Do you really think postage is 'FREE' to your business, no matter what the cost? That just doesn't make any sense.
Let's keep it simple for those playing along at home:
You, as an eBay business, purchase an item for $100. You sell it for $200 with local pickup (ie no postage costs). As a business you have made $100 profit. Tax liability is 30% of the $100, leaving you with $70 left in your bank account.
If you sell the same item to someone else who has it delivered, you offer 'free' postage (but the actual postage cost to your business is $20) then you have made a profit of $80. Tax liability is 30% of $80, leaving you with $56 left in your bank account.
As a business, would you prefer $70 or $56 in your bank account, before other expenses?
It doesn't matter where in the equation you show the expenditure for postage, it still reduces the profit on each item.
If we include GST, profit will be reduced by 1/11th in both scenarios. Also, as a business, other expenses such as rent, electricity, staff costs etc will further reduce reduce the amount of tax you need to pay.
Technically the 30% tax rate is applied to your business profits after all expenses are applied, but you will still have $14 extra left in your company bank account after the financial year if you don't have to pay for postage on the above scenario.
Obviously if the buyer pays postage then none of this matters (regardless if you are a business seller or private individual), but this is not the point of this thread. It is whether a business is getting 'FREE' postage.
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