Low Value GST: Importers Relieved, but Retailers Rage

Back on 20 May 2017 we reported on the House of Representatives process for the GST Low Value Goods Bill. Since then the Bill, with a proposed amendment put by the Opposition, was debated and defeated in its Second Reading. It was then passed on its Third Reading and sent to the Senate for its consideration. We can confirm that the Senate passed an amended version of the Bill on 19 June 2017, which included an amendment to delay the commencement of the legislation until 1 July 2018.

The GST Low Value aspects are to be referred to the Productivity Commission for review, to be completed by 31 October 2017, to provide for a more appropriate structured approach in relation to policy and process, with regard to the effectiveness and collection method of the GST recovery.

The change was initially announced by former treasurer Joe Hockey back in 2015, with a view to enforce overseas sellers to collect GST on goods under $1000. It was in the 2016 Budget with a planned implementation date of July 1 this year. Basically the Bill proposes that overseas vendors, electronic distribution platforms and goods forwarders account for Goods and Services Tax (GST) on sales of low value goods to consumers in Australia if they have GST turnover of $75,000 or more.

Angry Australian retailers have expressed their frustration at the delay. They say the GST on low-value imports would have levelled the playing field between local businesses and international giants. At a time when retail spending growth is low, many brands have closed their doors and, with the expected arrival of retail giant Amazon by July next year, the outcome has been seen as an another blow for Australian businesses.

Harvey Norman boss Gerry Harvey had been a vocal supporter of the change and slammed the delay. Australian Retailer’s Association executive director Russell Zimmerman also echoed the sentiment felt by local retailers. National Retail Association chief executive Dominique Lamb said the mood among Australian retailers was one of disappointment. Ms Lamb described Amazon as “a force to be contended with,” but acknowledged it is going to come back to personalised service and convenience. She said no one knows our market like our Australian retailers – they’re “very innovative and they pivot very quickly,” while Amazon is going to need some time to learn about our consumers.[1]

Website eBay was one retailer who had made vocal its opposition to the scheduled July 1 change. During a Senate inquiry earlier this year into the Bill, eBay submitted a statement saying the legislation could force eBay to stop Australians buying from foreign sellers.

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