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Isn't GST compulsory?

Wednesday, 01 July, 2009

I have opened an account with ***** computer hardware company. I found that their prices are very low and much lower than the shops.

I bought a few computers and other parts for friends but I had an argument when I went there to collect the delivery. They said I had to pay GST on top of the price I had the bank cheque for.

My father says it is illegal to advertise products without the GST added in so they must give them to me at the original price.

Can you help me.

Mehet P, , Australia


You're not the first person to fall into that situation Mehet. The company you mentioned is a wholesaler. That is, the company only sells to other companies that then sell to end users.

While your father is correct about retail sales, that's the common way that wholesalers work in Australia. The way the GST (Good and Services Tax) system works, the GST is levied at the point of final sale, so as a retailer you would claim that wholesale GST back against the GST you collect when selling things.

So you'll have to pay the GST. (And be grateful they're selling to you at all.)

Paul Zucker


Reader solutions



Tony BrownPosted: 07/07/2009

re: Isn't GST compulsory?
Yes Paul :) Beer is one of my main food groups :) In fact it's at the top of my food chain and on these cold wintry nights there's nothing like a pint of Coopers Stout just before bed to settle you down for a good night's sleep.
I also have the odd fish'n chips, Chiko Roll or hamburger from my local deli now and then :)This provides me with a well-rounded diet which enables me to chat to you really great people at PCUser mag. Keep up the good work :)
Tony BrownPosted: 06/07/2009

re: Isn't GST compulsory?
Actually and correct me if I'm wrong here but I 've found over the years that if I just stick to the necessities of life e.g. beer, ciggies,the odd bit of food now and then my GST bill is usually pretty small and is something I can live with.I'm sure I could cut it down even more if I cut down those three things but silly me I don't want to :) Cyas

(So beer isn't food? -PZ)

Pranesh PALPosted: 04/07/2009

re: Isn't GST compulsory?
See http://www.unisa.edu.au/Fin/Tax/gst/faqsGST.asp#Do all businesses charge

Receiving Quotes and the GST

The general rule is that where a quote is supplied with no mention of the GST, it is reasonable to expect that the price is GST inclusive. This is the view supported by law.

THE TRADE PRACTICES ACT 1974 AND UNLAWFUL PRICING

The TPA requires that:

Consumers are not misled or deceived about the total price that must be paid to receive the goods, services or packages advertised.

When a price representation is made, the total quantifiable price is clear to the consumer.

Advertising, displaying or listing separate components of price without also giving the total price payable may constitute a breach of the TPA if presenting the price in such a way is ambiguous or the total price cannot be readily calculated.

Thus if you received a quotation with no mention of GST and you would normally expect to pay GST it seems reasonable to expect that GST is included in the price. Otherwise the quotation would fail the above.

MikePPosted: 02/07/2009

re: Isn't GST compulsory?
what? - GST (Good and Services Tax) system? -I learn something every day! I always thought GST meant Grab, Snatch and Take!
Richard DayPosted: 30/06/2009

re: Isn't GST compulsory?
1. Check the quote that you received.
2. Call the ATO to find out to see if what was done was illegal. It doesn't matter that they were a wholesaler, the end price should be GST inclusive to each party along the line AND THEY KNOW THAT TOO. If you have an ABN you will be able to claim a tax credit when you lodge your next BAS. If you find that this is illegal DOB THEM IN TO THE TAX OFFICE AND FOLLOW IT UP. (I had fallen for this too. I had a new radio installed in my car a few months after GST came in and when I went to pay for it the guy said that GST had to be paid on top of the amount quoted. I paid it but never went back.)

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