Australian GST on low-value imports delayed until 2018

The Australian Labor Party has been successful in having changes to GST collection on goods worth less than AU$1,000 begin from July 2018.
Written by Chris Duckett, Contributor

The Productivity Commission is set to look into changes to GST legislation relating to taxing low-value imports and evaluate the models for collection under amendments proposed by the Labor party and passed by Parliament on Wednesday.

The commission will have until the end of October to complete its report, but the government will be under no obligation to accept its recommendations.

The ALP was also successful in having the start date for the laws moved back to July 1, 2018. The legislation presented by the government would have come into force from next Saturday, had the amendments not been made.

eBay previously said the process around GST changes had been "one of the least open" in recent times.

"What we're being asked to do here is as the Bill was introduced into the House of Representatives in February, and we're being asked to comply by 1 July -- it's near impossible," eBay said in April.

Under the government's model, online platforms such as eBay, Alibaba, Etsy, and Amazon would be responsible for the GST collection of platform users who sell over AU$75,000 worth of goods into Australia annually.

Alibaba previously warned that the current model was unworkable and "contrary to good international tax policy", with the company saying that it wouldn't be surprised if overseas vendors stopped selling into Australia.

On Wednesday, Shadow Treasurer Chris Bowen said the lack of consultation meant Parliament had to intervene to give those involved a chance to sort out a model.

"The Senate Economics Legislation Committee report into the GST Low Value Threshold legislation served as documentary proof of this incompetence, with stakeholder evidence almost reaching a consensus over problems with implementation, the vendor-based model, and calls for a 12-month delay," Bowen said.

"Labor's amendments will see the Productivity Commission -- that is already well acquainted with the GST Low Value Threshold -- complete a short study and consultation with stakeholders around the current model and how it compares with alternatives."

The laws are expected to raise AU$300 million over three years from over 3,000 vendors that the government believes will voluntarily register with the Australian Taxation Office.

In presenting the amendments for a vote, Treasurer Scott Morrison reiterated the government's commitment to the vendor collection method, as used in the European Union and Switzerland, and said it leveled the playing field for local small businesses.

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