From 1 July 2017, the 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. The intention is that low value goods imported by consumers in Australia will face equivalent GST treatment to goods that are sourced domestically.
Australia has operated a ‘de minimis’ threshold for customs duty and GST, which meant that consignments with a customs value below $1,000 were free from GST and customs duty, and were also subject to a more streamlined reporting system, often by way of ‘Self Assessed Clearance Declaration’ (SAC). This practice was consistent to international conventions and meant that many low value transactions did not require a certificate of origin or other declaration, even where preferential rates under FTAs were being claimed.
Australian retailers had complained that overseas vendors of goods enjoyed an unreasonable advantage over local businesses because they did not have to bear all the same operating costs. Some authorities saw the system as a significant risk to the integrity of the GST system. The Australian Border Force (ABF) had been concerned about abuses of the regime including deliberate under-declaring of the value of goods or avoidance of permits, although they had long held that the cost to implement, administer and recover the GST on low value transactions would far exceed the revenue recovered. The government will consider submission on the changes, made in writing to the Treasury, until 2nd December.
