eBay, GST & Discount Vouchers

[digital*ghost]

Just when you thought there couldn't be any more threads re: ebay and GST....  I promise it's not about OS purchases, although realising that eBay pays GST on local purchases via discount vouchers but not on OS purchases is what made these thoughts invade my head - also, I registered for GST last month, so I have a ton of new things I have to consider that I never did before. 

Ok, so, enough pre-amble... As a GST registered seller, I now have to provide my buyers with a tax invoice. That's fine and simple, but, what about when they use a discount voucher, yet I receive the full amount of my asking price?

In those cases, the buyer would pay up to 20% less, and unlike with overseas purchases, where the GST is calculated separately and discount vouchers don't get applied to the GST component, the shortfall that eBay pays to make up the full amount means they are also paying 20% of the GST, because it's included in my prices. Is it even legal for me to provide a tax invoice for the full value, when the buyer paid less, despite me actually receiving more? 

From the collection perspective, that's not an issue, but from an invoicing perspective surely it has the potential to be incorrect and therefore cause issues, even if but maybe only for the buyer if they are also GST registered (which I know some of my regulars are)? For the sake of ease, if an order is $110 in total, and I've collected $10 GST, then technically eBay has paid $2 GST to me (unless the buyer can tally it differently, and say they paid $88 in total, which includes $10 GST? But then won't that imply I'm over-charging GST? Ugh... ). 

I have a tendency to overthink these things, and maybe the answer is simple, or it's not even a problem, but it's one of those small, sudden thoughts that I know it will bug me until I know what the kocher way to approach the situation is, if there is one, as buyer and seller, so if anyone has any opinions or insight on this scenario, I'll welcome it.

ETA: I fogot to mention that there is no way for me to know if a buyer has used a discount code or voucher anyway. Which makes the whole situation worse! 

[djavusydney]

In your end you need to record sales of $110 with $10 payable in activity statement. Ebayon the other hand will record the $22 as their marketing expense. I don't think they will be eligible to get $2 GST credit though as they don't get tax invoice from anyone.

Anyway there is a way to know if buyer uses discount coupon. On your order list do a pretend cancellation, then on next page it will be the confirmation page detailing buyer payment including voucher used.

[digital*ghost]

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@djavusydney wrote:


Anyway there is a way to know if buyer uses discount coupon. On your order list do a pretend cancellation, then on next page it will be the confirmation page detailing buyer payment including voucher used.

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It also won't let you do a partial refund in PayPal if they've used a voucher (unless things have changed recently), but unfortunately it's just not practical for me to individually test every order.

I'm more just wondering if sending a tax invoice for $110 (inc $10 GST) to a buyer is ok, when they actually only paid $88.

I mean, on the one hand, if they got $20 as a birthday gift, and they spend it on an eBay purchase, it could be argued that technically someone else has paid for $20 of their purchase but it's not like I'd know or be obliged to send the gifter a separate tax invoice (the money is the buyer's once gifted, anyway), but can this scenario be considered in the same way, as the transaction itself on eBay is me essentially receiving money from two different parties.  

[djavusydney]

I just tell you how to see evoucher but not necessarily you can issue invoice to discounted amount. As again, you receive full amount - you need to issue full amount tax invoice. Yes eBay pays you the difference, thus why you need to record sales amount in full.

[lyndal1838 · Accepted solution]

Digi you are only responsible for invoicing the buyer for your item cost plus the GST.

How the buyer funds that amount is not your worry.

As long as you receive the invoiced amount and account for the GST on your BAS your responsibility has ended.

Technically you have no way of knowing how the buyer has funded his payment....even the ATO does not expect you to be clairvoyant.

[digital*ghost]

Thanks lyndal - I figured I was probably worrying over nothing 🙂  it was mostly because they'd have an invoice (from me) and a receipt (from PayPal) that says two different things, whereas with a more traditional discount, the two amounts would match. 

[lyndal1838]

Digi, my paypal invoices and receipts show the total amount sent to the seller......but it is made up of an amount from me and an amount paid by voucher.   The fact that the voucher is from a 3rd party is neither here nor there to the ATO.

The buyer paid you the amount that you have asked for and it tallies with the amount you declare on your BAS.   Your responsibility has ended!!!!!

[countessalmirena · Accepted solution]

Unfortunately working out your responsibilities with GST isn't something for which you're allowed to charge, although it would be nice, woulndn't it?

                                              INVOICE № BRX2-01433341842

                                                  Date: 17 September 2018

                              Tax Invoice / Receipt

Invoice to: Australian Taxation Office

Tax invoice for fees payable for working out kinks and complications in GST compliance for personal situation

Location: Up the wall

Item:                                         Quoted fee          Payable fee

GST collection & issuing of tax invoices

      where third party pays GST portion      $1,201.12           $1,301.12

Questioning of Experienced Source             $   90.00           $   90.00

Coffee to keep weary brain awake              $  205.00           $  585.00

Searching ATO website                         $  100.95           $  100.95

Thinking about tax                            $  982.22           $  982.22

General expenses                              $2,150.00           $2,150.00

                                                      SUBTOTAL    $5,209.29

                                                           GST    $  520.93

                                                         TOTAL    $5,730.22

Please remit within 4.55 + GST days.

[stinhambo]

Not sure if this is the latest thread on this but this is incorrect -

Let's say the full amount (no voucher) is $200 but with a 20% off voucher is $180. If I pay the amount with the 20% off voucher applied, I expect to be invoiced as such.

It is the reseller (eBay store) that gets the rebate and must account for that, not the purchaser. 

This seems to be a massive flaw in the system for companies purchasing from eBay stores.

[lyndal1838]

Not correct.   The invoice is issued before the buyer pays and the seller has no way of knowing that the buyer will be using a discount voucher.

The seller receives the full amount of the invoiced cost and again has no way of knowing how the buyer funded that amount.

It is the seller's obligtion to remit to the ATO the full amount of the GST on the invoice, no matter how the buyer funded the payment.