Australian GST (goods and services tax)

Hi, first off I gotta say even though frustrating I am having a ball with zencart.

Now the important thing. I have setup all my taxes. So Far I have under admin Location/Taxes Zones, setup the states in Australia only 8 of them so that was cool.

Under Zones Definitions I have 2 tax zones setup. A world tax zone that doesnt attract any GST, and an Australian tax zone that does attract GST.

Under tax classes, I have setup up a GST Class.

And finally under tax rates I have setup up the GST there under Australian Zones and it is set at 10%.

Now the problem is that if I create a test product and set the product net $10. Product Price Gross shows the correct amount at $11. When I preview that product to make sure the total is correct it is showing. When I preview it, it shows $13.10.

If a Product Net Price is $100, Product Price Gross shows $110 again no problems, when previewed it shows $130.97

Any suggestions?:shocking: I got nothing :no:

OK some more testing and it looks as though it is tacking another 10% on top of the already gross price which includes the 10% GST anyway before previewing.

Cant find anything anywhere that owuld make this happen, but being a noob, it will be hidden somewhere I suspect :yes:

Hi Guys and Gals, got most of the dramas sorted out, but during the payment stages it is displaying the GST twice and calculating it twice

Any ideas as to what would be causing this?

Well I got that sorted so no dramas. I removed all my zones I created for Australia. Created my zones again for Australia, re-entered them in My Store and tadah, now it works.:blink: Dont ask me, same things have been put back, guess its just one of those things. Now if I can just get the australia post module for the international side of things working I am full steam ahead.:yes:

I had the same problem where the tax was being added twice.

I realised it was because I also had an "All Zones" within the Australia zone as well as each individual state.

I originally had only "All Zones" for Australia since GST is charged everywhere. But some interstate customers weren't getting charged GST, so I created a zone for each state.

Now I have noticed that the GST is not being calculated correctly: A purchase of $130 says that GST is $13, but it should be $11.81 and I haven't been able to find any posts where this is resolved.

Would changing the tax rate to 9.09% be the most straight forward solution?

$130 / 11 = 11.81
$130 * .0909 = 11.81

First specify the basis for sales tax calculation:

Click on Configuration > My Store to access the My Store screen.

Set the following fields to

Basis of Product Tax - Shipping
Basis of Shipping Tax - Shipping
Display Prices with Tax - true

Add a tax class:

Click on Locations/Taxes > Tax Classes to access the Tax Classes screen.

set Tax Class Title to Taxable Goods

Add a tax rate:

Click on Locations/Taxes > Tax Rates to access the Tax Rates screen.

Then set

Tax Class to Taxable Goods
Zone to Australia
Tax Rate 10%
Description GST

Then in Locations/Taxes > Zones set all Aussie states and territories to country Australia.

That should be it.

Works for my 3 stores without fail. No taxes added to the total if the customer is from any country other than the Land of Oz.

Thanks.

I realised that it was the Shipping module that needed the Basis of Tax set to Shipping.

It seems that if new currency is selected e.g. U.S.$ from A$, price is recalculated in U.S.$ but is a higher price as it still includes GST.

If overseas customer logs in first, then price is calculated without GST.

Is there a way of having prices show up without GST for overseas currency without customer having to log-in first?

Jacksback2:

It seems that if new currency is selected e.g. U.S.$ from A$, price is recalculated in U.S.$ but is a higher price as it still includes GST.

If overseas customer logs in first, then price is calculated without GST.

Is there a way of having prices show up without GST for overseas currency without customer having to log-in first?

Principally YES, but it would require some coding based on the visitor's IP address.

Legally NOT.

Reason being that the ATO requires you to display your prices including GST. You need to charge GST if you ship your products to an Aussie destination (unless the products are classified GST free). You don't need to charge GST if the products are being shipped to an OS destination. This can only be determined when the customer logs in and specifies his/her shipping address during checkout.

You could have a customer who is an Aussie citizen and lives and works in the USA. If this customer requires his order to be shipped to the USA then there is no GST being charged. Now, this same customer travels to Australia and wants his order to be shipped to an Aussie hotel address. In that case you need to charge GST to the customer.

The same scenario has happened to me a number of times as I do have a customer who frequently travels between the USA and Australia. He usually places an order for his herbal supplements before he travels to Australia and has his products delivered to his hotel in Australia. In this case the IP approach would not work - it would be illegal.

Hope this makes sense:wacko:

Redsea,
It was my impression that only the final price had to include GST? Hence you could have a ex-gst price + gst = inc-gst price.
This is the way at least I remember reading the implementation at the time.
This way the internationals could at least see the tax exclusive price without needing to login.

epools:

Redsea,
It was my impression that only the final price had to include GST? Hence you could have a ex-gst price + gst = inc-gst price.

That is the way many of us wanted it to be when GST was first introduced, but alas the govt went against most other countries in this regard and outlawed it. All advertised prices must be GST inclusive (IOW you are assumed to have to pay the tax unless proven otherwise).

Cheers
Rod

One simple option may be to set all your taxes to zero, and have the same price for Australia and OS. This mean it's always correct for Australia, and you can always compensate OS purchases with cheaper shipping rates or other bonusses. it's not ideal, but it keeps things simple...

ttfan:

One simple option may be to set all your taxes to zero, and have the same price for Australia and OS. This mean it's always correct for Australia, and you can always compensate OS purchases with cheaper shipping rates or other bonusses. it's not ideal, but it keeps things simple...

We don't get this option. If we are registered for GST then it is assumed everything we sell/buy/provide has a GST component attached to it (regardless of whether credits for it are claimed or not, unless of course, it is an exempt item). No sensible merchant would bare the GST costs when they have the chance to pass it on.
If we are not registered for GST then we aren't allowed to charge GST anyway so it is a moot point...

Cheers
Rod

RodG:

We don't get this option. If we are registered for GST then it is assumed everything we sell/buy/provide has a GST component attached to it (regardless of whether credits for it are claimed or not, unless of course, it is an exempt item). No sensible merchant would bare the GST costs when they have the chance to pass it on.
If we are not registered for GST then we aren't allowed to charge GST anyway so it is a moot point...

Cheers
Rod

Or..........
You could charge the same price for Oz and for O/S
The Oz sales include gst (so you have to pay the gst)
The O/S sales have no gst component so you make more profit
You don't have to give the O/S buyer a discount just because there is not gst component.

You can sell products at the same price to both and work out afterwards what to pay the tax man.

You just have to make sure that that Oz sales have "gst inclusive" on the invoice
and O/S sales have "gst free" on the invoice

Unless you need to (for competitive reasons)
Why give a discount to O/S buyers?

gilby:

Or..........
You could charge the same price for Oz and for O/S

Assuming a GST registered business this means you'll be charging O/S a 10% GST on account of the fact that the advertised prices should be GST inclusive.

I don't think this is allowed.... Perhaps we can call it a non GST penalty? :-)

gilby:

The Oz sales include gst (so you have to pay the gst)

ALL sales would include GST which the merchant hands over to the ATO (no choice, the only way to not do this is claim it back as input credits)..

gilby:

The O/S sales have no gst component

This is where it comes unstuck, because we have charged the O/S customers GST on account of charging them the same as those that do have to pay GST. (Whether declared or not). It is ethically wrong too, why should O/S customers have to pay our local taxes.?

gilby:

so you make more profit

I think this is why it is probably illegal ... Collecting taxes on products that are not subject to tax, and then instead of declaring it and passing it over to the ATO (where they will refund to the O/S customer should the customer apply for it.) it is being pocketed.

Nice idea, but don't you think someone hasn't already thought about that?

gilby:

You don't have to give the O/S buyer a discount just because there is not gst component.

I doubt that this will stand in a court of law - It isn't a matter of giving the O/S buyer a discount, it is a matter of not charging them a tax that they are not required to pay, one that you/we merchants aren't entitled to collect.

gilby:

You can sell products at the same price to both and work out afterwards what to pay the tax man.

You must have the same accountant as Paul Hogan <grin>
He seems to think we have a choice in how much we give the tax man too.

Sure, there are ways that we can minimise our tax burdens, but what we are proposing here, no matter how we try to rationalise it; is a scam.

gilby:

You just have to make sure that that Oz sales have "gst inclusive" on the invoice and O/S sales have "gst free" on the invoice

.... and pocket the difference.... Way too risky for my liking....

gilby:

Unless you need to (for competitive reasons)
Why give a discount to O/S buyers?

We really aren't though ... all we are doing is charging them the same tax as we charge Australians, and keeping it for ourselves. I really don't know which of many laws this would be breaking, but I honestly can't see it being legal in any way, shape, or form.

In my (not so humble) opinion, I feel it is best to set the tax rates/zones up as they are supposed to be; display GST inclusive prices by default (only if registered for GST), and if an O/S customer does log in they'll then see the non GST prices (as they should). It's not a discount, it doesn;t lead anyone astray, doesn't break any laws, it is ethical, and the O/S customer gets a nice surprise).

Cheers
Rod

Lets play devil's advocate here :)

I decide to sell my fabulous new mousetrap to overseas customers for $100 (no gst)

I also decide that I don't want to disadvantage my local customers by charging them $100 + gst = $110
I value my local customers so I decide to sell to them at $100 as well and I will cover the gst myself
So for this sale I will (eventually) pay 1/11 ($9.09) to the tax man as gst

You are looking at it as a B2B type transaction, where you sell at a price then add gst... to another business (as if you were a wholesaler)

I look at it as a B2C (end consumer) where we sell at a price to the consumer then (afterwards) pay 1/11 of all total local transactions as gst to the tax man
I do not charge or collect gst on behalf of the tax man
I sell goods at a particular retail price (Sure it is gst inclusive)
Then at the end of the month I am obligated to pay 1/11 of all local sales to the tax man as gst

Cheers..

gilby:

Lets play devil's advocate here :)

Traditionally that's my job, but as long as someone takes the position it does keep the ideas flowing.

gilby:

I decide to sell my fabulous new mousetrap to overseas customers for $100 (no gst)

I also decide that I don't want to disadvantage my local customers by charging them $100 + gst = $110

I value my local customers so I decide to sell to them at $100 as well and I will cover the gst myself

So for this sale I will (eventually) pay 1/11 ($9.09) to the tax man as gst

I'm a little 'nervy' about your use of the word 'eventually' here.. GST is a pay as you go system, which means the last person in the list is the one that bears the full 10%. Everyone 'up' the line can claim their portion of it back..

gilby:

You are looking at it as a B2B type transaction, where you sell at a price then add gst... to another business (as if you were a wholesaler)

I look at it as a B2C (end consumer) where we sell at a price to the consumer then (afterwards) pay 1/11 of all total local transactions as gst to the tax man
.

Yoiks, you don't understand the system (sorry for being so blunt) . With GST there is no difference when dealing B2B or B2C ... Those days died 10 years ago. The concept of a 'wholesaler' for tax purposes no longer exists.

gilby:

I do not charge or collect gst on behalf of the tax man

Which means you are NOT registered for GST. Everything you sell is therefore GST free, in that you cannot add your own 10%, BUT, at the same time, everything you BUY already has an ever increasing tax embeded into it. If you are NOT registered for GST you cannot claim any of this back, you are the 'end user' and you bear the full cost. (Moustraps don't cost nothjing to build you know)

If you WERE registered for GST, you'd be able to reduce your costs by claiming back the credits from the GST already paid and passing them onto the end user....

Example: Suppose you were a reseller, doesn't matter if it is wholesale or retail, the exact same rules apply: Lets assume this mousterap costs you $90.00 to buy and you want to make $10 profit - easy, sell it for $100.
You're not collecting tax, so you can sell it overseas for the same price and profit, ok?

Now, register yourself as a tax collector (no choice if your turnover is over 75k p/a).. .. you still want to make $10 per sale, but if you continue to sell for $100, at the end of each month (or whatever) you'll need to give $9. to the tax man... You've now only made $1 profit on the sale. Now the cruncher, you cannot just add 10% on top of your $100 item to cater for this increased burden, because doing so is imposing a tax on a tax to the end user. (There were very severe penalities imposed on traders doing this when GST was first introduced), because the theory was, since wholesale tax was scrapped (and refunded to retailers) the prices of many items would drop as a result of GST rather than increase - as it did. Anyway, point being, profiteering by just jacking prices up by 10% wasn't, and probably still isn't tolerated (although there are times where this will occur - eg, service based income, rather than sales based).

What should be happening in this instance, the moustrap that cost you $90 has about $8.20 GST included in it ... you claim this back from the ATO, meaning that you've only paid $81.80 for it ... Add your $10.00 profit to this, and your pre-gst sale price is now $91.80 - You now add the GST, making the final sale price $100.98

Note: The consumer is only paying 98cents more as a result of you being registered for GST, you are still making $10.00 profit .. the slight increase is the result of the end user paying 10% gst on YOUR PORTION of the item's markup.

The tax man will expect (bill) you the GST portion of your total sales (in this case, $9.18), but, because you are claiming the 8.20 back as an input credit you only need pay the difference.. the 98cents, which you passed on to the end user anyway.
This is also why the B2B & B2C models are not relevent in regards to GST, the 'end user' is the one that cannot claim input credits (B2C), all else is B2B.

Sooo, where does this leeve us in regards to o/seas sales? If we are not registered then it make no difference, we don't add GST, we don't claim credits for GST paid. Everyone pays the same. You accept the tax that you paid when you purchased/made the origianl mousetrap.

If we are registered, for GST and we sell these items overseas for the same price as Australians, the implication is that we are charging GST where we shouldn't be... and that is illegal. Therefore we must give them a GST free amount on checkout, OR you can provide them with a tax invoice with instructions on how to reclaim the GST from the ATO (meanwhile, the ato has assumed you've already collected it and forwarded it on to them).

In short there is no way to avoid the GST.... overseas or local the ATO has it covered so that you'll do the 'right' thing and not charge GST where you shouldn't, and do charge where you should, and trying to do it any other way (no matter how it is presented) is going to end up with either
a) Breaking some law or other. or
b) Making $1.00 profit on overeseas sales, and $10 profit of local sales when selling an item for the same price, in this case, ~$100. You don't get to choose, it depends on the ability to claim back the input credits.

Short response to Devils advocate:
The ability or inability to claim back the input credits is what prevents us from 'choosing' whether to charge or not charge GST in any given situation. It isn't a matter of deciding whether to add GST or not.

Cheers
Rod

hi, I am having trouble with our GST and of course our BAS is late! I really hate GST!

Here is an invoice, the GST amounts for each item are correct as is the subtotal, but when you add the subtotal and shipping, the GST figure is out. I would really raelly appreciate some quick assistance, as when I export to quickbooks it is correcting the gst and increasing the sales amount!

Products Tax Price (ex) Price (inc) Total (ex) Total (inc) 1 x Mickey's Clubhouse Hanging Dangler Decorations 10.00% $11.32 $12.45 $11.32 $12.45 1 x Solid Red Rectangular Tablecover 10.00% $4.45 $4.90 $4.45 $4.90 1 x Mickey's Clubhouse Dinner Plates 10.00% $9.50 $10.45 $9.50 $10.45 1 x Minnie Mouse Cups 10.00% $8.91 $9.80 $8.91 $9.80 1 x Minnie Mouse Dinner Plates 10.00% $9.50 $10.45 $9.50 $10.45 1 x Mickey's Clubhouse Blowouts 10.00% $8.59 $9.45 $8.59 $9.45 1 x Mickey's Clubhouse Beverage Napkins 10.00% $8.73 $9.60 $8.73 $9.60 Sub-Total: $67.10 Australia Post (Registered Parcel over 500gm): $18.35 GST (10% tax included): $7.77 Total: $85.45

jazzah:

hi, I am having trouble with our GST and of course our BAS is late! I really hate GST!

Here is an invoice, the GST amounts for each item are correct as is the subtotal, but when you add the subtotal and shipping, the GST figure is out. I would really raelly appreciate some quick assistance, as when I export to quickbooks it is correcting the gst and increasing the sales amount!

Products Tax Price (ex) Price (inc) Total (ex) Total (inc) 1 x Mickey's Clubhouse Hanging Dangler Decorations 10.00% $11.32 $12.45 $11.32 $12.45 1 x Solid Red Rectangular Tablecover 10.00% $4.45 $4.90 $4.45 $4.90 1 x Mickey's Clubhouse Dinner Plates 10.00% $9.50 $10.45 $9.50 $10.45 1 x Minnie Mouse Cups 10.00% $8.91 $9.80 $8.91 $9.80 1 x Minnie Mouse Dinner Plates 10.00% $9.50 $10.45 $9.50 $10.45 1 x Mickey's Clubhouse Blowouts 10.00% $8.59 $9.45 $8.59 $9.45 1 x Mickey's Clubhouse Beverage Napkins 10.00% $8.73 $9.60 $8.73 $9.60 Sub-Total: $67.10 Australia Post (Registered Parcel over 500gm): $18.35 GST (10% tax included): $7.77 Total: $85.45

I'd love to help, but you're going to have to make it a lot easier than you have. The formatting is dreadfull, and you have way too many items needed to make the point.

What I find is the best/easiest way to tackle this (or when asking for help), would be to create a test product for your store that has a nice round figure, eg "$10.00" ($11 with GST).

Add this product to a cart, obtain a shipping quote on just this one item, and we will all have a much easier time adding the two numbers to see what is going on. If you can't see it for yourself, post the results here (as you have already done). The difference being is that we'll have nice simple numbers to work with, rather than trying to add a dozen from an unformatted list, and then trying to reverse engineer the final result.

Also, what shipping module are you currently using?

Cheers
Rod

hi Rod, I did try and fix my post but the administrator would not allow me to!!

Here is a simple version

Sub-Total: $110.00

         Australia Post (Parcel under 250gm):  $6.05

GST (10% tax included): $10.55

  Total: $116.05

GST should be $11.60
I am using your module of course! (what else would an Australian dare use!) Paid version. I have Tax Class at 10% GST included selected in the module.

If I unselect that setting I get $10 GST and the GST in the shipping is obviosult not taken into account.

Thanks
Junelle