The Court of Appeal Building on Molesworth Street in Wellington. Photo / Mark Mitchell
By Jonathan Mitchell of RNZ
A legal wrangle on whether the Goods and Services Tax (GST) applies to the theft of an iPhone has reached the Court of Appeal.
A man, who has name suppression, is accused of stealing the phone, which had a retail price of more than $1000 including GST, from a Warehouse store.
That could result in a sentence of seven years' jail - but if the price was between $500 and $999 - that reduces it to one year behind bars.
The case was before the Court of Appeal today.
The man's lawyer, Douglas Ewen, said GST applied only when there had been an in-person over the counter transaction, so the lower penalty applied.
"The taxable supply increases that value by 15 per cent because the transaction itself changes the value," he said.
Ewen said the product was worth less than $1000 to the Warehouse.
Justice Brown, who was one of the three judges hearing the case, used an analogy of two people going into a store to look at phones.
He said if they walked out again with the same type of phone, one of those phones would be worth more because they paid the retail sum, while the other took it from the store without paying, so the GST wouldn't be included.
"The value is the value of the phone without GST," he said.
Ewen agreed.
However, Crown lawyer Meetra Wong said the accused knew the purchase price and should have paid it.
"The Crown's primary position is that it doesn't matter when GST accrues and it doesn't matter between whom a GST relationship exists because the point is that the thief has wrongfully circumvented a legitimate sale and that this should be reflected in an assessment of the seriousness of the offending," she said.
Wong said there was a "dishonesty" element that needed to be taken into account too.
The judges reserved their decision.
- RNZ
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