting the listed price. However, it is - I think - not an argument likely to be sustained. But as I'm not posting on behalf of the ATO, this may not represent that ATO's final view and you may instead want to copy this thread and use it as the decorative print upon a roll of toilet paper, just for the sheer fun of doing that.

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Thank you, after 2 pages your post is finally the relevant thing we need to see!

If this "is" upheld, eBay certainly needs to do some work to issue a valid "tax invoice" that cites the tax code on which they are basing the appllied the discount. As above it certainly wouldn't fly for a regular business to issue a tax invoice including only those details as eBay seems to be doing.

[k1ooo-slr-sales]

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@foxfrontier wrote:

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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when an Aussie business offers such a discount they would not charge GST on the non-discount price . . . . . but that is like comparing apples with oranges.

What is at issue here is whether a buyer should pay 10% GST on the amount they pay, OR, 10% of the item price.

Not that this thread doesn’t have its fair share of ‘off-eBay’ scenarios presented to make a point . . . . . . . but when I go to Bunnings and buy a blower-vac for $110 and pay for it by $90 cash and $20 by a Bunnings card I won in a store promotion the GST component is $10 i.e. 1/11th of $110 and not 1/11th of $90.

[joztamps]

You are right when you say the T&C aren't directly relevant to how much GST is relevant..

There was a sale for $10.38.

The ATO and the law of the land don't give a rats who paid the price.

Under the law of the land, the GST is $1.04.

The ATO wants $1.04.

The ATO will get $1.04.

Ebay has to pay $1.04 to the ATO, and it will. That's the law of the land.

Ebay will get the $1.04 from you. That's where the T&C come in.

Incidentally, there is no way Ebay will get to keep the 5c.

They will pay it to the ATO.

Because it's the law of the land.,

[countessalmirena]

❝Receipts issued to customers

When you charge GST on a sale of low value imported goods you must issue a receipt to the customer.

We propose that the receipt must include the following information:

• your name
• your GST registration number, which is either your ATO Reference Number (ARN) or Australian business number (ABN)
• the date of issue
• a description of what you supplied, including the quantity (if applicable) and the price
• the amount of GST payable
• information that identifies whether GST was charged on the goods
  • if you charged GST on all the goods, you can include the GST-inclusive price and state that this price includes GST (alternatively, you can include the GST for each item)
  • if GST was not charged on some of the goods, the receipt must show which goods were subject to GST.

If the total price of the transaction is over A$1,000, you also need to include the name of the customer. This could occur if you sell multiple low value goods and have not applied the exception for multiple goods that total over A$1,000.

You are not required to issue a tax invoice or adjustment note to your customers. If you choose to issue a tax invoice (which you can only do if you have an ABN), this will have all of the required information.

However, you should not charge GST or issue a tax invoice with an amount of GST payable if the sale is made to a customer who is not a consumer. This is because you have obtained their ABN and information or a statement that they are registered for GST).❞

https://www.ato.gov.au/Business/International-tax-for-business/GST-on-low-value-imported-goods/Requi...

[foxfrontier]

I appreciate that you are championing a principle here and not complaining about paying 5c too much.

Also, your computer software won’t reconcile the amounts involved, but when you think of it the way I do then the computer software would not have a problem i.e. “GST is payable on the full price but eBay subsidised my purchase by 5%”.

Additionally, you are not ripping anyone off when you put the full price into your software as you are only getting refunded the GST you paid.  For your case, even if you paid GST on the ‘discounted’ price you would get back all of that GST.

Just put the full item price into the program, get a full refund on GST paid, 

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The problem was the bank feed provides a discounted ex GST figure and a 100% only GST figure. These things don't balance because the GST is not 10% of the discounted price. I know now it can be done with a manual line item added to account for the eBay voucher/discount/subsidization/whatever you want to call it.. and then it will reconcile..

But because eBay doesn't provide a valid tax invoice explaining this, are we just supposed to go on our own assumptions.. well my assumption was the GST should have been calculated, treated and explained like 99.9% of all the other invoices I deal with on a daily basis!

Ok.. so this seems to be the wrong assumption in this case because eBay is a certain kind of EDM platform.. I still stand by the fact that eBay are not issuing valid tax invoices that would allow anyone to instantly understand what is going on, without referencing fine print elsewhere.