An Australian Competition and Consumer Commission investigation into Goods and Services Tax advertising claims has resulted in Relyt Pty Ltd and S&S Thomson Investments Pty Ltd providing court-enforceable undertakings.
Relyt and S&S own a number of used car dealerships in Townsville, North Queensland, and together with another dealership advertise under the trademark of Q.P.R. Auto Group.
During a recent promotion, Relyt and S&S placed a television advertisement under the banner of Q.P.R. Auto Group promoting the various dealerships. The advertisement made a representation to consumers to Beat the tax man today and compared before and after GST scenarios also saying that GST means Great Savings Today. The advertisement ran for about two weeks and was broadcast on about 50 occasions.
"The ACCC believes the advertisement gave the impression that the price of used cars will rise once the GST is introduced, and that consumers should buy a used car now so as to avoid that price rise", ACCC Chairman, Professor Allan Fels, said today.
The ACCC believes that, in general, the net effect of the removal of the wholesale sales tax and the introduction of the GST on new cars will flow through to the used car market resulting, in the short term, in a fall in the price of used cars. Further, in the longer term, lower new car prices may result in a lower demand for used cars, with a further fall in their price. The ACCC therefore believes it may be misleading to state or imply that the price of used cars will increase as a result of the introduction of the GST.
Relyt and S&S have provided the ACCC with a court enforceable undertaking that they will: not place advertising which states or implies that the price of used cars in general will increase as a result of the introduction of the GST; publish a number of corrective advertisements; and develop and implement a trade practices corporate compliance program. "The ACCC has welcomed the undertaking provided by Relyt and S&S as an effective and timely outcome and acknowledges their cooperation in this matter.
"This investigation demonstrates the ACCC's position with respect to advertising referring to the effect of the GST. All businesses should be certain about the statements or implications made in their advertising, have the facts to back them up and make certain they won't mislead consumers. The ACCC will be vigilant in the transition from the old to the new tax system to make sure consumers are being given the right information by businesses and not being misled.
"This is the third instance that the ACCC has had to take action against sellers of used cars using the GST in their promotions", Professor Fels said.
"The matter also shows that the ACCC will be making sure that consumers aren't misled about the GST whether they are in a capital city, regional centre such as Townsville or any other location throughout Australia".
More information about the ACCC's role in respect of the New Tax System can be found on the ACCC's website at or by calling the ACCC Price Hotline on 1300 302 502 for the cost of a local call.
Relyt and S&S own a number of used car dealerships in Townsville, North Queensland, and together with another dealership advertise under the trademark of Q.P.R. Auto Group.
During a recent promotion, Relyt and S&S placed a television advertisement under the banner of Q.P.R. Auto Group promoting the various dealerships. The advertisement made a representation to consumers to Beat the tax man today and compared before and after GST scenarios also saying that GST means Great Savings Today. The advertisement ran for about two weeks and was broadcast on about 50 occasions.
"The ACCC believes the advertisement gave the impression that the price of used cars will rise once the GST is introduced, and that consumers should buy a used car now so as to avoid that price rise", ACCC Chairman, Professor Allan Fels, said today.
The ACCC believes that, in general, the net effect of the removal of the wholesale sales tax and the introduction of the GST on new cars will flow through to the used car market resulting, in the short term, in a fall in the price of used cars. Further, in the longer term, lower new car prices may result in a lower demand for used cars, with a further fall in their price. The ACCC therefore believes it may be misleading to state or imply that the price of used cars will increase as a result of the introduction of the GST.
Relyt and S&S have provided the ACCC with a court enforceable undertaking that they will: not place advertising which states or implies that the price of used cars in general will increase as a result of the introduction of the GST; publish a number of corrective advertisements; and develop and implement a trade practices corporate compliance program. "The ACCC has welcomed the undertaking provided by Relyt and S&S as an effective and timely outcome and acknowledges their cooperation in this matter.
"This investigation demonstrates the ACCC's position with respect to advertising referring to the effect of the GST. All businesses should be certain about the statements or implications made in their advertising, have the facts to back them up and make certain they won't mislead consumers. The ACCC will be vigilant in the transition from the old to the new tax system to make sure consumers are being given the right information by businesses and not being misled.
"This is the third instance that the ACCC has had to take action against sellers of used cars using the GST in their promotions", Professor Fels said.
"The matter also shows that the ACCC will be making sure that consumers aren't misled about the GST whether they are in a capital city, regional centre such as Townsville or any other location throughout Australia".
More information about the ACCC's role in respect of the New Tax System can be found on the ACCC's website at or by calling the ACCC Price Hotline on 1300 302 502 for the cost of a local call.