Need a Advice in Buying a Car - Seller Wants Me to Pay GST on Top of Price Paid

BALLE BALLE on 03/06/2021 - 09:47
Last edited 03/06/2021 - 20:57 by 2 other users

Hi fellow OzBarginers,

I am about to purchase a car from Sydney private seller. I have already got it inspected and paid the whole amount.

Yesterday I asked him to transfer it under my company name but he told to me to pay a GST on top of agreed price as his car is also under his company name. Both of us were unaware of the situation earlier.

Can you someone please advise me what's the best can be done in this scenario ASAP?

TIA

All sorted thanks everyone. Seller agreed to transfer under my company name with no fuss.
Administration plz delete the post.

Automotive

closed Comments

  • oscargamer on 03/06/2021 - 09:55
    +6

    Pay GST and take the car or don't pay the GST and have an argument.

    You both didn't know about it, but the onus is on the buyer

  • mskeggs on 03/06/2021 - 10:11
    +4

    Are you registered for GST and able to claim GST inputs?

    • BALLE BALLE on 03/06/2021 - 10:42

      Yes, I am registered for GST but negotiated the price including the GST.

      • oscargamer on 03/06/2021 - 10:56
        +9

        That is different to what your post says.

        If the seller is changing the agreed price, either pay the new price or tell them to stick it.

        • BALLE BALLE on 03/06/2021 - 11:16
          -4

          I mean I negotiated according to my budget without letting him know that I am purchasing it in behalf of the company.

      • mskeggs on 03/06/2021 - 10:57
        +1

        Then advise that was your position, and you don’t want to proceed unless there is a discount.

      • Seraphin7 on 03/06/2021 - 11:13
        +2

        Yesterday I asked him to transfer it under my company name but he told to me to pay a GST on top of agreed price as his car is also under his company name. Both of us were unaware of the situation earlier.

        Then you clearly did not explicitly negotiate a price including GST.

        What documentation do you have to indicate an agreement between the parties that the amount you have already handed over is the total price to be paid? At least with this you'll have some claim that price is the total and includes any GST that might be payable.

        • BALLE BALLE on 03/06/2021 - 11:17

          I have a email from him on agreed price which doesn't states anything regarding GST.

          • CrowReally on 03/06/2021 - 11:45
            +3

            @BALLE BALLE: Regardless of how well the agreement was worded, look at both of your intentions.

            If you previously agreed the end result would be you would have $35,000 less cash [and now have a car] and he would have $35,000 cash [and no car], then you should be willing to add GST on.

            You pay $38,500 to him, but get $3,500 back on your next BAS - there's your $35,000.
            He receives $38,500, but pays $3,500 on his next BAS - there's his $35,000.

            If your "budget" was "I'm paying $35,000 because I know I'm about to get $3,181 cash back from the BAS, so the car really only costs me $31,819 all up" then you're going to have to stick to your guns and fight it out over whatever the wording is, and whether there's a binding agreement on the GST part.

            (This presumes 100% business use so full entitlement to GST, adjust logic and figures to match underlying sitch as required)

            • Soluble on 03/06/2021 - 11:49

              @CrowReally: But how was OP going to claim GST on a used car that had no GST Inc receipt/invoice?

              Just going to claim the GST that was never paid in the first place?

              Prior to the GST dispute OP was literally buying a car from a private seller, so no GST.

              • CrowReally on 03/06/2021 - 11:51

                @Soluble: The car is registered in the company name of the seller - so it would be the one selling it, right? If it's registered for GST, there's the tax invoice.

                • Soluble on 03/06/2021 - 11:52

                  @CrowReally: From OP:
                  Both of us were unaware of the situation earlier.

                  Also, wouldn't OP have been sent an invoice to pay which showed the GST before sending $35,000.

                  • CrowReally on 03/06/2021 - 11:55

                    @Soluble: Whether they were thinking about GST or not, the legal owner of the car and whether it's registered for GST is a matter of fact.

                    Sloppy paperwork requiring a wire transfer of cash isn't impossible. It's likely the correct invoice doesn't even exist yet.

                    As to what they have actually agreed on and what the invoice must reflect, that's what's getting pinned down now.

            • BALLE BALLE on 03/06/2021 - 11:56
              +1

              @CrowReally: Thanks for the advice Crowreally.

  • pharkurnell on 03/06/2021 - 10:15
    +3

    Sounds like manure to me…

  • iNeed2Pee on 03/06/2021 - 10:18
    +1

    Tell them that wasn't agreed in the price he quoted, and as you have already paid for the whole amount, you can not pay anymore.

    If he doesn't like that, get him to refund you the full amount you have payed. See what he says

    • BALLE BALLE on 03/06/2021 - 10:43

      Thanks I have already asked and he refused to refund my money.

      • pharkurnell on 03/06/2021 - 11:02
        +4

        How can he?

        You both agreed on a price, you paid that price, now he wants to bend you over and not even say thank you?

        Gee, Im going to sell my car and keep upping the price till I own the buyers house.. Might create a blog and call it Red paperclip.

      • iNeed2Pee on 03/06/2021 - 11:29

        Really?

        How much more is the GST?

        I would be livid if that money wasn't returned to me. Totally agree with @pharkurnell

      • [Deactivated] on 03/06/2021 - 12:50
        +1

        Well , you know what to do OP

        You know where he lives , hes just made an expensive mistake.

        Feel free to take out the "GST portion" from his home or other vehicles in whichever way suits you best.

  • Drakesy on 03/06/2021 - 10:27
    -6

    If it's a private sale (not through a dealer) the car isn't subject to GST.
    If it's through a dealer then unfortunately it is subject to GST.

    Is the guy's company a secondhand car dealership?

    • Baysew on 03/06/2021 - 10:31

      Disposing of a motor vehicle

      You generally have to account for GST when you dispose of a motor vehicle if the disposal is a taxable sale. This applies even if the vehicle was purchased before 1 July 2000 or the vehicle is sold to an individual who is not in business (a private sale). You will generally be liable to pay GST of one-eleventh of the sale price of the vehicle.

      GST is not payable on the disposal of privately owned assets. For example, a sole trader selling a motor vehicle which has not been used for business purposes and on which no GST credit has previously been claimed should not include GST in the sale price.

      • Drakesy on 03/06/2021 - 10:35
        +2

        I'd tell him to go jump and take the GST out of the car's price rather than forcing you to pay it on top of the agreed value.
        Unless you're really sold on the car.

        • Baysew on 03/06/2021 - 10:45
          +3

          The seller got the benefit of being able to offset GST on the original purchase of the MV (which would be a much higher amount). The buyer has actually paid the agreed price. A bit rich expecting the buyer to now pay sellers GST after the deal has been struck.

        • BALLE BALLE on 03/06/2021 - 10:45

          I tried and he is not interested. I liked only the colour otherwise I can buy bit cheaper here in Melbourne.

          • Drakesy on 03/06/2021 - 11:02

            @BALLE BALLE: Unfortunately it's a seller's market for cars, i wouldn't get caught up on it. Covid tax will dissipate late this year.
            There'll be some other unfortunate soul who'll take the sob story.

  • freefall101 on 03/06/2021 - 10:46

    GST was chargeable whether you were putting it under your business name or not, sounds like they found that out and decided they could bullshit you by going "oh, it's to your business? Uh, GST".

    If you can claim the GST back I'd just go with that, if you were buying it personally I would have told him to go jump.

  • bobbified on 03/06/2021 - 10:48

    I have already got it inspected and paid the whole amount.
    Both of us were unaware of the situation earlier.

    If you hadn't already paid you can tell him to get stuffed, but because you have already paid the whole amount, I'd say it's in your interests to get this resolved quickly. If it really was a mistake on both ends, perhaps go 50/50 on the additional costs.

  • Baysew on 03/06/2021 - 10:55
    -1

    How much is the car? (And what colour?)

    As bobbified says maybe negotiate 50/50 on the additional costs. (And you are still offsetting total GST)

    • BALLE BALLE on 03/06/2021 - 11:19

      Car is around $35k and in rare Tango red.

      • spackbace on 03/06/2021 - 11:26
        +3

        Buying an Audi from another state… what could possibly go wrong

        • pegaxs on 03/06/2021 - 13:22
          +2

          Buying an Audi from another state… what could possibly go wrong

          FTFY…

  • geekcohen on 03/06/2021 - 10:59
    +2

    How much is the car? (And what colour?)

    Whats that got to do with anything?

    • oscargamer on 03/06/2021 - 11:08
      +1

      What's love got to do, got to do with it?

    • Baysew on 03/06/2021 - 11:14

      I liked only the colour otherwise I can buy bit cheaper here in Melbourne.

      OP is buying at a higher price interstate, with all the extra problems that involves, based on colour. I'd like to know what the colour is.

      Knowing how much the car is can then determine if it is worth while to try to enforce the contract with the seller or make some other arrangement.

  • ddhar on 03/06/2021 - 11:34
    +3

    Bikies

    • Euphemistic on 03/06/2021 - 13:27

      Does your wife approve of bikies? You may not be allowed to get bikies.

  • spal on 03/06/2021 - 11:59

    I hope that you are not being scammed. If the seller is not willing to back down, I can understand. But refusing to return your money in a sellers market, it doesn't pass the smell test.

  • plmko on 03/06/2021 - 12:29

    The seller is correct. Business to business is always excluding GST.

    • apu on 03/06/2021 - 12:33

      This is correct in B2B sales. I agree.

      Can't you just claim the GST amount back? Or is this not a genuine business purchase?

  • Sterio on 03/06/2021 - 13:38
    +2

    I have sold plenty of company vehicles. The sale price (your purchase price), regardless of whether you are a private buyer or and ABN holder, is inclusive of gst. So for the seller hitting you for another 10% is codswallop.

  • knasty on 03/06/2021 - 14:39
    +1

    This may help, particularly the bottom half:

    https://lawpath.com.au/blog/do-you-have-to-specify-gst-on-a-…

  • epoch on 03/06/2021 - 14:53

    Maybe spend 100$ on a 15min call with a tax agent who will give you what you need re needing to pay GST or not and get it in a letter from them if favourable for maybe a little more.

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