Changes To GST on Imported Goods
New legislation has been enacted that extends the goods and services tax (gst) to "low value goods" from July 1, 2018. It applies to imported physical goods costing $1000 or less, where suppliers facilitate sending the purchased goods to customers in Australia.
Businesses that meet the A$75,000 registration threshold will need to review their business systems to ensure that they are able to comply.
The existing processes to collect GST on imports above $1,000 at the border are unchanged.
The Government has introduced the legislative changes with the aim of levelling the playing field for Australian businesses by applying the GST on imported goods supplied from offshore to Australian consumers. The law requires overseas suppliers and online marketplaces such as Amazon and eBay with an Australian GST turnover of $75,000 or more to account for GST on sales of low value goods to consumers in Australia.
The GST on imported goods collected from this measure will go to States and Territories to fund essential services.
According to the Treasurer, Scott Morrison, "A number of other countries are taking a similar approach and adopting a vendor collection model to collect GST from low value imported goods. Member states in the European Union use this model for sales within the European Union, Canada uses it for magazine subscriptions, and Switzerland’s vendor collection scheme will commence in 2018."
For further details from the A.T.O, click here.