Finance Your Budget Online shopping GST delayed for 12 months

Online shopping GST delayed for 12 months

Online shopping
The GST to goods purchased overseas has been delayed. Photo: AAP
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Australian shoppers have been given a 12-month reprieve from paying GST on items ordered overseas worth less than $1000.

Parliament on Monday voted in favour of delaying the introduction of Treasury Laws Amendment (GST Low Value Goods) Bill 2017 until July 1, 2018.

Speculation that the new charges would be delayed was exclusively reported by The New Daily in April, when a cross-party group of senators urged the government to abandon its attempt to force eBay, Amazon and other popular websites to begin charging GST on all purchases below $1000, the current level at which the tax kicks in.

The new tax, which was due to be implemented next month, would have forced Australian consumers to pay a 10 per cent GST on overseas low-cost goods.

The delay is a win for international online giants but has angered local retailers, who believe they are being put at a disadvantage.

Gerry Harvey, chairman of retail behemoth Harvey Norman, argued the change was the result of clever lobbying by overseas internet retailers, who talked Australian politicians into delaying the change.

“They’ve been hijacked,” he told the ABC.

“The unfortunate thing is that [politicians are] susceptible to this kind of activity, which doesn’t say a lot for their mental capacity.

“If a product is $100 or $1000 in a shop in Australia you put 10 per cent GST on it. If the product is the same price and is imported from overseas you don’t put any GST on it. So it’s just a subsidy straight away to an offshore retailer. How anyone can say that’s a good idea is beyond me.

“If they pay no GST why should anyone in Australia pay GST?”

The government agreed to implement the tax in last year’s budget, claiming the move would level the playing field for small businesses and generate an extra $300 million in revenue over four years.

Shadow Treasurer Chris Bowen said he wanted to see the goods and services tax applied to online shopping, but would not accept a “flawed” bill.

“We do want to see the GST applied to imports at less than $1000. We think that’s important to small businesses in particular but the government has botched its implementation in submission after submission and said it just wouldn’t work,” Mr Bowen said.

Online shopping
Australian businesses believe the delay will only hurt local retailers further. Photo: AAP

“We want to see it implemented properly and we would not vote for a model which is flawed, and clearly the government’s model was utterly flawed.”

However, Mr Harvey accused Australian politicians of being weak at the knees for stalling the important goods tax.

Online superpowers eBay, Alibaba and Amazon previously threatened to geoblock Australian customers from their websites if the bill was permitted.

“They only ever think of votes. The minute someone gives them some proposition that would cost them a vote they start to lose a very little grains of brain,” he said.

Labor’s amended bill was passed through the Senate with 32 votes for and 16 against but still needs to be approved by the House of Representatives.

It’s understood Liberal senators support the amendment and will be given the green light in coming days.

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