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?

[k1ooo-slr-sales]

there was a thread started when the GST was introduced on low value imports.  On that thread, countess posted the following:

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@countessalmirena wrote:

Information on GST for low value imported goods, contained in eBay's updated User Agreement:

17. GST on low value imports

From 1 July 2018, Australian Goods and Services Tax (GST) applies to the sale of low value goods (i.e. goods valued at AU $1,000 or less) imported by consumers into Australia.

eBay is considered an Electronic Distribution Platform (EDP) under the relevant legislation and therefore responsible for collecting the GST on low value imports and paying it to the Australian Government. This means that from 1 July 2018, eBay will add GST at checkout on all imports with an order value less than AU $1,000 and remit the GST to the Australian Taxation Office (ATO). We will not collect GST on orders over AU $1,000.

If you are a seller with products located outside Australia, you don't have to collect GST nor remit anything to the ATO in regards to your eBay sales. Any GST that applies for low value goods bought on eBay and imported into Australia is added to the order price and collected by eBay from buyers, then remitted directly to the ATO. You still receive payment for your orders as normal However, you acknowledge and agree that 1) your prices may appear 10% higher to buyers than before if their delivery address is in Australia; and 2) we won't report GST collected to you, although we will indicate on the order details page if GST was collected by eBay.

As a seller, you must not misrepresent the location of your items on eBay and you must comply with eBay's Selling practices policy. Sellers found in violation of this policy may be subject to listing removal, warnings and suspension by eBay.

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). If there is any dispute as to the GST you have paid on an order, you should contact eBay. If you receive a full or partial refund for your purchase, you will also receive a refund for the proportionate amount of GST.

Our Tax policy contains more detail about when we charge GST on eBay. If you have any questions or require more information, please contact the Australian Taxation Office or seek independent tax advice.

In particular, the penultimate paragraph above should be helpful for eBay buyers wondering about how GST is managed with regard to refunds.

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I’m not saying you are wrong about the amount charged, just that I disagree with the way you are thinking about this and I will be interested in how all this pans out for you . . . . . . so please do come back when you have a definitive answer from eBay and/or the ATO.

For now, I suppose we just have to agree to disagree.

In the section of the User Agreement quoted above it says “you will be charged 10% on top of the seller’s item price”

[digital*ghost]

I am a business seller, registered for GST.

The seller gets X, the declared value is also X, and GST is payable on X. ebay discounts don't incude GST on international items because they are not listed as GST inclusive.

It really is as simple as that.

[k1ooo-slr-sales]

here is a link to the thread that I referenced:

https://community.ebay.com.au/t5/Buying/GST-when-buying-overseas-a-few-FACTS/m-p/2176059#M93189

[foxfrontier]

It will come down to how the ATO rule on the fine print.. either eBay sold me something for 10.90 GST inclusive, or the seller sold me something for 9.86 ex and eBay should have only collected 0.99 GST. Or eBay is right to charge GST on the full non-discount price because "they" still pay the seller the full amount.. either way it will be interesting to hear what the ATO thinks..

I assume eBay has had plenty of accountants sign off on this process (how could they not) but we'll see, it wouldn't be the first time implementation mistakes have been made in complex multi-national software!

At best, I think the information they are providing (in text form in multiple places) to the Australian buyer, is inadequate/inaccurate.

[k1ooo-slr-sales]

It will come down to how the ATO rule on the fine print.. either

A) eBay sold me something for 10.90 GST inclusive, or

B) the seller sold me something for 9.86 ex and eBay should have only collected 0.99 GST. Or

C) eBay is right to charge GST on the full non-discount price because "they" still pay the seller the full amount

I’m going with C . . . . . . . yep . . . . . . . lock it in Eddie . . . . . . . . . C

Spoiler

either that, or NOVEMBER

[kopenhagen5]

Once again you are incorrect - 

The SELLER (not eBay) sold you something for 11.42 GST inclusive. End of story.

And I am guessing eBay n ATO have misunderstood what you have said as you may have said eBay sold you something.

[foxfrontier]

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I’m not saying you are wrong about the amount charged, just that I disagree with the way you are thinking about this and I will be interested in how all this pans out for you . . . . . . so please do come back when you have a definitive answer from eBay and/or the ATO.

For now, I suppose we just have to agree to disagree.

In the section of the User Agreement quoted above it says “you will be charged 10% on top of the seller’s item price”

In particular, the penultimate paragraph above should be helpful for eBay buyers wondering about how GST is managed with regard to refunds.

---

The user agreement can state whatever it likes, it is the Australian tax code that is the ultimate decider on what the "sellers item price" is defined as. Either way it's going to be interesting and I'll update as soon as the ATO completes their investigation.

As I said above, the representative on the phone call was 100% backing my intepretation and no I didn't baboozle him, we discussed it in stupidly simple terms, eg. a $10 item would attract a $1 GST import fee, but if that item was discounted 50% the total price should be $5.50, not $6.00. If the total price was $6 (due to user agreement allowing them to charge the $1) then the buyers tax invoice should still show 10% of $6 = 0.55 GST was collected - as it would in ANY store or business in Australia.

If there exists some sort of international marketplace ruling because eBay is still paying the seller the discounted amount, so be it, but they certainly aren't issuing the buyer a valid tax invoice stating "that".. at least that I am aware of - maybe you can request one, or find it within your account somewhere, but they aren't emailing one as part of the standard email notifications when you buy something.

[gutterpunkz05]

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

[imastawka]

Reading the OP, I see

Item price $1.38

GST paid $1.04

Seems on the up and up to me.

Too many figures and percentages thrown in to spoil the pot IMO

[countessalmirena]

@foxfrontier,

I'm not surprised that this point (and other details and fine points) about the GST on low value imported goods is generating some differing views and even some confusion. Part of the confusion arises from the indisputable fact that eBay are being defined in one way for the purposes of the legislation, and in another way (by eBay itself) as simply the advertising/selling platform, not the seller.

From the legislation (Treasury Laws Amendment (GST Low Value Goods) Act 2017):

❝An entity may be treated as the supplier of an offshore supply of low value goods, if the entity is the operator of an electronic distribution platform through which the supply is made, or the entity is a redeliverer of the goods.

The result is that the operator or redeliverer, instead of the supplier, counts the supplies towards its GST turnover and pays GST on the supplies.❞

eBay - while wearing that hat (operator of an EDP) - has to collect the 10% GST on the total value of the goods plus shipment. (Different situation when the GSP is involved because Pitney Bowes are the redeliverer... but that's for another time and place.)

eBay have another part to play as simply the platform on which the item is advertised and purchased. In that rôle, they sometimes offer enticements voucher or coupon codes to buyers, codes which can be applied (if the buyer chooses to use the code) to whatever purchases fall under the terms and conditions of that particular voucher/coupon code. I think I'm right in saying that as a general rule, these coupons don't apply to any postage component of the purchase... and that if there's a minimum purchase amount, it's exclusive of any postage component.

I think digital*ghost's point about these coupon codes not being a traditional discount is a valid one. It's clear that this is not a seller's discount. That is, the seller himself/herself hasn't discounted the item. If the seller had, then obviously you'd be paying GST upon the discounted item price plus postage, not upon the pre-discounted item price plus postage.

eBay does not have the legal right to discount the seller's price (although you'd be forgiven for thinking they did, if you read any of the threads on the selling forum here about some recent eBay behaviour, which I won't go into at this moment). What they do is say to the buyer, "If you want to buy things on this platform which meet these terms & conditions, we are happy to pay a portion of the total price of the item for you." They are - as described in kopenhagen's post where he likens it to the buddies at the bar paying part of the bill - chipping in to pay part of the total price.

In that case, the total price (customs value) doesn't change. It's irrelevant in terms of the GST you owe whether you pay for the total amount, or whether someone offers to pay part of it on your behalf. The GST payable is still 10% of the seller's total (listed) price plus the postage/shipping cost.

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.