Thread: July the 1st 2018 GST On Low Value Imported Goods

Originally Posted by thumbsucker

What am I missing?

I don't think you're missing anything. I had always assumed that this change simply meant that Australian Customs would now halt all deliveries inward bound where the amount comes to greater than AUD$100, and send the package recipient an invoice for the GST (in much the same way as would happen now on a package where the goods are over AUD$1000).

In reading your linked material, it seems the government have decided they want the tax, but aren't prepared to pay (customs) to collect it, and are therefore pushing the responsibility off to the overseas merchant and/or payment platform.

Here's my kicker...

What if I order a bunch of stuff from the USA on 2nd July, and have it sent to my freight forwarder based in Colorado? As far as the US merchant is concerned, the supply is to a domestic address, so none of this GST malarkey even comes into the picture for them. My freight forwarder sure as heck isn't going to charge me GST...

So... what now, Mr Turnbull?

Lemme guess, your boffins in their ivory towers never figured on this sort of thing, and have no playbook for this one, eh?

(I am reaching out to my freight forwarder by email now and asking what they know and plan on this, I will have answers within 24 hours, and will happily share them here).

Originally Posted by thumbsucker

Could this law force Lee Valley and Lie-Nielsen to do the same? I am planing to buy $800 of tools from Lie-Nielsen in the next week to get in under the wire.

Yes, but only if their sales to Australia is $ 75,000 per year. However at this stage there is no mechanism to enforce such compliance or collect the escaped GST from you at the border.

I purchase lots of stuff from Japan from mom & pop tools shops who will never be registered for the A$75,000 registration threshold. Does that mean that I will not PAY GST on those purchases.

Not to mention the dozen of nickel and dime purchase I make on eBay for stuff out of China. I cannot imagine a factory in China collecting tax of Australian government.

What am I missing?

You are not missing anything and yes you will not pay the GST as long as it comes direct from the seller. If you buy through eBay it will be the same as Amazon and you will pay the tax, provided that eBay will continue to sell to Australia.

So there is a lot of scope for not paying the tax and the Productivity Commission has pointed that out to the Government but the other alternative to hold up parcels at the border and collect the tax from the purchaser is impossible because of the volume concerned.

Peter.

Originally Posted by Midnight Man

(I am reaching out to my freight forwarder by email now and asking what they know and plan on this, I will have answers within 24 hours, and will happily share them here).

I have heard back already on this topic. The freight forwarder I use has all their systems set up and good to go for this coming into place on 1 July. They will collect any appropriate GST and submit it as part of their service in sending goods over here.

Thus, if there are any places in the US that now refuse to ship or sell to Australia, a solution exists (this won't avoid the GST, but it will allow purchases from places that may refuse to sell).

I will say at the outset I have no affiliation with this freigh forwarder other than as a very happy customer, but if anyone does come across an issue in getting something, I would be happy to share the details and get you in touch with them - flick me a PM (I'm not sure if I can link to them here).

Received an email from ShopNShip, which I've used a few times and found excellent.....

This is what they said:

Please note that effective July 1, 2018, the Goods and Services Tax (“GST”) will be applicable on low value goods imported in accordance with the new laws passed by the Australian Government. Please see below for important information to understand how this will impact you.

GST Rate: 10% of the Value* of the imported good(s)

Low Value: AUD 1,000 or less

*Definition of Value: The sum of (i) the customs value of the good(s); (ii) customs duty payable; (iii) amount paid or payable to transport the good(s) to the port of final destination in Australia (or where goods are posted in Australia); (iv) insurance cost for transport; and/or (v) wine equalization tax payable, if applicable.

Invoices: In order to ensure the correct amount of GST is charged and to avoid penalties, S&S members will be required, within 48 hours of receiving a notification from Aramex, to upload the retailer invoice or proof of payment to the supplier on the weblink using the tracking number.

Effective Date: July 1, 2018

Please note that Aramex will continue to provide you further details regarding GST on low value goods, and will update the Shop & Ship Terms and Conditions to reflect the application of GST on low value good(s) imported to Australia.

On another note, I order in about 10 parcels of stupid little things from China a week.

Every single parcel since last week has been labelled "low value commercial sample" and the value marked as zero.

Just HOW customs is going to collect GST on 200 million tiny parcels sent weekly will leave me amused.

Even more amusing will be how "They" will determine who has done 75k of business with Australians... Will Axminster in the UK collect tax on behalf of the Australian government and remit it diligently? Not too bloody likely!!!!!

So does this tax apply to second hand goods? I am going to the US later this year and was planing on sniffing around some second hand dealers and such. I suppose I would have to declare any new tools on arrival.

TT

This issue has popped up at least twice already, and what follows is my recollection of what I read when researching before posting in those earlier threads.

a.) The current $1000 threshold will remain. i.e. shipments worth more than $1000 (including shipping) will be assessed by Aust Customs and a bill for GST and import duty, if applicable, will sent to the recipient.

b.) goods worth $300 to less than $1000 will be subject to the new "rules". i.e. GST "collected" by the merchant, re-shipper, or platform (Amazon, eBay, Alibaba, etc.)

c.) goods worth less than $300 will continue to be admitted GST free. If this is still the case, it would apply to Woodpixel's small value shipments from China. I can't now find the reference to a $300 lower liomit for GST.


Now, based on what Woodpixel is posting, it appears some retailers or freight forwarders are saying "stuff it" and are proposing to apply GST to all shipments bound for Australia.
The problem with this is that ATO is saying it's the customer's problem if they get billed the GST twice -- once by the retailer / shipper -- and again by customs. ATO are suggesting that should this occur the customer will need to seek a refund from the retailer.


Personally, I think it likely that if reputable suppliers like Lee Valley and Lie Nielsen sign onto the scheme they will apply Australian GST to all goods bound for Australia regardless of the value of the shipment.
BUT
both companies have beyond excellent customer service. Why not drop them a line?

Originally Posted by thumbsucker

I am planing to buy $800 of tools from Lie-Nielsen in the next week to get in under the wire. What am I missing?

What you are missing is the package has to arrive here before July 1 to get under the wire. If you are planning to order "in the next week or so" then I doubt you have any chance of success. If you order today (just 16 days from July 1), and ask for expedited postage then you may have a small chance. Otherwise there will be probably 5% Import Duty ($40), 10% GST (including on the ID so $84), and GST on the freight, say another $5. So the extra charges will be in the realm of $129.

I think people, including vendors, are forgetting that there is a window in that last week or so of June where the new law is yet to apply at the time of despatch, but will certainly apply at the time of arrival.

Originally Posted by ian

c.) goods worth less than $300 will continue to be admitted GST free.

I still haven't seen where that is mentioned, nor have I seen where they are addressing Import Duty (or will they forego it?). From the OP's link "make supplies of goods valued at A$1,000 or less at the time of supply" which to me means GST will apply to something worth $1.

Originally Posted by ian

Now, based on what Woodpixel is posting, it appears some retailers or freight forwarders are saying "stuff it" and are proposing to apply GST to all shipments bound for Australia.

Not quite Ian - >$1000 will still be collected at the border like it always has been (and that will then include Import Duty, as it always has, and therefore GST on the ID.

Originally Posted by woodPixel

This is what they said: Low Value: AUD 1,000 or less

And from the link the OP supplied: "The existing processes to collect GST on imports above $1,000 at the border are unchanged."

Originally Posted by thumbsucker

If someone can point me in the direction of a thread were this was covered it would be appreciated.

Amazon purchases and new GST Rules

What I can't find is how the new "rules" apply to consumers.

I can find the typical truckload of government buff applicable to businesses, but very little regarding consumers.
Business appear to have a process to recover double taxation, but I can't find a similar provision for mug consumers.

Originally Posted by FenceFurniture

I still haven't seen where that [a $300 floor] is mentioned, nor have I seen where they are addressing Import Duty (or will they forego it?). From the OP's link "make supplies of goods valued at A$1,000 or less at the time of supply" which to me means GST will apply to something worth $1.

I'm sure I read that floor somewhere, but I can't find where.
In its absence assume GST applies to items costing $1 or less.

Originally Posted by ian

Business appear to have a process to recover double taxation, but I can't find a similar provision for mug consumers.

In that link it says something about avoiding double payments (but that's all it says). As long as the overseas business or freight forwarder is on the ball then the double payment shouldn't happen because they should know that >$1000 is not collectible by them. My concern, as previously expressed in the other (very easily found, btw) thread is with dopey companies like Shipito. I would be staggered if they were able to get it right - and then, trying to convince them that they owe me a refund?

Uh huh.

Looks like many retailers may have waited till the last two and a half weeks before advising customers.
I have just received this from NZ Post.

Hi Ian From 1 July 2018, Australian law requires New Zealand Post to charge Australian goods and services tax (GST) on sales of low value goods to consumers in Australia. This means that GST will apply at the point of sale in the same way it does when you buy goods from a business in Australia. GST will also generally apply to shipping or insurance relating to the purchase. For goods imported in a consignment over A$1,000, any GST, customs duty and clearance charges will be charged to you at the border under existing processes. If you’re ABN registered, please supply your ABN number to us. Your account will be adjusted accordingly on any purchases you make from 1 July. You can read more about this tax change on the Australian Taxation Office's website.

Originally Posted by ian

Australian Taxation Office's website.

Oh man that has so many questions that need to be clarified, or thought through properly (or at all).

They say that if you can provide proof that the GST has already been paid, then that's ok you won't have to pay again. However, they go on to say you have to get a refund from the o'seas business in the case of a >$1000 item where the GST is charged o'seas. Why not just accept the proof that it has already been paid (like in the other circumstance) and not collect it at the border then? Talk about classic Govt cumbersome thinking!

Then there's this:

• the goods are low value goods (the customs value of each of the goods was A$1,000 or less when you purchased them,
  

This will only be necessary if the:
customs value of the goods is over A$1,000 when they are imported

This goes to a change in the exchange rate between when you pay for the goods and the mid-market rate on the day they are despatched. This has always caused problems, and the only simple way around that is to have the retailer do an invoice in AUD, otherwise you can find that due to an exchange rate shift, against your favour, the goods that you paid $980 for are suddenly worth $1002 because the rate changed by 2.2% between when you paid and when they were sent.

Then there's this, which is straight up and down laughable:
Generally, if GST is likely to apply to an item, the website should display a GST-inclusive price. This is a requirement of the Australian consumer law, which is administered by the ACCC

So what, the ACC is going to patrol all the websites in the world that have >$75k dealings with Oz, and take them to court if they don't display a GST inc price? Who was the genius that thought that up?

This:
that are worth A$1,000 or less

is yet another repeat of what must be a $1 floor.



Ibuprofen anyone?


I suppose this could all be an over-cumbersome nightmare deliberately designed to fail. That way the Govt can kill it after the 3 year trial and say to Harvey - "Look, we tried and it cost us too much money to satisfy you. Better not donate to us any more."



I'm not expecting to hear from Shipito until at least June 30. They're good like that.