Commission probes GST complaints

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More than 30 complaints against businesses using the GST hike as an excuse to ramp up prices have been lodged with the Commerce Commission since the 2.5 percentage point increase kicked-in on Friday.

Businesses that misrepresent a price jump as being solely due to the rise in GST from 12.5 per cent to 15 per cent could be in breach of the Fair Trading Act.

Commerce Commission spokeswoman Allanah Kalafatelis told NZPA that before closing on Friday, it had received eight complaints, while the rest had been submitted during the weekend through e-mail - and more complaints were still coming in.

"We would expect people to still be calling in and reporting potential breaches ... for some time."

In one of the complaints, Ms Kalafatelis said the person explained a price had gone up from $55 to $65, and was told it was due to the GST increase.

"That can't possibly be correct. That's the sort of thing that we would want to have a close look at," she said.

"Businesses don't have to explain a price increase. It's a free market, they can put their prices up any time they like, but if they are going to offer an explanation for a price increase, it must not be misleading."

Kalafatelis said the commission would start assessing the complaints this week to see whether they should be investigated, though "it could take a while."

If further action was taken, businesses could receive compliance advice, a warning, or face the courts.

Only the courts can determine whether the Fair Trading Act has been breached. The maximum penalty for a business is $200,000 fine and one of $60,000 for an individual.

- NZPA