Online retailers shipping into Australia to face GST fees

A Goods and Services legislation update in Australia will now mean that overseas businesses shipping in will now have an added tax burden on goods under AUD 1,000.

The AUD 1,000 Goods and Services Tax free threshold is now to be removed, starting from July 1st. This will mean that those web shops shipping in to Australia who sell more than AUD 75,000 annually will now have an additional 10% tax to pay and the burden of collection will fall on the retailer. Businesses will also have to register with the Australian Taxation Office.

The changes to legislation have already prompted retail giants like Amazon to block Australians from using its international stores. These international stores frequently appeal to Australian consumers as overseas prices can often be cheaper than domestic listings.

Within the bike business, retail giants like Wiggle and Chain Reaction ship plenty into Australia, with the latter posting over 10,000 items overseas each day.

Bicycle Industries Australia, with the support of the nation’s distributors, has joined a retail trade coalition which has been lobbying federal Government to alter import rules. This latest move is seen domestically as a win to stop overseas businesses undercutting the domestic market’s suppliers.

Thus far, overseas businesses who ship in to the territory tend to do so with their domestic taxes removed, further lowering the price against a backdrop of saved GST and duty. Bike Europe points out that this has led brands such as Mavic to halt all online trade to Australia.