GST on shipping charges for overseas purchases = theft

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heylinb4nz

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#173189 14-May-2015 13:37

I recently purchased a phone and had the displeasure of having to pay GST on not only the goods value but also the shipping. I do wonder why NZ Government feel they have claim over the total shipping cost, when in fact in all fairness it should be the amount it would have cost to ship within NZ.

ie if an engine costs $1500 to ship from overseas and $200 within NZ, then the tax should be based off $200 not $1500.

I know this is bound by legislation, therefore in my mind it is legalised theft by the NZ Government.

Most of the time its on amounts like $30 for small electronic goods and car parts, so most likely no one will challenge in court.

Be interesting to see how much money government would have to pay out if challenged and lost.

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#1305134 14-May-2015 13:42

ie if an engine costs $1500 to ship from overseas and $200 within NZ, then the tax should be based off $200 not $1500.

If local product costs $200, why do you even buy $1500 overseas?

wellygary

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#1305141 14-May-2015 13:45

If you had purchused the good from a NZ retailer the international freight charge would have been included in the retail prices you would pay (and hence the GST you would pay)

GST is levied on imports in an attempt to help the prospects of local suppliers

Its pretty standard around the world for taxes to be levied on the cif price of an import

heylinb4nz

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#1305142 14-May-2015 13:45

nakedmolerat:

ie if an engine costs $1500 to ship from overseas and $200 within NZ, then the tax should be based off $200 not $1500.

If local product costs $200, why do you even buy $1500 overseas?

No I mean the shipping costs.

Say

Overseas $500 engine + $1500 shipping

vs

Local $2200 engine + $200 shipping

Why do government have GST claim on the $1500 shipping when they only really had fair claim on $200...the whole point of GST recouping any loss of tax revenue by purchasing outside NZ.

NonprayingMantis

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#1305143 14-May-2015 13:46

GST is a percentage of the money paid. The price of something else is irrelevant.

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#1305144 14-May-2015 13:46

He means to ship within NZ once it hits our shores.... I think.

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nakedmolerat

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#1305145 14-May-2015 13:48

heylinb4nz:
nakedmolerat:

ie if an engine costs $1500 to ship from overseas and $200 within NZ, then the tax should be based off $200 not $1500.

If local product costs $200, why do you even buy $1500 overseas?

No I mean the shipping costs.

Say Overseas $500 engine + $1500 shipping

vs

Local $2200 engine + $200 shipping

Why do government have GST claim on the $1500 shipping when they only really had fair claim on $200...the whole point of GST recouping any loss of tax revenue by purchasing outside NZ.

I thought the 'local' shipping cost does include GST?

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#1305147 14-May-2015 13:48

So, following this through...

I import a container of goods, and choose my shipping method, which costs me $x,000 to gets goods from, say, Los Angeles to Auckland Port.

I then pay my normal freight company to transport the goods from the port to my warehouse (after I've paid duty, GST on the goods, customs fees, etc.)

You're saying that I should only pay GST on it the international part of an equivalent port to warehouse price that 'someone', 'somewhere' decides.

Don't forget, the system isn't really designed for small imports, it's all geared around large volumes of freight.

SirHumphreyAppleby

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#1305148 14-May-2015 13:50

heylinb4nz: I recently purchased a phone and had the displeasure of having to pay GST on not only the goods value but also the shipping. I do wonder why NZ Government feel they have claim over the total shipping cost, when in fact in all fairness it should be the amount it would have cost to ship within NZ.

I agree, this should not be the case, and I believe if you ship goods overseas from the post office, versus sending using stamps or other pre-purchased postage, the shipping is GST exempt, despite the fact that a similar amount of processing occurs within New Zealand.

Most of the time its on amounts like $30 for small electronic goods and car parts, so most likely no one will challenge in court.

Unlike other countries, our courts can only consider application of the law, not the law itself. If it is indeed in legislation (and I believe it is) that postage also attracts GST, then our legal system cannot change that.

heylinb4nz

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#1305153 14-May-2015 13:55

notesgnome: So, following this through...

I import a container of goods, and choose my shipping method, which costs me $x,000 to gets goods from, say, Los Angeles to Auckland Port.

I then pay my normal freight company to transport the goods from the port to my warehouse (after I've paid duty, GST on the goods, customs fees, etc.)

You're saying that I should only pay GST on it the international part of an equivalent port to warehouse price that 'someone', 'somewhere' decides.

Don't forget, the system isn't really designed for small imports, it's all geared around large volumes of freight.

No im saying you shouldnt have to pay GST on the entire shipping amount, if the same item in NZ costs $200 to ship then why should the government be able to claim tax on $1500 ??? the majority of the service provided has been fulfilled and undertaken by a company outside of NZ, the government is not missing out on any tax (bar what youd reasonably expect to pay in NZ for same goods to be delivered....in this case $200).

heylinb4nz

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#1305154 14-May-2015 13:57

SirHumphreyAppleby:
heylinb4nz: I recently purchased a phone and had the displeasure of having to pay GST on not only the goods value but also the shipping. I do wonder why NZ Government feel they have claim over the total shipping cost, when in fact in all fairness it should be the amount it would have cost to ship within NZ.

I agree, this should not be the case, and I believe if you ship goods overseas from the post office, versus sending using stamps or other pre-purchased postage, the shipping is GST exempt, despite the fact that a similar amount of processing occurs within New Zealand.

Most of the time its on amounts like $30 for small electronic goods and car parts, so most likely no one will challenge in court.

Unlike other countries, our courts can only consider application of the law, not the law itself. If it is indeed in legislation (and I believe it is) that postage also attracts GST, then our legal system cannot change that.

Quite convenient for the powers that be isn't it :)

Some might say we vote them out for such things, but the incoming government would not likely repeal a law that make them $$$$.

SirHumphreyAppleby

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#1305157 14-May-2015 14:01

heylinb4nz: Some might say we vote them out for such things, but the incoming government would not likely repeal a law that make them $$$$.

National increased GST, but to their credit, they also increased the GST/duty exempt allowance proportionally from $50 collectable to $60. Labour wouldn't have done that. We're more likely to see an attempt at GST on everything with zero allowance being policy than removing GST on shipping. That's definitely something to vote against!

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#1305186 14-May-2015 14:46

Always do your research first.

If you don't assume what the costs will be, then you won't get a shock at the costs.

bazzer

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#1305195 14-May-2015 14:52

The point is that the service is being provided to you in NZ. So there is GST on that. That's fair I think (insofar as GST is fair) since we pay GST on all goods and services in NZ.

As mentioned above, if you send something internationally you don't have to pay the GST (even though you would argue you should since some of the service is occurring in NZ).

It seems that for international shipping, quite a lot of the service is being provided in no-man's-land, so they make a call about how to categorise it, and they do that based on the destination.

heylinb4nz

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#1305202 14-May-2015 15:04

bazzer: The point is that the service is being provided to you in NZ. So there is GST on that. That's fair I think (insofar as GST is fair) since we pay GST on all goods and services in NZ.

As mentioned above, if you send something internationally you don't have to pay the GST (even though you would argue you should since some of the service is occurring in NZ).

It seems that for international shipping, quite a lot of the service is being provided in no-man's-land, so they make a call about how to categorise it, and they do that based on the destination.

The only portion of the service provided in NZ is delivery from Auckland Depot to my home, the majority of the service occurs outside of New Zealand and therefore should be exempt. Essentially the government are using a dirty piece of legislation to tax 100% of a service the majority of which occurs outside NZ.

I think a flat rate fee based on box size and weight range to get parcel from port of entry to destination would be fairer....but that would just be wishful thinking.

bazzer

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#1305205 14-May-2015 15:14

heylinb4nz:
bazzer: The point is that the service is being provided to you in NZ. So there is GST on that. That's fair I think (insofar as GST is fair) since we pay GST on all goods and services in NZ.

As mentioned above, if you send something internationally you don't have to pay the GST (even though you would argue you should since some of the service is occurring in NZ).

It seems that for international shipping, quite a lot of the service is being provided in no-man's-land, so they make a call about how to categorise it, and they do that based on the destination.

The only portion of the service provided in NZ is delivery from Auckland Depot to my home, the majority of the service occurs outside of New Zealand and therefore should be exempt. Essentially the government are using a dirty piece of legislation to tax 100% of a service the majority of which occurs outside NZ.

I think a flat rate fee based on box size and weight range to get parcel from port of entry to destination would be fairer....but that would just be wishful thinking.

Well, that's just, like, your opinion, man. The service would be pretty useless without that last little bit that occurs in NZ though, wouldn't it?

I get that you're annoyed about it, and no amount of discussion will get you to see a different point of view. That's cool, but makes this thread a bit pointless.

What do you think of the fact that there is no GST on shipping out of NZ. How much of that shipping charge should be charged GST? Everything except the last little bit in the destination country?

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