PPRuNe Forums

Go Back   PPRuNe Forums > PPRuNe Worldwide > The Pacific: General Aviation & Questions
Forgotten your Username/Password?

The Pacific: General Aviation & Questions The place for students, instructors and charter guys in Oz, NZ and the rest of Oceania.


Closed Thread
 
Thread Tools
Old 27th Dec 2002, 01:12   #1 (permalink)
 
Join Date: Feb 2000
Location: Vic
Age: 46
Posts: 364
Prices - GST Inclusive or Exclusive

To settle an argument,

I was lead to believe that one of the conditions set by the Democrats for passing the GST enabling legislation was that all prices quoted had to be GST Inclusive.........thats is the price on the lable is what I paid to get the good or service.

I have had some friends caught out with flying schools laely who are saying this flight is x dollars...........then oh + GST. I thought this was illegal.

Are there any GST or Tax gurus out there who can shed some light on it.
Ozgrade3 is offline  
Old 27th Dec 2002, 01:35   #2 (permalink)
 
Join Date: Mar 2000
Location: North son, I say go North..........
Posts: 599
I am assuming that it is quoting a price + GST is ok, as several operators up here do it. Gotta be careful, I cross hired a plane and assumed it was GST inclusive... until the bill........

Frankly I cannot see the point why not just advertise your price? Your client doesn't have to be Einstein to work out the GST component if they are to lazy to look at the invoice.

Must say though i'm not sure on the legislation as we include GST...
High Altitude is offline  
Old 27th Dec 2002, 02:37   #3 (permalink)
 
Join Date: Mar 2001
Location: Dunnunda & Godzone
Age: 64
Posts: 4,280
As far as I understand it, ALL prices must be quoted INCLUSIVE of GST no exceptions.

The GST component, must be shown as a separate item in the total.

That then is the amount that you can use in your Business Activity Statement as a input credit if you are able to claim it as such.

It's really simple.

Any one doing it any other way is probably illegal and/or pulling a shonk.
Woomera is offline  
Old 27th Dec 2002, 19:57   #4 (permalink)
 
Join Date: Dec 1999
Location: brisbane, australia
Posts: 218
GST on training

I believe part of the problem for training operations is that CPL training is GST free, whilst all other flying incurs the GST. If that's how it is, they are in a sticky situation - put on the GST inclusive price and lose a CPL or two - or use 'plus GST' pricing and annoy all other punters.
Whaddya do?
huntsman is offline  
Old 27th Dec 2002, 20:49   #5 (permalink)
 
Join Date: Jan 1999
Location: Queensland
Posts: 2,300
Woomera

I'm sure you are correct, however how do the airlines get away with advertising net fares, then pricing and selling the ticket with additional GST, AN tax, etc etc etc?
Torres is offline  
Old 27th Dec 2002, 21:24   #6 (permalink)
 
Join Date: Dec 2002
Location: Queensland,Australia
Posts: 42
Thats not quite right Woomera,have a look in the Net and u will
see that the prices quoted for Airline tickets incl all taxes however they are not specified.

Sorry Reference to Torres not Woomera.
clearone is offline  
Old 27th Dec 2002, 23:08   #7 (permalink)
 
Join Date: Nov 2000
Location: Salt Lake City Utah
Posts: 2,498
Fundamentals:

1. GST is a supplier liability. If a person hires an aircraft to you or sells you a seat on an aircraft, and the person is or is required to be registered for GST, that person is liable to pay GST on the value of the supply of the aircraft under the contract of hire or on the value of the supply of the seat on the aircraft.

2. The corollary of 1 is that the recipient of a taxable supply – i.e. the person who takes the aircraft on hire or who buys the seat on the aircraft - is never liable to pay GST on the hire or on the seat. (There are some very rare circumstances, involving imports, in which the parties can reverse charge GST).

3. The source of your obligation to pay for something today, and the way in which you work out how much you are obliged to pay, are in principle exactly the same as before GST was invented: what did the contract between you and the supplier say you had to pay?

4. An effect of the GST law is that if a contract between the supplier and the recipient says nothing about GST, the price is taken to be GST inclusive. i.e. An amount equivalent to the supplier’s GST liability is already built into the price. (I think this is the point alluded to by earlier posts.) E.g. ABC Aviation offers an aircraft to you at “$220 per hour wet”. Nothing is said about GST. You use the aircraft for 2 hours. You have a contractual obligation to pay ABC $440 and no more. ABC has an obligation under the GST law to send $40 to the tax man.

5. A ‘GST exclusive’ price is in law a contract that says the recipient of the supply has an obligation to pay the supplier a specified amount plus an amount equivalent to the supplier’s GST liability (remember point 1). The amount you pay is still determined by what the contract says. You still have no liability to pay GST (remember point 2).

6. There is no right under the GST law, or any other law, for a supplier to change a contract after it is made, by adding 10% to the price.

So: Make sure the terms of your contract – oral or otherwise – are clear before you enter the contract. If GST is not mentioned, the contract price is in law GST inclusive. The supplier has no right unilaterally to change the price after the contract is made, by, for example, adding 10% to the agreed price. A supplier may in effect offer a GST-exclusive price by saying the contract price is $X plus an amount equivalent to the supplier’s GST liability on $X. But GST-exclusive only works if those are the express terms of the contract (oral or otherwise).

By the way, I have become aware of a practice among some flying schools to offer flying training for a commercial licence at two different prices, depending upon whether the training attracts GST. (flying training for a commercial licence is in some circumstances GST-free education, but the same training in other circumstances – say the pilot is just doing the training for self-improvement – attracts GST). These schools apparently charge a higher amount for the GST-free training than the GST-exclusive amount charged for the training that attracts GST. A charging regime that would be tough to justify to the tax man and the ACCC, methinks.
Creampuff is online now  
Old 27th Dec 2002, 23:34   #8 (permalink)
 
Join Date: Jul 2002
Location: Melbourne
Posts: 66
Spoken like a true lawyer creampuff

How about we use some common sense and when asking for the hourly rate on the aircraft say “Does that include GST?”
Wagit is offline  
Old 28th Dec 2002, 00:32   #9 (permalink)
 
Join Date: Apr 2001
Location: Camden, NSW, Australia
Posts: 273
It is indeed hard to please everyone.
We advertise all our prices as exclusive GST, GST and inclusive GST. Some customers tell me "what is all this crap, just tell me how much I have to pay". We have a private tax ruling (which by now is presumably public) that states; The integrated 150 hour CPL course is GST free. The 200 CPL incurs GST. The Grade 3 Instructor Rating is GST free. The G2 and G1 incur GST. And yes, the GST exclusive price is the same for everyone regardless of whether GST is added or not.
I Fly is offline  
Old 28th Dec 2002, 07:36   #10 (permalink)
 
Join Date: Nov 2000
Location: Salt Lake City Utah
Posts: 2,498
I fly: It is hard to please everyone. What one person demonstrates as silly, another considers common sense.

BTW: Good to see that you are not one of those who are engaging in the questionable practice of charging different ex-GST prices depending upon whether the training is or is not GST-free.
Creampuff is online now  
Old 29th Dec 2002, 08:23   #11 (permalink)
 
Join Date: Mar 2001
Location: Perth
Posts: 839
is/was not it the case that ITEM 61 of the taxation "thing", stated all services and supplies to commercial aviation operations are tax exempt, has this changed.

my understanding is that to do yourself a CPL is totally GST free, another example in the past i purchased myself a wizz wheel at concept, BK, these were tax free for cpl holders, but taxed for gliders, ultra-light pilots, does anyone have the ATOs decision in writing ???.
Lefthanded_Rock_Thrower is offline  
Old 29th Dec 2002, 09:47   #12 (permalink)

I don't want to be the best pilot in the world - Just the oldest
 
Join Date: Jun 2001
Location: Here and there
Posts: 1,028
LRT,
The purchase of a whizz wheel should have incurred GST, regardless of whether it was sold to a CPL holder or glider/ultralight pilot. I do not have a copy of the ruling available but read it a couple of times and it still confuses me. The guiding rule as to whether GST is or is not charged is governed by whether the training is something that a normal pilot can use. So in this case I'd suggest that a flight computer must attract GST as it is something that is not peculiar to CPL training.

I Fly,
Quote:
The integrated 150 hour CPL course is GST free. The 200 CPL incurs GST
Not entirely correct. The elements of training undertaken by a pilot to obtain a PPL and subsequent hour building towards a CPL is subject to GST. However, the training being undertaken specifically towards training and testing for a CPL is GST free. This one is being rorted left right and centre by more than one training organisation I know of. Convincing the nieve pilot to sign up for an integrated (150hr) CPL course and telling them that if they don't finish it, they will get a PPL
Islander Jock is offline  
Old 29th Dec 2002, 10:45   #13 (permalink)

Don Quixote Impersonator
 
Join Date: Jul 1999
Location: Australia
Age: 67
Posts: 3,397
Hmmmm

How does it go again,

"There are things that we know we know, there are things that we know we don't know, there are things that we don't know that we know and things that we don't know that we don't know........"

Dr Hewson on the GST??? and cakes or was it Michael Carmody on it's implementation?

Like the 10% Sales Tax that basically finished off the new aircraft sales business in OZ, it was simply a matter of finding an ATO Office that gave you the "correct" ruling.
As far as I am aware they only collected it on one (1) aircraft over the course of some years before it as repealed, and that was because Alan Bonk took his Corporate Jet to Hong Kong on a business trip.
Wait for it, wait for it, the purchase of an aircraft for business purposes was exempt of the 10% tax, unless of course you used it for travel outside of the country on business.
Whilst I was never one to applaud Mr Bonks business methods, it was just another of the lunatic Govt tax rip offs, that the GST was supposed to replace, i.e. until the lunatic Democrats got their hands on it.

BTW where are they now???
gaunty is offline  
Old 29th Dec 2002, 20:15   #14 (permalink)
 
Join Date: Dec 2001
Location: Brisvegas
Posts: 1,778
Here is the link for those who are interested in the actual situation rather than what a mate down the pub told them about a friend who....

http://law.ato.gov.au/atolaw/view.ht.../NAT/ATO/00001

An interesting question is what happens when a person who agreed to commence a 150 hour integrated (yeah right) course and so is GST exempt then neglects to go beyond a PPL? How long until they have ceased training? Do they have a GST liability or does the supplier?
Icarus2001 is offline  
Old 29th Dec 2002, 22:44   #15 (permalink)
 
Join Date: Apr 2001
Location: Camden, NSW, Australia
Posts: 273
Islander Jock, You might be right. I was only referring to what MY private Tax ruling says. I also understand that if the school is a RTO then all registered courses are GST free. Exactly the same as TAFE and Universities. If you don't finish your University course, do you have to pay the GST retrospectively??
I Fly is offline  
Old 30th Dec 2002, 06:09   #16 (permalink)
 
Join Date: Mar 2001
Location: Perth
Posts: 839
Icarus2001,

ask and you shall receive, cheers

LHRT
Lefthanded_Rock_Thrower is offline  
Old 3rd Jan 2003, 03:39   #17 (permalink)
 
Join Date: Mar 2001
Location: Perth
Posts: 839
Icaruus2001,

Whats the deal for smelicopter pilots, are they tax exempt ?.
Lefthanded_Rock_Thrower is offline  
Old 7th Jan 2003, 09:59   #18 (permalink)
 
Join Date: Mar 2001
Location: Perth
Posts: 839
Have spoken to the ATO, Kerry Stewart on 03 9215 3709. as per the ATO any commercial flight training undertaken IAW the relevant day vfr syllabus for the exclusive purposes of obtaining a Trade, Profession ETC ETC for the purposes of entering a profession, is GST free.
Lefthanded_Rock_Thrower is offline  
Old 8th Jan 2003, 01:06   #19 (permalink)
 
Join Date: May 2002
Location: Illawarra
Posts: 67
Red face WHAT A HORNETS NEST?!

I have a private ruling concerning GST and training.
It clearly states that training for the issue of the CPL is GST free. If a person is prepared to indicate that they are training toward the issue of a cpl, then no GST is applicable, INCLUDING the issue of the PPL and GFPT on the way towards CPL.
Should a person stop training, FOR ANY REASON, then NO GST is applied for the training conducted thus far as long as it can be demonstrated that they INTENDED to carry out training towards the issue of the CPL initially.
In other words, if bloggs decides half way through their training that this is not for me or that they ran out of money (more likely), or they got married or whatever, then the training conducted thus far remains GST free.
If bloggs started off intending to do only a PPL licence (GST inclusive) but then opted at a later date to continue on to CPL, then only that training towards the CPL FROM HIS DECISION TO DO CPL is GST free.
Get's confusing?
THREEGREENS is offline  
Old 8th Jan 2003, 04:21   #20 (permalink)

I don't want to be the best pilot in the world - Just the oldest
 
Join Date: Jun 2001
Location: Here and there
Posts: 1,028
Quote:
as long as it can be demonstrated that they INTENDED to carry out training towards the issue of the CPL initially.


If a person commences the 150hour CPL integrated course then no GST is payable but under that system, as far as I am aware you do not receive credits for a PPL. If a person already has a PPL then the specific training for CPL is GST Free.

If the ATO are giving out conflicting rulings what chance do the flying schools have?
Islander Jock is offline  
Closed Thread
 
 
 


Thread Tools


Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off



All times are GMT. The time now is 23:34.


vBulletin® v3.8.7, Copyright ©2000-2014, vBulletin Solutions, Inc.
SEO by vBSEO 3.6.1
© 1996-2012 The Professional Pilots Rumour Network