Who will collect GST? Amazon, Australia Post or Cargo Operators

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The goods and service tax (GST) applies to low value goods bought online from overseas vendors but Australia Post is still arguing with online retailers over whose responsibility it is to collect the cash starting 1 July 2018. If this affects you, you may want to consult with your company accountant. 

The Senate has passed legislation to remove the $1,000 GST-free threshold for overseas purchases but there are still many questions about how that would exactly work. The conflict roots from whether third party retail platforms and marketplaces will be involved in collecting the tax from the vendors or if the logistics businesses delivering parcels to consumers should be responsible for it. 

Retail platforms and marketplaces are still pessimistic about how the GST can effectively be collected from overseas sellers and propose a border collection where the tax collection occurs through the businesses that deliver goods. They prefer this to the vendor collection model which was proposed by the government and involves sellers with over $75,000 turnover to register for collection of the tax individually.

They believe the vendor collection model would involve offshore enforcement of Australian laws if retailers did not comply but less complications if vendors did not register. Amazon wants the Australia Post to collect the tax and just develop an effective model over time. 

However, Australia Post believes that the post service would not be able to collect the tax effectively. It says that the platforms have the closest relationship to the transactions so they should be the ones to collect the tax. The Australia Post also rejected the idea that cargo operators should process the tax. 

eBay has already turned down fulfilling Amazon FBA. eBay Australia have banned all third party fulfilment when it could cause confusion to their customers. This effectively bans arbitrage, which happens when a trader sees a product on one site at a low price, buy it and resell it for a profit. Arbitrage traders can cause complications as they usually don’t reside in the countries where they trade to avoid local taxes and duties. 

Some small businesses say that the removal of low-value threshold will allow them to compete with their global competitors better but some are frustrated that Amazon wants to put the burden of tax collection to the Australia Post. No matter how the GST issue will be resolved though, consumers should still understand that the cheapest price often comes at a cost. 

If you would like to know more about the GST and Amazon FBA, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation with a company accountant in Pymble. We’ll contact you to explain more. 

Whether you are a beginner, seasoned investor or business owner, our property and business tax accountants can give you guidance to maximise the financial areas of your life. We can also give you an integrated and tailored solution for your superannuation, taxation, property investment, asset protection, estate planning and more.  

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Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales. 

 

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Photo: Amazon

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