posted on March 30, 2002 07:03:10 AM
I just received an EOA notice from a Canadian seller advising me that I have to include 7% GST on my win, including the shipping and "handling" fee which is about 4 times the cost of the item. I have purchased 100's of items from other Canadian sellers and have never encountered this one before.
Any tax experts out there? I am not comfortable paying 7% on the item (first of all) and certainly have a problem with paying 7% on the seller's graft (handling) fee.
posted on March 30, 2002 07:42:39 AM
you are in canada??is the item being shipped from one part of canada to another part of canada??
do you pay GST now when you go shopping in a brick and mortar store??
posted on March 30, 2002 09:42:09 AM
Surprised you haven't run across it, I am not Canadian, but it is my understanding that the GST applies to most retail transactions, and ebay would probably be included. You probably have dealt with under the table, unprofessional sellers, or those who perhaps pay the GST themselves? When I was in California, I had some people question me taking sales tax, I gave them my resell number and asked them to inquire at the State Board of Equalization as to my status. I never heard a second complaint from anyone. I paid sales tax on all my California sales, sounds like this guy is trying to do the same with the GST. Now, if you are out of Canada, then it would be a scam, items going out of the country are not subject. Foreigners can actually get their GST refunded (except for food and lodging) on their way out of the country...
posted on March 30, 2002 09:46:22 AM
If the seller is a registered business they are required to collect applicable taxes for all items sold within Canada. This includes 7% GST (15% HST if you live in Nova Scotia, New Brunswick or Newfoundland) and provincial taxes if you live in the same province as the seller.
If the seller is collecting GST I believe you can request his or her business registration number which the business must have under federal tax laws. As far as I know they must provide this information if requested, it's usually printed on an invoice or receipt.
Some sellers absorb the cost of GST as part of the sale, others apply it to the sale price of the item. Individuals selling items on a part time basis (i.e. the selling of personal property) are not required to collect GST. There are both types of sellers on eBay, some have eBay sales as a larger part of another business so it is entirely possible that you will be required to pay GST.
Most sellers I have dealt with state that Canadian bidders are required to pay applicable taxes in the auction listing or that it is included in the final cost.
The legislation for GST permits retailers to either include GST as part of the sticker price of an item or add it to the total price of the item at the point of sale. I believe one reason why this was done was to allow gas stations to have GST included as part of the "price at the pump" while still permitting retailers to indicate the taxes applied over and above the retail price of the item.
If you want more information regarding GST and when and where it is to be applied to a sale I suggest you visit the Revenue Canada website:
posted on March 30, 2002 09:47:08 AM
I don't have a problem with paying GST on the item and *actual* mailing costs, but I don't believe I should give the seller 7% of his "handling fee" which is exhoribitant to start with. I wonder what the law says about this?
btw ... the other Canadian sellers I have dealt with are very large retail operations with eBay feedback in the thousands ... certainly not "under the table" type sellers!
posted on March 30, 2002 09:51:29 AM
I can't see how someone could absorb a 7% tax in the cost of an auction item. Seems too high to me. Also, just because someone has a large operation does not necessarily mean they are operating above board. They wouldn't be the first. I do agree that paying GST on handling fees seems wrong, you definitely want to check and see if you are liable for just the purchase of the item. I know in California, I figured out sales tax based on the cost of the item, not on the total cost with shipping. Some sellers did, and that is a scam.
posted on March 30, 2002 09:52:57 AM
Check out the link I gave above, somewhere buried on that website is a page regarding the application of GST to auctioneers...
They outline what part of the sale GST is to be applied to. I don't believe it is to be applied to the "handling fee" but I could be wrong...
posted on March 30, 2002 10:24:40 AM
Thanks for the link ptimko. In part, it says this "the auctioneer does not charge GST/HST on services provided to the principal that are related to the sale to the customer (e.g., freight, storage, commissions, advertising)", so it looks as though I may have an argument with the seller.
posted on March 30, 2002 11:43:44 AM
That's sounds correct, those are the costs that I assume a "handling" charge would cover...
Just be careful how you argue your case. If the amount of tax payable is less than a dollar I'm not sure that's it's worth getting negative feedback over...
Of course you could always just pay the taxes and then write a complaint to Revenue Canada about it. It may only be a small amount per auction but it can add up to some pretty big cash if applied over lots of sales...
posted on March 30, 2002 12:36:48 PM
Thanks again ... It is a relatively small amount (around $12.00) so I will pay it. I just am not sure about the legality and I am not convinced the seller will actually give this money to the government.
I want the item and I really don't care about negative feedback anyway. I will, however, add this seller to my list of "no more buy froms".
posted on March 30, 2002 12:52:24 PM
Ask him for his GST # before you pay. If he is not forthcoming with it, do not pay. If he collects that tax in your country he has to give you the # if you request it.
posted on March 30, 2002 01:11:25 PM
That's usually what I do...
Once in awhile I run into a seller who I feel charges too much for handling, etc. Whenever this happens I don't buy any more items from them even if it is something I want...
It seems to me that a high feedback rating is not always a good indication, lately I've been looking at the number of repeat buyers to assess a sellers performance. If the total number of positive feedback minus the feedback rating is high, it indicates repeat business and is probably a better index to evaluate sellers with high feedback ratings. At least this seems to be true in the category of stamps where I do almost all of my buying (and some selling)..
It may only be a small amount per auction but it can add up to some pretty big cash if applied over lots of sales...