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GST: Pricing advice by industry associations

Industry associations can assist their members to assess the impact of the GST on prices and how to deal with pricing without breaching the Trade Practices Act. But industry associations face a risk of legal action with the possibility of some serious penalties if they help fix, maintain or control prices, or where they facilitate a meeting of the minds on price setting.

The Australian Competition and Consumer Commission sees discussion of GST as helping with a smooth transition to new price levels and believes this can occur without breaching the Trade Practices Act.

Industry association staff, in preparing discussion papers on the GST for members, should avoid making recommendations about price movements, especially in terms of a simple price or percentage margin movement. Staff might consider instead the impact of the GST on a range of sample businesses in their sector.

Examining the impact of a GST on business supplies, including leases and service contracts, will assist in assessing the general level of a final price for a product or service. It is important that any association's analysis of price movements focuses on and emphasises the full pass-through to the consumer (be it a person or a business) of any tax reductions which make up the new tax system.

If an association currently provides information to members on costing practices (ie. setting a calculation for total costs such as electricity, rent, raw materials, insurance, etc.), it may wish to advise its members of the impact of GST on each of the inputs to the calculation.

Further information regarding GST pricing is available from the Commission hotline on 1300 302 502

Information regarding the Trade Practices Act is available from a Commission office in your State or from its website at www.accc.gov.au

Information regarding the administration of the GST is available from the Australian Taxation Office on 132478

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