Following a surge in sales of goods from overseas based online retailers the Federal government has announced changes to the low-value import threshold for goods being imported into Australia in the 2016 Budget by extending GST to all imported goods from 1 July 2017.
This measure is welcomed news for local retailers as the playing field is levelled for mid-sized businesses competing against foreign players not caught by Australia’s GST net.
“The proposed changes will be a win for Australian domestic retailers as the measure falls is in line with similar initiatives imposed by other OCED countries,” said Tony Windle, Head of Indirect Tax, Grant Thornton Australia.
The Federal Government is expecting that overseas suppliers that have an Australian turnover of $75,000 or more will be required to register for GST to collect and remit the GST for low value goods being supplied to Australian consumers.
“We expect that the practicalities of imposing and enforcing the obligation on overseas suppliers to register for GST to collect and remit the GST will be challenging. With the recent announcement that Australia Post will commence charging customers up to $9 to pick up undelivered parcels, perhaps the Federal Government could consider utilising the services of Australia Post as an alternative means of collecting the GST from customers rather than from the overseas supplier,” said Mr Windle.
The change will only collect $300M in additional revenue over 4 years and can be seen as the most politically convenient GST “reform” measure available to a government that missed an opportunity for more fundamental and wholesale change to the GST.
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For more information please contact:
Helina Lilley
National Public Relations Manager
M 0437 725 520
E helina.lilley@au.gt.com
