GST and Buyers
Since Saturday 1st July 2000, the Goods and Services Tax ("GST") has been in effect.
This document has been written to assist you in understanding how the GST may affect your auction purchases. This is intended as a guide only, for further clarification on the GST and its effect on you, please contact the Australian Taxation Office.
Does the knockdown price include GST?
Auctions may be conducted on either a GST 'inclusive' or an 'exclusive' basis. This will depend on the type of auction being held and will be stated in the auction catalogues.
GST 'inclusive' ( of the hammer price )auctions have the GST included in the 'hammer' price.
Example: Hammer Price = $100 + Buyers Premium (10%) = $110 (including GST)
GST 'exclusive' ( of the hammer price ) auctions have the GST added to the 'hammer' price.
Example: Hammer Price = $100 + Buyers Premium (10%) + GST (10%) = $121(including GST)
When does GST apply?
Whether GST is applicable on the sale will depend on the status of the vendor. A registered vendor will be required to charge GST regardless of the status of the purchaser. An unregistered vendor will not be required to charge GST.
It is to be noted that if the vendor is registered for GST, all items sold on their behalf will have GST apply.
GST registered vendors are noted in the printed auction catalogues and on your invoice with a (*).
Is GST charged on the buyer's Premium?
GST 'inclusive' auctions will include GST in the buyer's premium. GST 'exclusive' auctions have GST added to the buyer's premium.
I am going to re-sell the item I bought at auction, can I claim back the GST I have paid?
Your GST Status will determine whether you will be able to claim an input tax credit for any GST charged on the supply of the item. A registered purchaser may be entitled to a full input tax credit on goods purchased from both registered and unregistered suppliers due to the special provisions relating to second hand goods.
The input tax credit is able to be claimed by the purchaser as follows:
If the payment is more than $300 the credit cannot be claimed until the purchaser subsequently sells the second hand goods and charges GST on the sale. In this circumstance, the credit is also attributed to the period in which payment (or part thereof) was received, or when a tax invoice was issued, whichever is the earlier. The input tax credit is 1/11th of the amount paid for the second hand goods.
Can I claim back the GST I paid at auction?
If a registered purchaser pays GST on goods and services acquired for their business enterprise, they will generally be entitled to an input tax credit. Please consult your tax advisor for further information on input tax credits.
Are second hand items be subject to GST?
Yes, any vendor that is registered, or required to be registered, will be required to charge GST on the supply of the second hand (used) items.