The government has called on the Board of Taxation to review the collection of GST on low-value imported goods and advise on its effectiveness, as well as any relevant international developments and experiences.

Prior to 1 July 2018, GST was not imposed on supplies of low value imported goods (customs value of less than $1,000) to Australian consumers, posing an unfair advantage to foreign businesses.

Australia was one of the first countries in the world to implement a vendor model, requiring suppliers, online platforms and re-deliverers with an Australian GST turnover of $75,000 or more to register, collect and pay GST to the ATO.

eBay Australia welcomes the review of collection of low value GST as it provides a level playing field for Australian retailers when competing with businesses overseas.

“While some online marketplaces like eBay are required to collect and remit GST, there are other platforms that don’t apply GST when goods are sold through them,” an eBay spokesperson told Appliance Retailer.

“Allowing foreign businesses that sell low value goods into Australia without having GST applied is unfair. It creates distortions in the market, by enabling businesses who sell to Australia via an online store to charge 10% less.

“This encourages consumers to shop on less trusted websites which do not provide guarantees on purchases, reduces government tax revenue and most importantly reduces the competitiveness of Australian retail.”

Accounting firm, BDO Australia also welcomed the review with increasing compliance among international suppliers since the introduction of the measure, on 1 July 2018.

“We have also noticed an increase in activity by the Australian Taxation Office (ATO) with targeted notices sent to a range of international suppliers alerting them to their Australian GST obligations,” BDO tax partner, Fady Abi Abdallah said.

“The ATO activity, along with increased supplier awareness is resulting in increased supplier compliance and is assisting in levelling the playing field for Australian suppliers.

“However, many suppliers are still unaware of their Australian GST obligations and some confusion still remains, particularly in relation to re-deliverers and supplies made through electronic distribution platforms.”

The findings are due to be released later in the year.