Oasis Credits Pty Ltd (trading as Holdfast Finance Corporation) has provided court enforceable undertakings to the Australian Competition and Consumer Commission after investigations concerning Goods and Services Tax liability for lease payments.
The ACCC's investigations followed a complaint in relation to GST being charged on a lease agreement for a motor vehicle with Oasis Credits Pty Ltd. Further investigation of the matter revealed that there was no GST liability on the lease. The ACCC established that the agreement was not in fact a leasing agreement, but a hire purchase agreement and consequently no GST was payable. GST liability is only payable on the supply of the physical goods. That is, if supply occurred prior to 1 July 2000, then subsequent payments for the supply would not attract GST.
Oasis Credits advised the ACCC that in addition to the complainant's situation, a further 170 customers have been affected as a result of the 'error' and that $29,000 for GST payments was incorrectly collected from customers.
Oasis Credits has acknowledged that its conduct may have raised concerns under the price exploitation and misleading and deceptive conduct provisions of the Trade Practices Act 1974.
Oasis Credits has agreed that it will:
- give affected customers of Oasis Credits three options in respect to reimbursing the incorrectly charged GST:
- an offset against the customer's next payment to Oasis Credits
- a cheque/cash refund to the customer for the amount overcharged by Oasis Credits
- maintain a credit against the customer's account in the amount overcharged
- institute a trade practices compliance program to ensure that future conduct is not at risk of contravening the Act
- retain an independent auditor to ensure that all amounts incorrectly collected are identified and correctly refunded to affected customers
The ACCC welcomes the undertakings provided by Oasis Credits. Whilst the law does not provide 'inadvertent mistake' as an excuse, Oasis Credits acted promptly and the ACCC welcomes the undertakings provided in resolving this matter.