Austpost ATO Charging Tax on Warranty Replacements from Overseas

Laxelfoley7 on 24/03/2019 - 20:45

Hi ozbargainers, Looking to see if anyone has experienced the same and what was the outcome.

I bought a product on Amazon US, shipped here via austpost’s shipmate. Had an issue with the product and the manufacturer Is replacing the product under warranty for free. Austpost have advised me that they still have to withhold the 10% tax on the value of the product “as advised by the ATO”. I called the ATO and no can help me, they have literally said to me “no one has asked us about this”

I have no issue paying the 10% as per the <1000 rule, but absolutely against them charging it again for a replacement.

Any advice would be great!!

General Discussion

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Comments

  • [Deactivated] on 24/03/2019 - 21:28

    So you haven't sent one back?

    Unfortunately the laws don't state working or not and the declared value can't reflect breakage.

    • axelfoley7 on 25/03/2019 - 05:43

      Yes manufacture said “don’t worry about sending the old ones back”…

      As for the second bit, if domestically I walked into HVN or JB paid GST and then then had a product replaced under warranty, I don’t get charged GST if the product is replaced under warranty, so trying to understand why this applies to international purchases

      • [Deactivated] on 25/03/2019 - 09:05

        I absolutely agree with you in theory. Unfortunately the international GST legislation was messy and piecemeal and dumped on lowly disinterested workers to collect. The post office has no ability to decide what they are instructed to collect. If they did, they would have to employ more staff. It's a real problem to have one set of people collecting on behalf of another. I think the only option will be paying it twice and claiming with the ATO.

  • Jimothy Wongingtons on 24/03/2019 - 21:31
    +2

    So youre issue is with them charging your replaeement?
    Why dont you get shipper to file a replacement commericial invoice saying free of charge?

    • axelfoley7 on 25/03/2019 - 05:45

      Good suggestion, will ask the AustPost guys said they have to charge based on “value”

      I will ask for it and see if aust post can use that instead or original invoice

    • ESEMCE on 25/03/2019 - 09:14

      It'd be better for it to be shipped as $999 value
      Customs will query the value of a $0 item.

      • Randxyz123 on 25/03/2019 - 09:18

        Surely they can put the value as “$0 - warranty replacement”??

        Speak with whoever you’ve been dealing with from the manufacturer.

      • axelfoley7 on 25/03/2019 - 09:28

        with the new govt regulation anything under $1000 incurs GST (since 1st July 18). Regardless of the value of the item, the Govt should not be double dipping on GST, they don't expect the consume to pay for it in Australia, so why overseas.

  • GangGang on 24/03/2019 - 21:49
    -1

    I don't understand.

    • You purchased an item from overseas & paid the tax
    • It's faulty & will be replaced for free under warranty.

    absolutely against them charging it again for a replacement.

    This is the part I don't understand. What else are you paying for & why would you need to pay tax again?

    • [Deactivated] on 24/03/2019 - 21:57
      +1

      I presume they declared the value again and the Post Office is collectng as per instructions.

      • axelfoley7 on 25/03/2019 - 05:47

        Yes so as an example if I bought something for $10 + $1 GST. I’m getting said product replaced they are trying to add $1 on again.

        • GangGang on 25/03/2019 - 07:59
          +1

          Yeah the extra 10% is the part I didn't understand. Isn't the new invoice priced at $0 for warranty?

          I defenitly wouldn't give up and contact the ATO again.

          • axelfoley7 on 25/03/2019 - 09:29

            @GangGang: yes have emailed - but not heard anything back - will call if I don't get a response today.

      • GangGang on 25/03/2019 - 07:54
        +1

        Wow, double dipping.

  • minniethemoocher on 24/03/2019 - 22:19

    I would talk to customs, not the ATO. Depending on who charged GST in the first place you may be entitled to GST on the returned item according to this link https://www.ato.gov.au/business/international-tax-for-busine…
    But try talking to customs first.

    • axelfoley7 on 25/03/2019 - 05:48

      Absolutely can do, thanks for the suggestion. I took it up with the ATO because that’s who austpost quotes in the first place.

    • axelfoley7 on 25/03/2019 - 09:36

      oh thanks for the link.. I did see this URL which is off yours. It doesn't quite address it - however it looks like the AustPost "ShopMate" Service is responsible for charging the GST to me, as they are "selling it" to me.

      Section "When you use re-delivery services"

      https://www.ato.gov.au/business/international-tax-for-busine…

  • hawkeye on 24/03/2019 - 22:34
    +3

    Ring the ATO and waste their time the more they have to document this the better chance they'd abolish it.
    Swinging voter would set me in the Feds coming soon.
    Thanks again Gerry harvey

  • garetz on 24/03/2019 - 23:18
    +3

    GST stands for goods and services tax, which should only be paid on purchase or sale, since neither is occurring i would contest it.

    • ESEMCE on 25/03/2019 - 09:15

      Could also fall under Importation Duty though..

      • axelfoley7 on 25/03/2019 - 09:30

        if that's the case then call it so… don't call it GST.

  • spal on 25/03/2019 - 04:56

    Play it then ask the Customs or ATO for refund, either on the replacement or on the original purchase. Import duties are payable on the value of goods. IMHO your best bet would be to ask for a refund on the original purchase. If it didn’t work, its value would be only the salvage plus shipping and handling fees.

    • axelfoley7 on 25/03/2019 - 05:50

      Thanks for the suggestion. Will try some of the options above and then go down this path.

      Thanks

  • Baysew on 25/03/2019 - 09:36

    How much is the GST you have to pay?

    • axelfoley7 on 25/03/2019 - 09:42

      I am not worried about the money - the principal of double dipping (or if it was replaced again triple dipping), at which point will the govt stop taking money out my pocket. For one person its a small amount, however accumulated over all the transactions made by Australians it wouldn't probably add up quite a bit.

      • Baysew on 25/03/2019 - 09:46

        I am not worried about the money

        That is a sentence you don't expect to see on OzBargain

        So how much money is being taken out of your pocket?

  • foxmulder on 25/03/2019 - 10:23

    I'm guessing you do it this way. Enquiry Auspost from Shopmate from the FIRST order, to get GST refunded with proof that you are returning item and you need to repurchase.

  • axelfoley7 on 25/03/2019 - 18:48

    Soo… got this from the ATO…. if anyone else needs it. thanks for everyone's help
    ******* Start email*****
    I refer to your recent GST inquiry.

    See written guidance below:

    Law Companion Ruling LCR 2018/1, which deals with sales of *low value imported goods, states at paragraphs 252 and 253:

    Example 24 - damaged goods returned by recipient

    1. Olympia also orders one pair of shoes in her favourite style from Get-Nu-Shoes. On delivery she discovers that the shoes have been badly damaged. She informs the merchant who arranges for a free replacement pair to be sent to Olympia.

    2. No adjustment is necessary in Get-Nu-Shoes return for the replacement shoes. GST has already been charged on the supply of the original pair of shoes.

    (*A low value imported good has a customs value of AUD $1,000 or less)

    In example 24 above, no GST applies to the supply of the replacement item, as there is no further payment for the replacement item. If a replacement item is provided free of charge, but the customer does not return the original item, again no GST applies to the supply of the replacement item, as there is no further payment for the replacement item.

    If you return the faulty good and receive a full refund (including GST) on the original supply the ATO would take the view that the original supply was cancelled.

    From an ATO perspective we can provide you with this written guidance on the transaction however, only the entity that charged you GST on the supply of the replacement item could obtain a private binding ruling on whether GST applies to the supply of the replacement item to you, as this issue concerns its tax affairs. Any GST payable to the ATO on a taxable supply is payable by the supplier or entity treated as the supplier under special rules (for example, under the redeliverer rule for supplies of low value imported goods) unless a reverse charge GST rule applies. It appears that AustPost is acting as a redeliverer when people use its ShopMate service and as such they are the deemed supplier of low value imported goods.

    Information on GST and international freight transport is available at the following link: https://www.ato.gov.au/Business/GST/In-detail/Rules-for-spec…

    ******* End email*****

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