Classic Video Pty Ltd, trading as Video City, will donate about $4,800 to the Royal Tasmanian Botanical Gardens Trust to compensate for overcharging Goods and Services Tax on the rental of videotapes hired during the week prior to 1 July 2000, after inquiries by the Australian Competition and Consumer Commission. Video City operates 13 outlets in Tasmania.
The ACCC received complaints from consumers concerned that GST may have been incorrectly charged on videos hired before 1 July 2000 and returned on or after 1 July 2000. Video City advised the ACCC that due to the fact that charges are paid on return of videotapes, and the somewhat unclear position at the time as to the taxation implications of such transactions, GST was incorrectly charged on the pre 1 July portion of these transactions.
This overcharge occurred at a number of Video City sites throughout Tasmania over a period of up to one week. It was found that some 20,500 customers were overcharged an average amount of approximately 23 cents, resulting in a total overcharge of $4818.
The ACCC usually seeks to obtain direct refunds for consumers affected by GST overcharges. In this case the ACCC accepted that the small size of each refund and the difficulty in identifying individual consumers meant that a donation to a charitable trust was appropriate.