Subject:
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Re: bizarre changes to postage stamps due to GST
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Newsgroups:
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lugnet.loc.au
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Date:
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Fri, 9 Feb 2001 04:48:10 GMT
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Viewed:
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428 times
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> Ummm... Aren't these one and the same? The stamp is just a small bit of
> sticky paper, and not worth 45 cents. It's just a receipt stating that
> you've made payment for the service of delivering that letter.
I agree it's a fine line but you have put your finger on the nub of the
problem: a stamp is a receipt.
If GST was charged on the service and not on the stamps, then buying a stamp
would simply be a receipt fo advanced payment received by Australia Post.
The GST or GST-exempt-ness would then be factored into the price of the
service, and so you could use the same stamps for both domestic and
international mail.
Indeed, this "receipt of payment" philosophy has been used by Australia Post
in the past. For example, when the standard letter rate rises in Australia
(e.g. from 40c to 45c), you cannot go on using 40c stamps to post letters
even though those stamps may have been purchased when the rate for posting a
letter was only 40c. In that situation, Australia Post has always argued
that your purchase of a stamp was NOT the purchase of the service of posting
a domestic letter, but merely the exchange of money into 'credit' of the
same value.
So, if one follows the line of argument used by Australia Post in the past,
my purchase of a stamp is simply a receipt for the money I have paid; there
is no service associated with the stamp. That is, in GST terms, it is a
financial transaction and hence should be GST-exempt. GST should only be
payable (by Australia Post) when that stamp is actually used to send a
domestic letter.
However, what this means is that Australia Post has to look at the
destination of each letter sent, and then for domestic letters, give 10% of
that postage for GST. Clearly this is a much harder accounting problem than
just incorporating GST into the purchase of the stamps. So, it does not
surprise me that Australia Post did what they did.
Similarly, some people buy stamps not for the purchase of posting letters,
e.g. stamp collectors. These people are buying goods, as opposed to getting
receipts, so if Australia Post did the "right thing" w.r.t. GST, you would
have the equally bizarre situation of stamps-as-goods attracting GST at
point of sale while stamps-as-future-service would not attract GST payment
until they were used. So you would have to declare your stamp-buying
intentions at the point of sale :-) Another reason no doubt why Australia
Post did what they did.
I suspect other pre-paid services like bus tickets etc probably have the
same GST-on-goods versus GST-on-services dilemma, and I suspect most of them
will be solving it in much the same way.
Isn't GST simple? :-)
Kerry
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Message has 2 Replies:
 | | Re: bizarre changes to postage stamps due to GST
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| More on this international/domestic stamp thing: There was a changeover period which expires about now, where you could freely interchange International and Domestic stamps without penalty. This has been extended for another month or so. Then it all (...) (24 years ago, 15-Feb-01, to lugnet.loc.au)
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Message is in Reply To:
| | Re: bizarre changes to postage stamps due to GST
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| From: "Kerry Raymond" <kerry@dstc.edu.au> (...) Ummm... Aren't these one and the same? The stamp is just a small bit of sticky paper, and not worth 45 cents. It's just a receipt stating that you've made payment for the service of delivering that (...) (24 years ago, 8-Feb-01, to lugnet.loc.au)
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