eBay overcharges by charging final value fees on GST

[worldofannwn]

I have read many people complain about overcharging here only to be told that it's all correct and legal no matter how unfair it might seem; I would be happy for someone to point out if and how that applies to the following situation because I simply can't see it no matter how I look at it, and there is a dearth of information out there about GST on commissions.

1. Suppose I sell an item for $100 and eBay takes 10% FVF (to keep it simple), then I end up with $90 and eBay with $10 as the variable part.

2. Since both parties are registered for GST, I collect $100 + $10 GST from my customer and eBay collects $10 + $1 GST.

3. The ACCC says display prices must include all applicable taxes and charges, and eBay says listing prices include GST where appropriate.

4. The listing price for a $100 item is therefore $110 GST inclusive. eBay charges 10% FVF on this, and collects $11 GST inclusive.  They then add in any other applicable fees and charge GST on the total, or another $1.10 on top of their fee.

5. This amounts to fees being approximately 1% higher than advertised and is a significant gouge out of profits.

Unsurprisingly, most responses from eBay customer service have disingenuously asked where the error in the calculation is, or exposed their ignorance of the law. The last response promised that the matter was being passed over to a specialist team (specialising in fobbing off customers, no doubt) and assured me there was no need to email again. I don't know about need but I certainly agree there is no point.

A read through the ATO community website indicates that their position is that we need to contact eBay to sort out GST issues; the ACCC seems uninterested in looking into it, presumably considering it's not a matter of public interest.

Before I start down the path of legal action I would be interested to know if anyone else has been affected by this and what was done about it.

[worldofannwn]

No, I don't list an item for $100. The price of my item is $100, but since I am registered for GST I am required to collect $10 and since the ACCC says I must include that in my display price, I list the item for $110.

So I have sold the item for $110 and I declare the sale and the GST to the ATO.

Now eBay collects their fee, and this seems to be where the problem is:

• Not registered for GST:
  • Item sale price: $100
  • Gross: $100
  • eBay fees: $10
  • GST on fees: $1
  • Net: $89
  • Effective fee: 10%

• Registered for GST:
  • Item sale price: $110
  • Gross: $100
  • GST collected: $10
  • eBay fees: $11
  • GST on fees: $1.10
  • GST remitted to the ATO: $8.90
  • Net: $89
  • Effective fee: 11%

I receive the same amount whether I am registered for GST or not, except that being registered I don't pay the GST (only the end-user pays) so the $1 that goes to the ATO in the unregistered case is winding up in eBay's coffers. Overall that extra $1 is increasing my final value fees by 1% above the stated value, so how is that not overcharging?

If this is legal, it shouldn't be. It's not supposed to cost anything to be GST-registered. The only information I can find on the ATO site is examples, although they do show that it's either commission on ex. tax + GST on commission or commission on GST inclusive. eBay is doing both and I can find no precedents or rulings either way.

I already have my ABN registered with eBay and have done since July 2018. They are still charging GST and I have had no success getting them to fix it. They even had the temerity to tell me the ATO hadn't approved it. However even if they were not charging GST, the only difference would be that I remit the full $10 to the ATO. They are still charging fees on the GST component.

I appreciate you taking the time to assist, but I am not convinced that it is correct.

[worldofannwn]

The sale price is $100 and eBay charges $10. With GST, the list price is $110, and eBay collects $11.

[worldofannwn]

I would but I think the answer would be beyond your limited comprehension. Now please stop trolling.

[padi*0409]

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@worldofannwn wrote:

I would but I think the answer would be beyond your limited comprehension. Now please stop trolling.

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Maybe if you had spent the same amount of time talking to eBay about your GST registration problem as you have posting here - there wouldn't be a problem anymore.

[worldofannwn]

I would hope that people would realise that, having discovered an anomaly that eBay refuses to look into, I am seeking advice and opinions of others who may have spotted the same anomaly before taking any legal action, which may include but is not limited to contacting an ombudsman, consulting a lawyer or having an accountant explain it to me.

I also don't see how my level of feedback or the question of having an accountant has any bearing on the matter.

[gutterpunkz05]

I can read your posts but they are full of errors,  Go and PAY an accountant to be told exactly the same.

A $100  domestic sale  does not increase  to  $110.

Ebay  FVF is charged on the TOTAL invoice.  (Quite Clear, legal and approved )

Fees when you sell your item

You pay one final value fee for items you sell on eBay, with no third-party payment processing fees.

The final value fee is calculated as a percentage of the total sale amount per item (item price + postage and handling charges + any applicable taxes), plus a fixed charge per order.

You have agreed to this Fee structure.  So to save yourself  some money,  Copy the above, place it in an envelope with a couple of hundred and slide it under your lawyers door.  Then walk away before the laughing starts.

[gutterpunkz05]

Nonetheless, if eBay were not collecting GST on my fees, under this scenario they are still collecting fees when they shouldn't. As far as I understand, you either charge commission on an ex GST price and then collect GST, or you charge commission on a GST inclusive price. Not both.

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As per my previous.    Ebay charges  one FVF

[worldofannwn]

You have no idea how long I have spent being trying to talk to eBay and being ignored and stonewalled. Maybe if you don't have anything useful to add you could avoid adding it anyway.

[*sons_n_daughters*]

My head hurts. This is going to be one of those 50+ message threads, I can see it a mile off.

[gutterpunkz05]

Yeah  I am out.

They can pay for assistance if still needed.