WHOLESALE CAR PARTS : The current price for parts is plus 22% WST, which the wholesalercollects for the ATO. So the same price plus 10% GST is in fact a 10%(approx) reduction in the current price to the retailer. Obviouslythere will be additional cost savings to both wholesaler and retailer,but I'm not aware of any pressure to pass them on - competition is theultimate driving force for that. Also many retailers currently markup the WST, but there's no excuse to mark up GST since, unlike WST,they claim it back.What the government says is illegal, and where the pressure is beingapplied, is increasing prices by more than 10% for goods which arecurrently WST exempt. Perhaps you're forgetting that the retailerclaims back the 10% GST he's paid to the wholesaler, so the consumershould ultimately only pay an additional 10% absolute maximum foritems currently exempt.
WHOLESALE CAR PARTS : I've just converted my own business software, which was overdue forupgrade anyway. Cost was $175, for which the government has alreadygiven me a grant of $200. Took me a day to set up and test it, so nowI can't wait for July 1 when the benefits start rolling in. I'mparticularly looking forward to my next new car at 9% _below_ theprice after GST(1/11th), as well as the 9% reduction in petrol priceswhen I claim back my GST credit. Not to mention parts, tyres, etc.GST is a retail tax. applied by the retailer to the retail price, for theATO.The retailer previously paid 22% WST on top of the wholesale price when theypurchasedproducts from the wholesaler.So under the GST the retailer buys his products from the wholesaler tax free(22% WST is removed) and applies 10% to the retail price, which means hismarkup will affect the amount of tax, where with a WST the markup had noeffect on the amount of tax.
WHOLESALE CAR PARTS : So if the markup is less than 100%, the consumer should now be paying less,any markup over about 120% and the retail price will be higher with GST, soeven if the retailer passes on his savings, in some cases the GTS more thangobbles up those savings!Under GST the retailer will pay wholesale + GST. The GST portion isthen claimed back as a credit against the 10% the retailer collectsafter his mark up. In fact the process starts at the producer of theraw materials used in manufacture.Currently the retailer's mark up doesn't affect the WST portion thatthe government collects, but the WST still gets marked up through tothe retail price since the retailer's mark up will take into accountthe price he's paid (wholesale + WST). The alternative calculationsused by the retailer to calculate his selling price are...(wholesale + A%) + WST or (wholesale + WST) + B%, with A being largerthan B.
WHOLESALE CAR PARTS : If the retailer previously applied his mark up directly to wholesale +WST, as many do, then the % saving to the consumer under GST will beexactly the same whatever the mark up. Unless the retailer decides toincrease his mark up after the commencement of GST - which is what theACCC will be most interested to hear about.This probably isn't the place for such a discussing.. but hey!!!Under GST, wholesale tax or what most people call 'sales tax', isabolished!!, therefore as long as the retailer is a registed business,he can buy his products from the wholesaler tax free!!, where previouslyhe had to pay wholesale tax, because wholesale tax is applied to thewholesale price.Under GST, there is no wholesale tax, but GST is added on to the retailprice by the retailer, if the retailer has to source parts fromsomewhere other than their normal supplier, and pays GST, he can claimthat GST back as long as he can prove he charged GST when he sold theproduct. Now under GST, products are cheaper for the retailer to buyfrom the wholesaler(no tax), so they should pass that exact amount on tothe consumer.. before GST!!!Once GST is added, the price may be cheaper, the same, or moreexpensive, than previously, depending on the retailers normal markup!
WHOLESALE CAR PARTS : On items that currenly incur no tax, but will incur a GST, the ticket orretail price will increse by exactly 10%Well, I don't presume to speak for your post but mine was right ontopic! ;-)I'm not sure what you're trying to say here, but be assured that GST_is_ paid at every point in the distribution chain.The retailer now pays wholesale + 22%WST. From July 1 he will paywholesale + 10% GST, irrespective of who his supplier is.The consumer now pays (wholesale + 22%WST) + mark up. From July 1 hewill pay (wholesale + markup) + 10% GST.Here's where you're totally wrong. So long as the retailer doesn'tincrease his present percentage mark up, then parts which now attractWST _must_ be cheaper.Let's assume Ned Kelly's Parts Emporium has a mark up of 150% on anitem that wholesales for $100...
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