RSA

GST and Sellers

This document has been written by Ross's Sales & Auctions to assist you in understanding how the GST will affect your auction sales. This is intended as a guide only and for further clarification on the GST and its affect on you, please contact the Australian Taxation Office.

Since Saturday 1^st July 2000, the Goods and Services Tax ("GST") has been in effect.

As of the 1^st of July 2000, the price of most goods & services are subject to GST.

What are the implications for a GST registered entity selling through the auction rooms?

When a GST registered company or person, or one that is required to be registered, sells items through auction, GST at the rate of 10% would apply to most goods sold through auction rooms.

The company or person would subsequently be required to prepare a Business Activity Statement, which depending on the status of the entity would be lodged with the ATO every month or quarter.

Is GST payable on the sellers commission?

Yes, the sellers commission is considered a taxable supply of the auctioneer's services. Accordingly, GST on any fees or commissions would be required to be charged to the vendor by the auctioneer.

How will the GST be treated on new goods, second hand goods, buyers premium and commission?

In general, if the vendor is registered or required to be registered the sale of new or second hand goods will attract the GST. The vendor is required to charge the purchaser the GST, collect the GST and subsequently remit the amount to the ATO (after claiming any applicable input tax credits)

The buyers premium is generally considered to form part of the total consideration or sale price of the item. Accordingly GST would be charged on this amount as well.

The commissions to any vendor (registered or not) will be subject to the GST provisions.

Who is responsible for the remittance of GST imposed on the sale of items through the auction process, the agent or the vendor?

In accordance with general law principals, the vendor is ultimately responsible for the collection and remittance of any GST applicable to the sale of an auctioned item.

In most circumstances, where the vendor is registered, the GST-inclusive sale price, less auction fees or commission, is passed on to the vendor who must then account for GST in their business activity statement.

Will GST apply to second hand goods, that have already had GST paid on them?

Yes, the sale of second hand goods, is considered a taxable supply and will be subject to GST provided the vendor is registered or required to be registered.