Whether a price includes GST or not is important to know for the price of a product. In the case between the New Zealand Police and Genesis Pure, ‘GST’ became the difference between a maximum penalty of seven years in jail, or one.
Mr Pure was charged with stealing an iPhone and Sim card from The Warehouse. The retail prices was $1,004, including GST. The maximum sentence for theft exceeding a value of $1,000 posed a maximum penalty of imprisonment for seven years. However, Mr Pure contested that the value of the iPhone exceeded $500 but not $1,000 because the GST exclusive price was less than $1,000, which carries a maximum term in prison of one year.
The District Court agreed with Mr Pure on the basis that The Warehouse would not be obligated to pay GST to IRD for the stolen items. To penalise Mr Pure based on the GST inclusive value was deemed to overcompensate the victim in this instance and produce an unfair outcome for the defendant, especially when the value of theft only marginally exceeded the threshold for higher penalty. The New Zealand Police did not agree with the above view and has requested a leave to appeal to the High Court. In considering the leave to appeal, the High Court looked at what defines ‘value’. Various cases in overseas jurisdictions provide different views and the Goods and Services Act 1985 does not help.
Ultimately, the High Court viewed value to be objectively considered, not from the perspective of the victim or culprit. The appeal has been allowed and whether the Police pursue prosecution to reflect value in excess of $1,000 remains to be seen.