[LINK] GST and ISPs

[Adam Todd]

> > There is now WST saving for ISPs. IN fact there is an expected 8.5%
> > INCREASE on the Telstra costs alone, PLUS the GST.
>
>Umm..  isn't this 8.5% increase the GST itself?  Or are you suggesting that
>Telstra are increasing their prices by 8.5%, and then by a further 10% for
>GST (a total increase of almost 20%) ??  Somehow I find this a little hard
>to believe...

I've placed a call in to ask Telstra what they mean by an 8.5% increase.

I've been getting too many people asking why it's 8.5% and not 10%.

The GST is a bottom line of 10% on the TOTAL invoice cost.

An announcement that a service is to increase by 8.5% doesn't indicate 
whether that is GST inclusive or an increase on the current price before GST.

My best guess is that the bottom line on a July invoice will be 8.5% more 
than a the same June invoice, thus an INCREASE INCLUSIVE of GST of 8.5%.

But on that token, I have spoken to some industries where there will in 
fact be an increase on the Product price itself, BEFORE GST because of GST 
(a prepared food industry supplier.)

The ACCC has been contacted in relation to this instance and agreed that 
the increase on the product price before GST inclusion is acceptable.

Bottom line is the product itself will increase by around 12% INCLUDING GST.

It's probably a very rare case and may only affects this very specific 
instance (or particular manufacturing industry, which is quite small.)

I've even had copies of the numbers sent to me because I was very doubtful, 
but they seem to make sense.  The companies themselves will make no more 
return that before. (There is a slight margin for compliance, but it's 
negligible.)

But back to the original comment, I'm assuming that the 8.5% increase is 
8.5% on the current prices including GST, so in reality a price drop of 
1.5% at the real product price.

Some people have this very confused and only asking will get the correct 
answer.  I've had a number of ISPs who have high costs in administration 
(stationery, printing, etc) that didn't take into consideration the fact 
that paper, printing, inks, CDR's etc will in fact (hopefully) drop.

Problem is with the small business end of town, they won't know what the 
price REALLY is until 1 July when their orders come in through the door 
with an invoice.