Federal Government rules out changes to GST on overseas online purchases

Assistant Treasuer, Bill Shorten, says suggestions of applying GST to overseas online purchases of less than $1000 premature

The Federal Government has ruled out applying the Goods and Services Tax (GST) to overseas online purchases of under $1000 in the short term despite pressure from Australian retailers to do so.

Speaking on ABC television this morning, Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten said suggestions that the GST threshold is to be lowered are premature.

“What some of the retailers are saying is that with the high dollar and all of this, it is undermining the shops in Australia,” he said. “It is not clear cut what to do."

“Certainly there is no policy proposition about a GST for online shopping but what is happening is there is a debate emerging from retailers in Australia which feel that the $1000 threshold [under which GST does not apply] is too high.

“We’ll have to work something out and see if it is administratively feasible — it is only at that stage. I think to add anything else on to it was just speculation…”

The comments follow calls by Harvey Norman chief executive, Gerry Harvey, that the GST should be applied to products bought from overseas online retailers.

“We have spoken to a number of politicians and their answer is `it's too hard'," Harvey told AAP yesterday. “'It is too much to collect. We'll upset the voters because they vote for us'.

"You are going to forgo about $1 billion in one year in tax, that is the GST they are going to lose in one year because this thing has escalated because of the parity."

Harvey’s calls echo those of Dymocks chief executive, Don Grover, who this week warned that a combination of the GST issue and parallel import laws were prompting him to consider sending the company’s online business overseas.

“First of all, what we’re trying to do is make a point to the Government that this is ridiculous, why a 130-year-old Australian business needs to move its website offshore just to compete," Grover told Computerworld Australia.

“The major point of this is making the point to Government that both the parallel importation laws and the GST are currently putting Australian booksellers out of businesses.”

Follow Tim Lohman on Twitter: @tlohman

Follow Computerworld Australia on Twitter: @ComputerworldAu

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