Ask LH: Do Online Stores Have To Quote GST?

Dear Lifehacker, I was recently purchasing something at an Australian online store and noticed the prices listed next to the items did not include the GST. They added the amount of GST at the end when you were paying for it. Do websites based in Australia have to have advertise prices with the GST included, or can they be sneaky and add all the fees at the end? Thanks, Taxing Times

Shopping picture from Shutterstock

Dear TT,

The law in Australia is clear in this respect: prices should always be quoted including GST. As the Australian Competition & Consumer Commission explains:

When you present prices to your customers, you must state the total price of the good or service as a single figure, which is the minimum total cost that is able to be calculated. This should include any tax, duty, fee, levy or other additional charges (e.g. GST or airport tax). If you promote a price that is only part of the total price, the total price must also be displayed at least as prominently as the part price.

If a site is being sneaky and quoting a GST-exclusive price, it may be trying to attract overseas buyers (who won't have to pay GST) or business customers (who do have to pay the GST but can offset those costs against their own GST charges). However, that doesn't make the approach legal.

A better approach for site operators -- both legally and in terms of customer satisfaction -- is to quote the full price and then subtract GST at the checkout if the customer is in a location where GST would not apply. This is the model used by Amazon UK (for VAT, the British equivalent to our GST).

Note that these rules don't just apply to GST. One prominent example: airlines have to quote an accurate minimum price on their sites. They can add in extras such as baggage fees or seat selection charges or credit card fees, but they can't exclude compulsory fees (such as airport taxes) from the initial price quote.

Cheers Lifehacker

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    My understanding is GST is optional for the seller until they reach profit larger than $75k annualy..... ?

      I was also under the same impression, as I recently setup an online store for my sister; I did a bit of research, it's a bit confusing but that's the conclusion I came to also. Can anyone confirm or deny?

        Whether or not that's the case, every business should be including GST in their pricing and just getting reimbursed by the ATO at the end of the financial year. The alternative would be having to track down every customer from the previous 12 months and charge them an extra 10% on what they purchased, or just wear the cost yourself if you happened to go over the threshold.

          Not every business in Australia should be including/quoting GST. Only GST registered business owners should be quoting GST. It is illegal for a non registered business to quote GST.

          Last edited 05/07/13 12:59 pm

        You need an ABN but you do not need to register for GST unless your TURNOVER (not profit) exceeds $75,000 in a financial year.

        If you're getting close, though, you'll definitely want to register. If you exceed the $75,000 you're up for GST over the whole year, not just the period in which you were registered.

        Relevant to this article - your export sales count towards your turnover. I had a small business for a while that did $70k in GST-free export sales and $20k in local sales. I still had to register and charge GST to the local customers.

    Sites like these usually have the gst inclusive price in fine print below the actual price, or atleast have a toggle option to enable/disable GST.

    Is it still illegal if they specifically say gst excluded? Technically the checkout displays gst in the total price before you pay...

    Last edited 05/07/13 9:28 am

      yes - if they are GST registered, they cannot quote a price and say this is "ex GST". It must be the full price inc GST. Similarly if you dine out at a restaurant on a public holiday or sunday and they say "10% surcharge". This is illegal. They need to provide a separate "public holiday or sunday" menu that includes the full/total amount.

      Last edited 05/07/13 1:01 pm

        This is actually no longer the case. Weekend/holiday surcharge is fine as long as it is stated up front.

    Internet shop, retail store, ice cream vendor, electrician... whatever your business - If you are under the $75,000 threshold and haven't registered for GST you won't be quoting it or charging it. You can't charge GST unless you are registered. You must be registered if your business has a turn over of more than $75,000 per financial year. You must however have an ABN (Unless you are operating as a hobbyist). Having an ABN and registering for GST however are two separate things.

    Last edited 05/07/13 12:57 pm

    It's common practice in Australia on the wholesale/trade side of things to always quote ex-GST prices because it's just claimed back or charged on anyway. The rules say that you should always quote prices inclusive of all taxes OR clearly indicate that they are exclusive of GST (you'll see something written as $10 ex or $10 exGST, that's acceptable). If you see just a number, it is implied to be inclusive of GST so they cannot surprise you with an extra 10% at the end. The omission of GST in a quote MUST be clear.
    If you're a small business/sole trader that's earning under whatever the threshold is (I thought it was $50k or so, but I'm seeing a lot of $75k mentions in this post), you still have to supply a proper tax invoice, including your ABN and clearly write at the bottom "GST Included in this invoice: NIL", or something similar. If there's no ABN, the person paying you should actually withhold 50% and send it to the ATO (look up GST withholding). The addition of NIL for GST is to make it clear to the consumer, if it's a business, that they can't claim any GST back on this item in their next IAS because there isn't any.
    GST should only be charged, if the buyer and the seller are both in Australia. If you're selling to someone overseas, it's an export item.
    In general, in Australia we have to be clear and not use deceptive means to do anything. The ACCC is a wonderful thing for stamping that sort of nonsense out. Thank god we don't have the same crappy system as in the USA where the price on the shelf isn't what you pay at the point of sale, and you need to calculate all odd state and national taxes, which aren't a nice neat 10% either for that matter.

    Try selling your goods via an American Ecommerce Provider. No GST, as you are classified as an exporter!

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