GST AND THE ATO

[ivanores2008]

Hi all,

So I have been in contact with the ATO and EBAY today about this GST stuff and my understanding is thats its still very early days and EBAY have no idea whats going on. The ATO did inform me that if you have a business in AUS no matter what it is, doesn't have to be an EBAY business just registered for GST. If you purchase trade equipment or iteams for a business u should be exempt from the GST by the seller i.e EBAY and if you were charged for the GST you can ask for a refund if you can prove you have a GST account (ABN).

The example I got from the ATO is if you are a mechanic and buy a set of sockets from EBAY USA and will use them for trade u shouldn't pay GST. But if you buy a pair of nice fancy going out shoes you will need to pay GST whether its through EBAY or reveres charge Direct to the ATO

 Theres alot of stuff about it on the ATO website and also a video to help understand it.

Taken from the ATO website  

Are there any exceptions?

You won’t charge GST on low value imported goods under the new law if:

• the customer is a business who provides you their Australian business number (ABN) and states that they are GST registered
• you apply an exception because multiple goods with a combined customs value of more than A$1,000 will be shipped together in one consignment to Australia
• GST does not apply to the goods (known as GST-free or input taxed supplies).

Even if you don’t charge GST because of one of these exceptions, you are still required to include certain information on customs documents.

[chameleon54]

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@ivanores2008 wrote:

Hi all,

So I have been in contact with the ATO and EBAY today about this GST stuff and my understanding is thats its still very early days and EBAY have no idea whats going on. The ATO did inform me that if you have a business in AUS no matter what it is, doesn't have to be an EBAY business just registered for GST. If you purchase trade equipment or iteams for a business u should be exempt from the GST by the seller i.e EBAY and if you were charged for the GST you can ask for a refund if you can prove you have a GST account (ABN).

The example I got from the ATO is if you are a mechanic and buy a set of sockets from EBAY USA and will use them for trade u shouldn't pay GST. But if you buy a pair of nice fancy going out shoes you will need to pay GST whether its through EBAY or reveres charge Direct to the ATO

 Theres alot of stuff about it on the ATO website and also a video to help understand it.

Taken from the ATO website  

Are there any exceptions?

You won’t charge GST on low value imported goods under the new law if:

• the customer is a business who provides you their Australian business number (ABN) and states that they are GST registered
• you apply an exception because multiple goods with a combined customs value of more than A$1,000 will be shipped together in one consignment to Australia
• GST does not apply to the goods (known as GST-free or input taxed supplies).

Even if you don’t charge GST because of one of these exceptions, you are still required to include certain information on customs documents.

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Thats Weird. From what I've read ebay will automatically charge GST on all imported items under $1000. No ifs, buts or maybes ( and there is plenty of those ) Even Australian businesses must charge GST on sales to other businesses. Its just that the buyer can then claim the GST back on their BAS. I cant see why it would be any different for an international business under the new scheme.

The international seller ( deemed by the ATO in this case to be ebay  ) charges the GST and remits it to the ATO. The GST registered buyer then claims it back as an input tax credit on their next BAS therefore not actually paying any GST on inputs.

Despite what is written on the ATO,s website, I suspect you will find this is how international ebay purchases for Australian GST registered businesses will work in practice.

[countessalmirena]

Chameleon, a medical publishing company from whom I purchase will not be collecting GST from Australian customers who have an ABN and are registered for GST, on advice from the ATO. That's one instance which shows how GST on imported items is distinct.

One particular UK company from whom I purchase doesn't appear at this stage to be collecting GST, but I'll know more definitely with my next order. The bulk of their sales are within the UK, with the second most prolific buyers being the US.

[chameleon54]

Hi Countess, Is the medical company selling on ebay or through a private website ?

My understanding was that in the case of ebay, ( as per the OP,s initial question ) ebay have been nominated by the ATO as the legal entity responsible for the collection of GST on international purchases on the site and will simply add the GST to all international orders. Ebay itself is being treated by the ATO as the seller of international items, rather than the individual sellers it represents. It will not be the individual companies selling on ebay who have responsibility for the collection or exemption from GST payments.  

One obvious anomaly is that many international sellers will be private people selling less than Aust. $75,000 PA of private goods and would not normally come under Australia's GST collection regime, even if they where located in Australia. My understanding is Australians purchasing from these small international sellers on ebay will still be charged GST on top of the purchase price.

Ebay have not asked for GST registered businesses to forward their ABN's in relation to this issue, although they did go through the ABN lodgement process when GST was first added to commission fees as a result of the Netflix tax. Much of this information could now be out of date and would need to be updated if ebay was going to make exemptions for International purchases of business related goods to Australian businesses.

I,m not aware of ebay announcing any exceptions from the collection of GST on international purchases. As the OP has indicated there is still a lot of confusion surrounding the system and it may take awhile to iron out some of the bugs and anomalies. International purchases of business goods and services by Australian GST registered entities on ebay may be one such anomaly..

[chameleon54]

The above post refers to international ebay purchases under Aust. $1000 in value. Purchases above this figure are treated seperately and already subject to existing GST legislation..

[countessalmirena]

The medical company does not sell on eBay. They're a major US company and don't need eBay as a selling platform. You're right - if they were selling on eBay, it wouldn't matter whether or not they themselves had an annual turnover of less than $75,000 to Australian customers.

It's just one more reason for me to purchase from individual sellers/companies rather than through eBay, particularly when it comes to international items. Sometimes one has no choice, of course...

[9127_04]

I question the right of the Australian Government to colect GST on the sale of a 2ns. hand engine part  bought by a ptivate citizen in Australia from a Private citizen of the USA via. Ebay US. when if it was bought in Australia  there would be no GST.

[davewil1964]

Question all you like. It is legal because the Australian Government has legislated it, and that gives them the right.

The relevant parties to question are the Commissioner for Taxation and the Treasurer of the Commonwealth.

Good luck.