"Advertised prices for goods and services to the public should include the Goods and Services Tax", ACCC Chairman, Professor Allan Fels, warned today. "Advertisers who fail to comply may find themselves in court.
"The ACCC GST Price Line [1300 302 502] continues to receive complaints about businesses not including GST in advertised prices. The services sector has a disproportionately high number of this type of complaint.
"Examples of concern have been menus in cafés, takeaway shops and restaurants, and advertisements for premium telephone information services that fail to disclose a GST-inclusive rate. Premium telephone services are those which use numbers starting with '190' (e.g. psychic lines, betting tips, chat lines).
"Not including the GST component means that consumers only receive part of the price information. Failing to make the total price to be paid clear in advertisements is likely to mislead consumers and breach the Trade Practices Act 1974.
"Businesses must remember that where a price is quoted, it must be clear to the consumer exactly how much he or she will be expected to pay.
"The ACCC does not want to see the United States situation develop where the price on the bill or at the cash register is different to that which was advertised. Full pricing has always been required under the Trade Practices Act and is not something that introduced with the New Tax System.
"Prices displayed or quoted to the general public should include GST. Simply stating that 10 per cent GST will be added to the price at time of payment may mislead consumers.
"A business may separately indicate the GST component of price, but it must not be done in a way which may mislead consumers as to the actual price to be paid. Similarly, a business may include a statement that the price includes GST, but there is no legal requirement to do so. Providing consumers with additional information as to the amount of GST in the price or stating that the price includes GST is a commercial decision.
"If a business chooses to indicate the two components of a price separately (i.e. the GST-exclusive price and the GST amount), then those components must be in close proximity to, and not given greater prominence than, the final GST-inclusive price.
"Penalties for breaches of this part of the Act range up to $200,000 for businesses and $40,000 for individuals, per offence. In addition to monetary penalties, the Court can impose injunctions and order corrective advertising".
A business needing more information about price display or how the ACCC can help it comply with the New Tax System, should visit the ACCC website or call the GST Price Line on 1300 302 502, at the cost of a local call.