Paying GST on a replacement device sent by Microsoft

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Geektastic

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#2478973 7-May-2020 22:15

It makes far more sense to me that there should be no question of GST on a replacement item under warranty.

You buy item A and it breaks.

You ask the manufacturer to replace item A. It does so.

You have not bought a second item A. All you have done is swap your broken item A for a new working item A.

Customs should really just make a statement that items replaced under warranty are not subject to GST. If you took item A back to (say) Noel Leeming and they replaced it on the spot with another one from stock, they would not then charge you GST.

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sbiddle

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#2479004 8-May-2020 07:48

Geektastic:

Customs should really just make a statement that items replaced under warranty are not subject to GST.

Items repaired are not subject to GST.

Items replaced could be, and the simple fact is a law written as simply as you suggest could be subject to so much abuse it would be totally unworkable.

cshwone

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#2479005 8-May-2020 08:05

sbiddle:

Geektastic:

Customs should really just make a statement that items replaced under warranty are not subject to GST.

Items repaired are not subject to GST.

Items replaced could be, and the simple fact is a law written as simply as you suggest could be subject to so much abuse it would be totally unworkable.

Could you provide some specific examples of warranty replacements being subject to GST?

sbiddle

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#2479028 8-May-2020 08:33

cshwone:

Could you provide some specific examples of warranty replacements being subject to GST?

The simple fact there is nowhere in the law that I'm aware of that specifically says a brand new warranty replacement item is exempt from GST.

The law makes it very clear that goods exported for repair or refurbishment is exempt. A new replacement product is a different product to the one originally exported so this would not apply. The reference around this in regards to the actual product because a blanket exception allowing this would be a massive rort (ie a company could just keep sending used products overseas and receiving new replacements for free).

http://www.legislation.govt.nz/act/public/2018/0004/latest/DLM7039425.html?search=ts_act%40bill%40regulation%40deemedreg_customs+and+excise+act+2018_resel_25_a&p=1

Customs however make it clear that for an individual that they will not charge GST and duty on warranty replacements but you have to supply evidence of this occuring. While this policy is specifically written in reference to goods purchased from overseas, it also applies to any goods returned overseas for replacement.

https://www.customs.govt.nz/personal/online-shopping/

cshwone

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#2479031 8-May-2020 08:41

So for an individual, obtaining a warranty replacement, with the supporting chain of correspondence, GST won't be charged. Which is what this thread is about surely?

BlinkyBill

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#2479032 8-May-2020 08:44

cshwone:

Could you provide some specific examples of warranty replacements being subject to GST?

where the replacement item is priced differently to the original, and a payment is made by the purchaser or refunded by the seller, for some reason.

Geektastic

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#2479048 8-May-2020 09:08

sbiddle:

Geektastic:

Customs should really just make a statement that items replaced under warranty are not subject to GST.

Items repaired are not subject to GST.

Items replaced could be, and the simple fact is a law written as simply as you suggest could be subject to so much abuse it would be totally unworkable.

Well, put it this way, NZ is the only place where I have ever come across even a suggestion that if your already paid for product fails and has to be replaced, you should be taxed again on something that is neither your fault nor done at your instigation.

Only someone with a fanatical belief in paying GST could possibly think that met any reasonable definition of fairness.

SirHumphreyAppleby

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#2479060 8-May-2020 09:38

Geektastic:

Well, put it this way, NZ is the only place where I have ever come across even a suggestion that if your already paid for product fails and has to be replaced, you should be taxed again on something that is neither your fault nor done at your instigation.

I think the intention is to make a distinction between items provided as genuine warranty replacements, versus repair or changeover costs at your expense.

surfisup1000

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#2479062 8-May-2020 09:44

sbiddle:

cshwone:

Could you provide some specific examples of warranty replacements being subject to GST?

The simple fact there is nowhere in the law that I'm aware of that specifically says a brand new warranty replacement item is exempt from GST.

So you think customs are breaking the law when they are allowing GST exemptions on warranty replacements?

Customs can write whatever they like on their website, but, this has to be in law.

[edit] This is written in law.

http://www.legislation.govt.nz/act/public/2018/0004/latest/DLM7039425.html?search=ts_act%40bill%40regulation%40deemedreg_customs+and+excise+act+2018_resel_25_a&p=1

Customs interprets the law as follows...

If your goods have been repaired free of charge under warranty, the value of the repair for Customs purposes will be nil so no duty will be payable. Customs may however, ask you for proof that the repair of refurbishment was made free of charge.

SpartanVXL

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#2479201 8-May-2020 12:19

I’ve had GPU’s replaced through overseas shipping, never had to deal with GST. Declared as warranty repair even though it ended up as a replacement it came back with no issues.

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