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.

[imastawka]

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@worldofannwn wrote:

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.

If there was an anomaly, surely a good accountant would have picked up on it.

And your level of feedback assumes that you use an accountant.  You'd be silly not to, with that number of sales.

You were 'seeking opinions' and that is mine.

You seem to be determined to ignore any advice given here, so I'm also out.

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[sugar249]

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You seem to be determined to ignore any advice given here, so I'm also out.

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They are happy to take any advice or opinion,  as long as it agree's with them, if it doesn't you are a troll.  LOL

 In all seriousness, if there was an issue, the ATO, a good tax lawyer or even a half dodgy accountant would have prosecuted this years ago.

[domino-710]

Which is why I didn't even ' buy ' in. LOLOL

[worldofannwn]

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@gutterpunkz05 wrote:

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.

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 I never said it did. But if I want  $100 for an item, I need to list it for $110.

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

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I am aware it is charged on the total invoice. But there is a total invoice ex tax and a total invoice including GST. If the fees are charged on the inclusive total then as a percentage of what you get for the item they are higher for a GST-registered seller. I'm surprised the ATO allows that, and the ACCC says if there are multiple prices, you must offer your service at the lowest one. Not to mention how unethical it is to take a percentage of other people's money as part of the commission, no matter how legal it may be.

I'm not sure you've fully understood my problem and I may not have explained it well enough, perhaps I'm looking at it from the wrong angle. I may be barking up the wrong tree, but it's the right forest, and you've given me more clues in a day than eBay has in a couple of years. 

Thanks for the help, I don't know why eBay couldn't just tell me the same things you just did.

[worldofannwn]

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@gutterpunkz05 wrote:

 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

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Not sure what you mean.

The examples for GST on commission that I read state that you can charge one way or the other, it works out to the same amount. If eBay is charging GST on the invoice total then (IMHO) they should be charging FVF on the ex GST amount according to that.

There's still only one FVF

[gutterpunkz05]

Still wrong and you can't even figure out where.  BYE

[davewil1964]

I don't know why eBay couldn't just tell me the same things you just did

They did. in the bit GP copied and pasted.

[kh-jean]

Hi everyone,

This discussion has gotten a bit heated. Please remember that, while it is fine to disagree with others, discussion should always remain friendly and respectful as required by the Community Guidelines.

Thank you for your cooperation.

[petersbargainshop]

GST may not be applicable to your eBay fees.  Taken from the selling fees information

If your registered address is in Australia, GST of 10% is payable on your eBay fees. Unless you provided eBay with your ABN and registered for tax exempt status, we'll add GST to your eBay fees.

If you select the link it will tell you if you are registered as GST exempt.

If your GROSS revenue from business activities (not profit) is greater than $75,000 per annum then you need to register for GST.  If your gross sales on eBay (exclusive of fees) exceed $75,000 and don't register you can be deemed as being a seller for GST purposes and the GST component of all sales from the first financial year when you exceeded the threshold will become payable.

Can I also say that as a former ATO and ACCC employee there are a number of false assumptions in your worked example.  I suggest that you seek professional advice if you're not completely familiar with the application of the tax laws.