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.

[gutterpunkz05]

You pay GST on the ebay fee ( for service), not the sale.  If you have your ABN registered with ebay, they do not collect GST  on the fees you pay to ebay.

Trying to keep it simple.

[sugar249]

Here we go again,  look back at about 200 other posts covering this exact subject.

Take it up with your lawyer,  and they will laugh at you as well.  If Ebay were breaking the law,  someone would have already taken the appropriate action.

If you don't like it go to Gumtree and Facebook market place,  where you wont be paying GST but will be scammed.

Enjoy

[gutterpunkz05]

You list an item for  $100   if you are registered for GST, that price includes GST.  If you are not registered, the listing price does not include  GST, as it is illegal for an unregistered seller to charge GST.

So  you have sold the item  for  $100  and it is up to you to declare the sale and GST to the ATO.

Now ebay collects there sale fee, service fee, whatever you want to call it,but it is the under the service part of  GST.  Now using your  example of  10%  sale fee.    Ebay  collects  $10 as there Fee and is also required to collect GST on this payment, so there fee is  $10  (+ $1  GST)  ebay keeps there $10  and remits the  $1 GST to the ATO.

You declare your sale to the ATO, and Declare receipt  of $10 GST (from your sale price, nothing to do with ebays  $10 Fee.)   You also claim a  $1    expense   for the $1  GST  that you have paid to ebay.

As stated earlier,  register your ABN  with ebay, and they will not collect  GST on your fees.

[gutterpunkz05]

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.

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Don't waste your time and money,  the process is correct, just ask your accountant, if you don't have one, get one.   It will be much cheaper.

[imastawka]

I would hope with over 17K+ feedback as a seller, that you have an accountant to explain it all to you.

[gutterpunkz05]

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

______________________________

Incorrect,    You collect  $100  including,  $10  GST,  The  $10GST is not yours and is not added to the sale price,

So in effect you have sold the item for   $90.

Then of course there is the ebay sale/service fee + GST to also be deducted,  so you net sale is about $79

[worldofannwn]

Please read my post.

eBay is charging their fees on a GST inclusive price. That means, by my example, that they are collecting fees on $110 when I actually only receive $100, $10 of that being collected on behalf of the ATO.

I have my ABN registered eBay and they still collect GST on their fees. I have been unable to get them to fix this, either.

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.

Trying to keep it simple.

[worldofannwn]

I don't think a lawyer will laugh at me if they understand my question, which you clearly don't.

But please, go ahead and point to the 200 other posts that cover eBay charging commission on the GST component of a sale. I covered that in my opening sentence.

If you have nothing useful to contribute, please don't contribute.

[sugar249]

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@worldofannwn wrote:

I don't think a lawyer will laugh at me if they understand my question, which you clearly don't.

Great,  can you let us know what your lawyer says,