GST, HST, and VAT

[dutchman48]

My question of the day for any sellers which include Tax in their prices.

If you sell an item to a country that you are not required to collect tax from, do you reduce the price by the amount of the Tax or Vat?

[cumos55]

As a seller of books it is not possible to apply GST/HST as a separate cost.... books as opposed to shipping cost

For GST provinces it is GST = 5 % applied to both the book p;rice and shipping cost.

For HST  provinces  this cannot be done

The full value for HST is applied to the cost of shipping..... 13 %, 14 % or 15 %

However, for books  there is a point of sale rebate,  and the provincial part of HST is not applied to the sale of books.

This means that for all HST provinces, it is HST = 5 %  for books.

Invoicing on eBay does not allow a seller to apply a separate HST value for the sale of a book as opposed to the cost of shipping.

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Only once has a US buyer questioned the inclusion of GST/HST in the price of a book and shipping cost .

The  response to this buyer was stated .....

(1) Shipping to the US ... does not include  GST or HST... does not include Tax

(2) For books  it was stated that GST  is paid with the purchase of inventory (Seller is located in Manitoba) ....  and this value was applied as GST or HST to the price of a book ....when tax paid by a Canadian buyer, and only a Canadian buyer.  ...  where GST = HST = 5 %

(3)  If the cost for shipping by a US buyer is greater than the actual cost of shipping, then this is defined as a handling cost. 

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There is NO rebate of GST or HST  predicted when books are purchased  by US Buyers 

[dutchman48]

I checked a competitors site that includes 17% VAT in their fees.

If you are not a VAT country, they divide your fees by 1.17 which is very nice as it reduces fees considerably for non VAT countries. (It shows on your monthly invoice)

It can be done and some do it without asking.

[femmefan1946]

The definition of free shipping is .... zero....  cost for shipping.

And as the White Knight said-- 'the name of the song is called"

Free Shipping means there is no number in the line for shipping cost.

Instead the seller includes her shipping cost (and her insurance cost and her packaging cost and her procurement cost and her eBay and Paypal fees) in the asking price for the item.

Any discounts she decides to give would be based on how much a multiple (or international) sale will save her in those costs.

The shipping line still would say $0.00.

Which is Free Shipping.

[cumos55]

One has to be very careful with respect to the "legal" definition of free shipping.

There is this manufacturer of pillows...  has been doing a lot of advertising on TV.... who adjusted the price of his product... and then offered free shipping.as a part of his selling promotion

And this manufacturer of pillows ended up in court because of his improper use and advertising  of the wording   Free Shipping

If one advertises an item at $20 and a shipping cost of $10.

That item with TRUE free shipping is sold at $20....  The price of an item does not change with free shipping.

eBay has never, and will never define free shipping  because of the legal consequences of defining free shipping. as the cost of shipping included in the price of an item... .....This is how many sellers apply the concept of free shipping on eBay..

[dutchman48]

Not sure how this evoloved to a shipping discussion from GST, HST, and VAT, but why not just say shipping included?

[cumos55]

Included in the price of an item

GST... HST... VAT.... Shipping Cost.....

When a store advertises ... They say you will NOT be charged GST. when you buy something

Notice... the wording

But you still pay GST, .... because now it is included in the price.

Notice the wording.....  You will not be charged GST... but you will pay GST,

GST is then included in the price of the item sold .... on sale... There is no free GST

If a seller is registered  to collect GST/HST....  They must state how the buyer is charged GST/HST... That must be stated on an invoice  and with the business number.also included in the invoice.

On eBay  the statement should be....You will not be charged Postage... but ...  You do pay postage... because now postage is included in the price of the item being sold....

Using the correct word is important.....  

[momcqueen]

This is essentially my problem with the eBay term 'free shipping' on my listings. Shipping is never free, carriers don't come in the middle of the night with postage labels printed for free like the tooth fairy. Postage included. Free shipping leads buyers to think it's free, period.

[momcqueen]

But, yes, regardless of whether it's 'free postage' or 'taxes included' someone is paying for it.

[dutchman48]

Taxes are a little different. If tax is collected, it needs to be remitted. Whether it is in the price or added to the price is irrelevant.

In the case of VAT, that is a 17% markup and should not be included or collected from non VAT countries.

and neither should GST or HST for that matter