The passage of the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 through Parliament was referred to the Senate Economics Legislation Committee for inquiry. The proposed legislation is to amend the law to give effect to the 2016-17 Budget decision to apply GST to low value (under $1,000) goods imported by consumers.
The Committee Report concluded that the implementation of the GST on Low Value Transactions should be deferred until 1 July 2018.
The new law will require overseas vendors, electronic distribution platforms and goods forwarders to account for GST on sales of low value goods to consumers in Australia if they have GST turnover of $75,000 or more. Under these new arrangements, imported goods with a customs value of $1,000 or under will have GST collected at the point of sale, using a ‘vendor registration model’ (VRM).
There has been much controversy surrounding the new measures. The hearings of the Committee included commentary by many online providers and express carriers that the VRM was unworkable and would act as a disincentive to the provision of online services to Australia. Ultimately, the report of the majority of the Committee recommended that the Bill be passed, but with implementation to be deferred until 1 July 2018. There were some interesting observations made by Senator Xenophon, and also in the dissenting report by Labor Senators. The latter included scathing criticism of the absence of a ‘Regulation Impact Statement’ with the Bill, and a reported compliance rate of only 25% to 30% in the third year of operation to reach ‘maturity’ of 54% in 2022-23, which would not ‘level the playing field’ as intended by the Bill.
