No GST on petrol vouchers—institute

Press, 27 November 1986, Page 6

No GST on petrol vouchers—institute

By

DAVID CLARKSON

GST does not have to be paid when petrol vouchers are purchased, the Consumers’ Institute in Christchurch warned last evening, after a report that many service stations are charging the 10 per cent tax.

The warning was issued as the Retail Motor Trade Association began its advertising campaign to convince people to cover their holiday petrol needs in advance, using the vouchers.

The institute’s complaints administration officer for the South Island, Mr Maurice Smith, said the association agreed the tax should not be paid when people

bought the vouchers. It is expected to advise its members of the correct procedure, but in the meantime, Mr Smith has made the issue public. He said a Christchurch man approached his office yesterday to say he had just returned from a trip round the South Island during which he had used vouchers he had bought in advance.

At five or six service stations where he had bought the vouchers over a period he had been charged $ll for a $lO voucher.

After he had used the vouchers to buy petrol or other goods at service stations he realised he was paying GST at that

stage as well. Mr Smith approached the Inland Revenue Department in Christchurch which confirmed that legislation said GST was not to be paid on vouchers sold for a set amount.

It had to be paid when a voucher for a particular item — a record, or a night at a motel for instance — was purchased. This was because the person receiving the gift voucher would certainly feel offended at having to pay GST when it was cashed.

Mr Smith had expected to be able to tell the offending service station about its mistake, but it appeared the practice was widespread, he said.