Michael McAuliffe, Kate Law and Nick Kallinikios examine the legislation imposing GST on low value imported goods, currently before Parliament.
The Australian Government introduced the Treasury Laws Amendment (GST Low Value Goods) Bill 2017, on 16 February 2017, to impose goods and services tax (GST) on supplies of low value imported goods to Australian consumers.
This is to be achieved through taxing supplies of low value imported goods (being goods valued at $1,000 or less) where they are supplied to Australian consumers. In some situations, operators of electronic marketplaces and entities that assist consumers acquire goods from overseas (referred to as re-deliverers) are deemed to make the supply and thus liable to account for GST.
The Bill is viewed by the Government as a revenue protection measure in response to the increase in online purchases. It is also a response to intense lobbying by Australian retailers who desired a level playing field with online retailers. However, these measures introduce a new bias against small overseas businesses, which would not otherwise be liable for GST on a standalone basis, where they make a supply through a marketplace.
The amendments are anticipated to take effect from 1 July 2017 which leaves little time for businesses to digest the implications of the new rules, establish processes to determine the status of their customers and ensure GST is correctly accounted for.
In the case of marketplaces and re-deliverers this may require that they obtain additional information from online sellers and end consumers. In particular, these entities will have the burden of tax collection and educating suppliers and consumers on the pricing implications.
Further details of the Bill are provided in KPMG’s Brief GST Reform of Low Value Imported Goods.