Australia GST on Freight

Natureshop
Tourist
4 0 1

In Australia GST is charged on freight irrespective of whether the goods sold are GST free . The only exception of this method is where there is only one freight method offered. We have noticed a flaw in Shopify recently (Feb 2021) where it stopped charging  GST on freight if there is a GST free item sold. 

 

Could someone please advice if you have an similar issue or how did you go about solving it or the ATO ruling on it that sets Shopify behaviour.

We have raised it with Shopify tech support over 2 weeks back and the stock answer is that the team is very busy to respond .

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Natureshop
Tourist
4 0 1

Could anyone assist in how Shopify works out GST payable based on this order in our cart . The GST rate is 10% and all the figures shown are x-GST

Item A (GST Free)  Value $5.75

Item B(GST Applies) Value $81.90

Total Order Value = $87.65

Freight (GST applies) = $15.30

GST (Shopify calculation) = $9.41

Total Order Value (incl of GST and Freight) = $112.36

Shopify seems to be apportioning the GST on freight based on the proportion of the value of the items for which GST applies ...however I just cannot get how they arrive at this number

 

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Pam_Honey
New Member
1 0 0

Hi,

Yes I have noticed that there is either no GST be charged on freight or the wrong rate of gst is charged, yet some are charged the correct rate of 10%.  

I'm not sure how this is fixed.

 

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Natureshop
Tourist
4 0 1

Hi - I have a incident opened with Shopify for over 2 months now and chatting with their support team, it has reached the tax specialists Q ... so probably in a couple of months , a response will hopefully be obtained. The difficulty is that in some cases the GST paid value is erroneous and Shopify under bills the transaction which then cannot be reconciled with the accounting package we use.  Its a problem ..

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Handsonworkshop
New Member
3 0 0

Hi Natureshop,

We have the same issue with our orders. We tried setting up a Tax Overrides (only for Australia) for the shipping fee and also for all of our product collections.
It used to be fine and now I’m getting miscalculations. We’re going around in circles….and orders are coming under-charging for GST.

How did you go about solving it? 

I can’t seem to get it answered by the Shopify help desk.

Thanks!

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Natureshop
Tourist
4 0 1
There was absolutely no response from Shopify which is a learning for us
going forward. We use MYOB at the backend and their solution was a manual
work around . Essentially speaking, interpreting the ATO stance on GST on
freight on a single invoice that carries GST and non GST items,has not been
implemented transparently in both Shopify and MYOB.

To solve the issue - we changed all our prices and freight to GST inclusive
and setup Shopify to not calculate tax/GST. We send tax invoices via MYOB
that show the GST amount.
StrikeHold
New Member
2 0 0

Thank you Natureshop for sharing. Having the exact same issue. I am hoping we can do the same work-around with Xero.

 

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Handsonworkshop
New Member
3 0 0


Hi Natureshop,

I hope a person who finds this forum help sold their problem with wrong GST.

After our 3rd time contacting the support, we find the solution to this problem and it is just putting a checkmark "Charge tax on this product" on each product.  
I just paste below the email from the support:

I hope this message finds you well. I just wanted to do a follow up email regarding your concern with the miscalculation with the GST.

I raised the concern to our Tax Supports and was told that the reason it's not properly collecting the taxes is because the "Charge tax on this product" for the products are not checked. Since you are not collecting any taxes on other countries, we would like to suggest to check this on the product and it will not charge any tax for the countries that you are not collecting taxes at.

If the item is not checked to charge tax then the item will not be charged tax. Only shipping will.

To do the bulk change to all the product you can refer to this article message from the Support:

There are two ways, we can do this (bulk edit).

The first, is by checking the box for select products. After that click Edit Products and you should see Add Fields.

Handsonworkshop_0-1624524287626.png

 

The other option is, by using product CSV file. You can export your product's CSV file then edit and marked it as TRUE under the Variant Taxable column then import it to the store. To learn more, please see help guide below for Using CSV file.

Just out of topic, I would like to let you know that there was a recent update with the Facebook Sales Channel and for some reason it have disconnected almost all of the Facebook account of our merchants. To continue selling on Facebook please do update the channel by clicking the Update Sales Channel and reconnect your account to make sure your products are always sync.

Handsonworkshop_1-1624524287525.png



I hope this will help you. 

 

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StrikeHold
New Member
2 0 0

Hi Handsonworkshop

We already have "Charge tax on this product" on each product checked.

The site works correctly if GST is shown at check out but the website cannot show GST inclusive prices as the shipping does not then add the GST at the end.

Thank you for sharing.

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