These concerns came about because some sellers were adding GST to the final price of an item which could be considered misleading and deceptive conduct and accordingly in breach of consumer protection laws.

We’ve been taking on board your feedback and wanted to provide you with some additional information that we hope is of assistance to you.

Under the modified policy, sellers who are required to be registered for and charge GST must include the GST component in the final price of the item, meaning that they must not add the additional 10% on account of GST after the buyer has won the auction or purchased the item using Buy It Now. Accordingly, for sales covered by this Policy, 1/11th of the final price of the item is considered to be the GST component.

As an example:

Final price at Auction End = $11.00
1/11th of $11.00 = $1.00

In this example the seller must set aside $1.00 out of the final price of the item for GST.

Some of you have asked about the ACCC’s role in relation to the modification. eBay works closely with regulators both in Australia and throughout the world to help ensure the best possible trading experience for the eBay community, and this Policy modification is no exception.

The ACCC is a national law enforcement agency in Australia which enforces consumer protection and fair trading laws, and promotes competition in the marketplace. Among the areas it administers, the ACCC aims to ensure that consumers are not mislead or deceived as to the final prices and true costs of items. The ACCC has published several guides on GST-inclusive pricing, and have provided examples of what is considered acceptable practice. As an example, the ACCC has said that stating “$125 + GST” or “$125 + 10% GST” is not acceptable and may possibly be in breach of consumer protection laws. Other industries are facing similar issues with respect to GST-inclusive pricing.

If you haven’t already seen the ACCC’s News Release with respect to the Policy modification, you can obtain a copy here: http://www.accc.gov.au/content/index.phtml/itemId/608311/fromItemId/2332

In the release, the Chairman of the ACCC Mr Graeme Samuel says:

"Once the ACCC contacted eBay in order to raise its concerns about GST exclusive pricing on the eBay Australia website, eBay offered to change its GST policy in order to provide certainty for all users of the website. The ACCC believes this outcome will reduce confusion for all eBay customers and ensure that eBay sellers are competing on equal terms".

We’re also pleased to let you know that we’ve added some additional information and FAQs in the GST Policy, in response to your feedback. Please refer here for an updated version of the Policy.

Remember, this policy only applies to sellers who are required to be registered for and charge GST. If you’re unsure whether you’re required to do this, please contact the Australian Tax Office (www.ato.gov.au) or your legal or tax adviser.

The policy will come into effect on Monday, 13 June 2005.

Thank you for your understanding, and please do continue to provide us with your feedback.