For years Australian shops have complained that online or overseas retailers had an unfair advantage by not having to collect GST for sales made in Australia. Despite government reviews showing that the cost of collecting GST on low value imports would outweigh the revenue earned it was announced at the last Federal Budget that GST on all imports would be applicable from 1-Jul-17. If the Bill does not pass through Parliament by this date it will start from the next GST quarter after being passed.
In addition to the significant cost incurred by the Government to enforce this change the cost of imported low value goods is likely to rise well beyond the value of GST once online retailers pass on the cost of compliance and maintenance of Australian import requirements.
The Government has chosen to use a ‘vendor registration’ model requiring overseas retailers to register for an ABN (Australian Business Number) and report to the Australian Tax Office the same way as an Australian Company does.
Questions on how the Government plans to enforce this model remain unanswered and low value importers are still in the dark on how this will affect them.
Read more about GST on Low Value Imports on the Australian Taxation Office Website HERE.