The impact of GST on Mobile handsets and plans

HANDSETS:

Currently mobile handsets attract a 22% sales tax which will be replaced by the 10% Goods and Services Tax (GST) as of 1st July 2000. This will effectively reduce the wholesale price of handsets.

As to how this will affect customers buying subsidised phones on contracts is still undecided. It may be that prices will remain the same as the networks and carriers may reduce the value of their subsidies, leaving the upfront price to the consumer unchanged.

For example, actual wholesale of a handset may be $300, but after the network pays a subsidy when the customer signs a contract to stay connected on a particular plan for a particular length of time, the price to the customer may only be $49. Because the transaction is not a “normal” retail one, the Australian Taxation Office is still deliberating the ruling.

PLANS:

It seems likely that mobile call charges including access fees and calls will attract the GST. Where this does not apply is on calls made on international roaming (from a country outside of Australia).

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