GST - a publisher's perspective

Paul Reekie, CSIRO Publishing

• CSIRO Publishing
• Getting ready for GST
• Implementation of GST
• Lessons Learned
• Summary

CSIRO PUBLISHING
A business that publishes:

• 17 scholarly science journals
• a science magazine (rolling subs)
• scholarly books & CDs
• general interest books & CDs
• web sites, online content & videos under contract to CSIRO & others

All have very complex GST implications!

Getting Ready for GST

• Not a tax expert!
• Not an accountant!
• Changes required would be big
• GST part of a tax revolution
• Forced to assess the legislation
• Forced to review all aspects of our business
• Started in July 1999
• Reviewed the legislation
  • What did the new laws mean for us?
  • Could not rely on experts - there were none!
• Reviewed our cost structures
  • How would GST impact on our costs?
• Reviewed our systems
  • Could these cope with the process/accounts?

What we did:

• Obtained an ABN/Registered for GST
• Prepared Tax Invoices to ATO specifications
• Commenced education process for
  • management & staff, customers
  • think, talk, learn, ask, review, explain - patience!
  • living GST for 12 months
  • education process ongoing
• Worked through difficulties
  • suppliers slow to respond with cost assessments
  • legislation very complex/changing

ATO ruling on subscriptions:

• GST liability would exist on Australian subscriptions
• 50% of subscription value for the year
• 60 day rule on overseas subscriptions
  • obtained an exemption ruling!

Implementation of GST

• GST rate of 5% applied to 2000 prices
• Accounting process started in Oct/Nov 1999 to capture GST
• GST applied to rolling subscriptions
• GST applied to all book & CD prices from 1 July 2000
• GST rate of 10% will apply to 2001 subscriptions

Lessons Learned

• No cost savings on journals & books from removal of hidden taxes
• GST will increase prices by 10%
• Rebate for textbooks
• We all have to cope - GST is reality
• GST is a tax not a cost to those in the supply chain
• You must capture all GST paid (input tax credit)
• You must record all GST collected
• The Bucket!
• You must remit (or claim) the balance
• Tax changes are a revolution
• Better understanding of our business
• More competitive?
• Supplier relationship has changed
• Major suppliers must have an ABN
• Freelance staff - 48.5% withholding tax or obtain an ABN?
• Freelance staff must have an ABN
• Preference for all suppliers to also register for GST
• Customer education has been inadequate
• Impact of discounts & GST implications
• Patience!
• Tax Invoice critical to GST process
• ATO ruling on quotes/pro forma invoices
• Pro forma subscription renewals will become a Tax Invoice for GST when payment is made
• GSTR 2000/17 (paragraph 26)

Summary

• GST is a reality - you have to cope
• You must know your business
• You must know the legal framework - get good advice!
• You must manage the GST closely
• We must all be patient & flexible over the next few months