The Customer

Big W Discount Stores (Big W) is the general merchandise division of the Woolworths Limited Group in Australia with targeted annual sales of over A$ two billion. It has 95 stores located all over Australia and employs over 20,000 people. The stores are serviced by two distribution centres. Regional offices in each state provide direct store supervision. Buying, Marketing, IT, Accounting and HR are centralised and operate from the Big W Support Office located at Pennant Hills in New South Wales, Australia.

What is GST?

Goods & Services Tax (GST) is sometimes called a value-added tax. It is collected at each stage of the supply chain, or wherever value is added to a product or service by a registered supplier; whether manufacturer, wholesaler, or retailer. Each supplier collects GST on the sales price of the product or service they sell, and receives a GST credit on the GST it paid on business purchases. If, in any given period, the amount of GST paid on purchases is greater than the GST collected, then the Tax Office pays a refund to the supplier. Adjustments such as discounts, returns and bad debts are taken into account.

GST is effectively passed along the entire supply chain, with each registered supplier receiving GST credits on purchases, until it reaches the final consumer, who is not entitled to a GST tax credit.

At the time of introducing GST, the Australian government abolished a number of other taxes, the main one being Wholesale Sales Tax (WST). WST is a tax on the purchase cost of certain goods, whereas GST is a tax on the selling price of goods and services.

Impact of GST on Big W

The introduction of the GST had a big impact on all Australian businesses.

Big W adds 10% GST on the selling price of the goods and services they sell to their customers. However, not all goods and services will be taxed; food for example will not incur GST.

All businesses and consumers pay the tax when purchasing goods and services, with all tax collected being passed on to the Australian Taxation Office.

Consumers are the ones who will end up paying GST on the goods and services they buy ~ they won't be able to get a credit back from the Tax Office.

Big W becomes a tax collector on behalf of the government. All GST that is collected from Big W customers' purchases will be given to the Tax Office and any GST that Big W pays in getting the product to the shelf, Big W claims back.

Big W does not earn extra profits because of the GST. That's because GST is a consumption tax ~ Big W passes it on to the consumer. So when some goods come down in price as a result of the GST ~ Big W will pass on all the savings to the consumer. In the cases where prices increase as a result of GST ~ Big W will only be passing on the appropriate increases.

Big W's GST Project focused on modifying systems to meet legislative requirements and provide the business with effective tools in the new taxation environment.

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