Just a timely warning if considering buying birthday gift cards to send on . Look for and read the small print before you buy .. Came across this one amongst a heap of card that don't incur a service charge Is this just adding the GST to Efpos Transactions
Hi Wombat. I guess at least they have printed the GST........I believe, but stand to be corrected by an Accountant or similar, that such "goods" attract GST so you either pay the $50 AND the GST due or that amount is taken off the value of the goods.
Most cards issued by the selling retailer, like Myers, Coles, Dan Murphy's etc absorb the GST as you can only use those cards in their shops and they are effectively giving you a discount.
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Cheers Bruce
The amazing things you see when nomading Australia
You see, that card is not a "gift card", even though is says 'the perfect gift card'. It is in fact a prepaid credit card and a such they are charging you $5.95 to purchase it. Prepaid credit cards are for more rewarding to the recipient that a gift card that locks you into buying from that chain of stores. With a prepaid credit card you can spend it on whatever you want, anywhere you want, even over the internet, wherever there is an EFTPOS facility.
You have been able to buy prepaid credit cards for many years now and almost every prepaid credit card is charged for. They became so endemic that the banks dropped their own branded prepaid cards and left it to the likes of Australia Post and the large chain stores, however, whilst the card may be branded by the seller, you can in fact spend it anywhere.
The $5.95 sale component does indeed attract GST and in complying with GST law the GST is included in the sale price.
The amount you top up the card with is entirely up to you, however most brands have a $500 limit. As you are not actually purchasing anything, you are just swapping one negotiable instrument for another there is no GST on your credit amount. This is like going into the bank and asking them to swap a $100 bill into two $50 bills. You are simply depositing money into an account that you or the recipient of the gift will later withdraw and spend.
Financial institutions are not required to charge and collect GST on financial transactions such as this as it is just like you transferring money from your savings account to pay off your credit card debt. The GST will be charged on the goods and services you buy.
