The Turnbull Government is now looking to delay introduction of its plan to impose GST on more overseas online purchases for at least a year. This follows widespread complaints from the overseas operators and global air express companies that the government plan would probably prove unworkable.
The delay, which now appears inevitable, would leave a $70 million shortfall in the Government’s Budget planning for the current year. The plan aimed to raise $300 million over four years.
The move to delay follows a recommendation to that effect last month by a Senate committee.
The GST was meant to apply to online purchases valued at less than $1000 by July (GST is already charged on larger items, though not always collected).
But legislation to bring this into effect has yet to pass the Senate – and there are only two sitting weeks before the intended July 1 start date.
The government plan would see sellers made responsible for collecting the GST, but the industry claims this would be impractical. Backing this view, some major operators, including Amazon, eBay and China’s Alibaba have threatened to geoblock Australian consumers from their sites if the plan goes ahead.
E-commerce giant eBay has led the campaign by the bigger US operators, calling for Canberra to drop its plan and move to options suggested by the industry. One such plan would involve operators simply lodging business activity statements to the Australian Taxation Office.
A spokeswoman said that eBay “understands the need for a level playing field, but unfortunately the method of collection proposed in the Bill does not work for third-party marketplaces.”
Air express carriers have also denounced the bill, with Federal Express claiming the Government plan would require major changes to its worldwide IT systems that could take years to complete.