# GST rate on Costco memberships is 6.13%



## Jack Malarkey (Jan 11, 2016)

(This discussion is directed to those who revel in detail even if it results in differences of minuscule amounts.)

I was surprised to see that the GST charged on my Costco business membership of $55 was only 6.13% (and not 10%).

This will affect the (partial) GST credit I claim on this purchase.

I don’t know why this is so. I can only speculate that the annual membership fee covers several discrete items only some of which attract GST, meaning that the 6.13% rate is a composite rate reflecting mixed supplies.


















See also:



ATO Community



(This discussion mentions a GST rate of 6.46% rather than 6.13%. I wonder if the composite rate fluctuates from year to year.)


----------



## UberDriverAU (Nov 4, 2015)

It's unusual to see that for a company like Costco, but quite common with car rego, where licence fees and insurance duty are GST free. Looking at an old car rego form, the GST amount was $36.86 for 12 month option, and the total amount was $685.30 for the 12 month option. So GST was 
5.38% in this case. 

We can deduce that the taxable component of the Costco membership fee is 
$33.72, because 0% and 10% are the only GST rates if I recall correctly.


----------



## Jack Malarkey (Jan 11, 2016)

UberDriverAU said:


> It's unusual to see that for a company like Costco, but quite common with car rego, where licence fees and insurance duty are GST free. Looking at an old car rego form, the GST amount was $36.86 for 12 month option, and the total amount was $685.30 for the 12 month option. So GST was
> 5.38% in this case.
> 
> We can deduce that the taxable component of the Costco membership fee is
> $33.72, because 0% and 10% are the only GST rates if I recall correctly.


Thanks. Interesting.

This is how GST is shown on car registration notices in the ACT:










(MAI stands for motor accident injury insurance and is the equivalent of CTP insurance in other states and territories. The reason I’m recorded as not being entitled to an input tax credit for this car is that I use it only privately.)


----------



## Zuständig (Aug 31, 2019)

This is an extract of an explanation on the ATO website.


> There are situations where the GST payable shown on a tax invoice may be less than 1/11 of the price. This may happen for example when the supplier makes a supply that is partly taxable and partly GST-free (this is called a mixed supply). In this situation GST is only payable on the taxable part/component of the supply. That is, 10% GST is only charged on the taxable part of the supply. By way of an example, a supplier makes a mixed supply as follows:
> 
> *Supply* *Value* *GST* *Price*
> GST-free part $22 $0 $22
> ...


----------



## Sandhills (Feb 9, 2018)

Interesting and good to note the small details as shows an inquisitive mind and can sometimes lead to huge savings 

Just this morning I noticed a dead rat (true) in the grass outside our unit , I flicked it over the neighbours fence because they always have rowdy BBQs and the smoke comes in my window 👍


----------



## Jack Malarkey (Jan 11, 2016)

The effective GST rate on Costco memberships in 2022 is 6.39%.

See the earlier posts above for an explanation.


----------

