Have recently tracked cashback from Amazon by Cashrewards, was surprised to see it calculated without GST. I never took notice of that although I have been using cashback fro years. Is that a new thing?.. When asked Cashrewards support was referred to terms where it is written.
Does not really make sense, won't you expect cashback advertised in %% out of full amount, not excluding GST?..
They are "losing out" on any cashback. In my opinion, they should advertise the %% excluding GST already. So, for example, if it is "10%", they should advertise it as 9% because that really what it is.
Because it saves them 10%.
This. ShopBack don’t do that
That's an interesting one. On shopback Amazon page they also state that they will not calculate cashback on GST, but I am not sure how they actually do it.
Yes they do. The terms are set by Amazon and apply to both CR and SB.
GST is a tax government collect. When you buy a product or services, GST portion is not going to the seller, it goes to the government. Seller is just acting as a intermediary to collect the GST and forward it to the government.
Sellers who is registered for GST simply adds 10% tax on behalf of the government. So if the sellers sale price of a product is $100, they sell them $110 including GST. Since its the seller participating in the cashback promo, they are providing the cashback on their product price (excluding GST) as GST is technically not part of the income. Its a tax they collected on behalf of the government.
It sounds logical and it seems that they do it with all retailers. Shouldn't they advertise it properly then?
Since its the seller dictating the terms of promotion, they can decide whatever they think is most benefical to them. I would not personally give cashback on the GST portion, but some might think otherwise.
I never read the detailed terms of cashback, usually just check cashback percentage and assume cashback on the price excluding GST. So i am not sure if the have any detailed term or not. If there isn't, i agree that those details should be made availabe to the buyer. Maybe its something you can suggest to them.
I'd say Amazon has better lawyers and accountants.
I've got some experience as a sole trader who is registered for GST. Summoner is 100% correct.
Just to expand a little on it, say I sell my wares for $100,000 ex gst, I'll end up paying $10,000 GST to the tax office. Say I buy a product for $110 inc GST (from an Australian seller*), I then claim the GST on that purchase and I will owe the government $9,990.
Say I'm the seller for that item, the tax invoice is for $100 + $10 GST, it doesn't matter if I give you a cashback, I still owe the government that GST amount.
It depends on the store, regardless if it is from CR or SB.
For example:
HDMI cable from local seller on Amazon AU via CR - calculated incl GST.
Arts and Crafts from US seller on Amazon AU vis CR - calculated ex GST
Pets food from Petbarn via CR - calculated ex GST
Is that a new thing?..
No. It's been happening since I started many years ago
Edit: in fact my very first cashback was a laptop directly from Lenovo via CR and it was calculated ex GST. I put an enquiry in and got something basically said not my problem. I now just calculate cashback ex GST. If they include GST, bonus. These days SB challenges explicit say if you meet criteria ex/Inc GST anyways. For example (this one)[https://www.ozbargain.com.au/node/681870] posted by GYB says inclusive of GST.
Amazon and cashback are global companies.
Not every jurisdiction in the world has the same GST rate. e.g. every state in USA has different sales tax so tracking cashback would be even more complicated.
I'm thinking because the cashback is considered a separate sale, but as an individual who's not registered for GST, the seller is not getting its input tax credits, so why would they lose out?