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

Originally Posted by Chris Parks

My point all along.....


The government has asked Australia Post to collect the GST but Australia Post has said that would render its parcel business unviable.

My thoughts on the matter are that the small stuff will come through untouched and the big players will pay periodic amounts that in reality won't cost heaps to collect. That way the ATO will get some but not all at a reduced cost to them.

I agree. Last year the Guardian reported that the ATO has been allocated an extra $4 million pa to hopefully collect about $75 million pa of the $450 million pa that it supposedly misses out on from on-line OS sales. It sounds like they are doing a suck it and see exercise.

I was speaking with a tax ATO auditor about 4 months ago and he told me they have doubled their auditing staff and are checking a lot more businesses and self employed sole traders to see if they can skim some more tax from them.
I would say in general that there is not enough money to go around to cover their expenses so looking to tighten up any holes in the drag net

Given that anyone who is part of this discussion might have a need to use a freight forwarder, can I urge you to look at this post
USA Freight Forwarders - who do you use - what are they like?

and particularly post #44. Startling revelations on freight.

Yeah, the statement that collecting the Great Sucky Tax by AP, or others for that matter, will make the service unviable is piffle..

it it is not based on one single thread of evidence, it is conjecture at best, at worst. The reality is that with modern payment terminal options, pay pal, square and many many others it would be a simple and cost effective solution to have the delivering driver collect the revenue. The customer is for warned of the obligation, ticket the box deliver or destroy and everyone is happy. The money merchant takes the 1.95% and does their business from s beach in the Bahamas.

to be honest, I for one have had a gutsful of the argument. They had a chance to get it right and took the wrong path. Remember we voted these dickheads into office. It could have been virtually seamless but no, Make it complicated and put the onus on a foreign entity that we have absolutely zero control over. Good idea, not.

the arguement could go something like this. You sent more than $75000 worth of goods to Australia last fin year, please remit the gst collected.

no I didn’t

yes you did

no i didn’t, prove it.

much paper shuffling and cost, government cost. Here’s the evidence.

ok, but I’m not giving you the money.

oh, well there is not really much we can do about that..have a nice life.

Well I got an ebay parcel though the mail today - no hold up - no GST.

Has anyone bought something on ebay or Aliexpress and did they apply GST?

Originally Posted by BobL

Well I got an ebay parcel though the mail today - no hold up - no GST.

As did I, but it might have landed and cleared customs on Friday or Saturday before the new rules took effect. I am expecting another one in the next couple of weeks that was bought pre-change... we'll see what happens.

I'm not sure if anyone has posted this Department of Home Affairs link already - I don't think so

https://www.homeaffairs.gov.au/trav/impo/buyi

Buying over the internet

Things you buy over the internet will have the same rules, duties and screening processes applied as any other import.
You need to know that:

• For goods with a value of AUD1000 or less, there are no duties, taxes or charges to pay at the border.
  
  • From 1 July 2018, the Goods and Services Tax (GST) may apply to low value goods when imported from overseas by consumers in Australia. However, the GST will be charged at the point of sale and not at the border.
  
  
• For goods with a value over AUD1000, you will need to fill out an Import Declaration, and pay duties, taxes and charges at the border.
• You will need to pay duties and taxes on some goods (like tobacco or alcohol) regardless of their value
• Certain types of goods are not allowed to be brought into Australia, or else need special permits.

What can I import?

Goods with a value of AUD1000 or less

Goods with a value of over AUD1000

Before you buy online

Gas and electrical goods

Pirated and counterfeit goods

DoHA - Buying over the Internet.jpg



In the various linked pages, here's another one of general interest:
https://www.homeaffairs.gov.au/busi/...and-taxes/low-

GST on low value imported goods

From 1 July 2018, goods with a customs value of AUD1000 or less (low value goods) may attract the Goods and Services Tax (GST) at the point of sale if imported from overseas by consumers in Australia.
There will be no changes to:

• the AUD1000 threshold for reporting and collection of duties and taxes at the border
• border clearance processes
• the flow of goods across borders
• current import requirements for tobacco, tobacco products or alcoholic beverages.

Businesses with sales (subject to Australian GST) of AUD75000 or more to consumers in Australia within a 12 month period, will need to register with the Australian Taxation Office (ATO), collect GST at the point of sale and remit that GST to the ATO.
This includes businesses that are:

• merchants who sell goods to consumers
• electronic distribution platform operators
• re-deliverers

There are rules that determine which businesses will need to register for, and charge GST. Further information onGST registration for non-residents of Australia is available from the ATO website.
The ATO is communicating, educating and assisting affected businesses to comply with the measure and ensuring specific information is available for transporters and customs brokers; consumers; and businesses all of which may be impacted by these changes.
Further information about GST on low value goods is available on the ATO website and also available in Chinese.


Changes to the ICS

GST-paid exemption code

GST refunds

Inquiry into collection models for GST on low value imported goods

Low Value Import Threshold Taskforce


DoHA - GST on low-value imported goods.jpg

Originally Posted by BobL

Well I got an ebay parcel though the mail today - no hold up - no GST.

Has anyone bought something on ebay or Aliexpress and did they apply GST?

I just went on Aliexpress and put two items in my cart, I am registered on there and shipping says to Australia and it doesn't show any payment for GST, unless it does it when you commit to buy but I doubt it:

Aliexpress.png

Having started this thread I have followed it anxiously. This is my summation to date.

If home affairs can be believed then this may turn out to be a tempest in a teacup.

Big businesses those WAY over the $75,000 limit will sign up for collecting GST for the government OR they will abandon the Australian market. Personally I hope for the latter because it will cause the government to reassess this tax misadventure.

Many medium businesses will slip under the radar and as people have pointed out the Australian government cannot prove that any business has undertaken more $75,000 in sale in Australia and even if they could they cannot coerce any foreign entity to comply. We are not going to send the Army to shoot up their corporate headquarters.

Neither will international law allow the government to bar imports from a transgressive business entity as retribution.

Everyone else it will be business per usual because as mentioned the government is not willing to collect the tax at the border OR deal with the demanding payments for goods before authorising delivery due to the logistic complexity. The former will cause an undue burden on customs and the latter will hamper AustPost. Imagine the workload of a posture delivering parcels having to stop at every delivery address then demand payment, then argue the amount and if agreement to pay is reached then engage in an electronic transaction, print prof of payment then handing over the parcel before moving to the next house.

Nor will the Government be able to wrangle the money out of the nickel and dime operators overseas. No one would be so dimwitted to believe otherwise.

I think the government has played this smartly. They have caved to big business to whom they can say look we did what you wanted a GST on import but they can rightly claim that there are limitations to government powers and that the government cannot be expected to collect GST on all goods. The net result is that for the Australian purchaser the net effect should be nill to negligible.

I am reminded of a few choice quotes:

A case of the left hand not knowing what the right hand is doing.

Fish thrive in murky waters.

The more numerous the law the more corrupt in the nation.

0. (as already very clearly stated, there are no changes to the procedure for packages >$1000, and Import Duty may be applied as well as GST)

Ok, so the way I'm reading this:
From 1 July 2018, the Goods and Services Tax (GST) may apply to low value goods when imported from overseas by consumers in Australia. However, the GST will be charged at the point of sale and not at the border.

is as follows for sub $1000 packages:
1. Any overseas retailer/vendor/supplier who is doing $75k+ pa into Australia should now be GST reg and therefore
we will pay GST when the goods are purchased, and
Import Duty will not apply.
This is only for a situation where the supplier dispatches the goods directly to the purchaser in Australia via USPS, UPS, FedEx etc etc.

2. If they are <$75k then they will not charge GST and it will NOT be collected at the border for sub $1000 packages, under any circumstances. However, and this is just my take, some of those packages may still be queried just as my Festool packages have been, and further documentation (or indeed a repeat of what is in front of them) may be requested before releasing the package.

3. If we (the purchaser/consumer) are sending packages to a freight forwarder then the GST will (or should) NOT have already been paid at purchase because
it was delivered inside the selling country, and
the Aust Govt assumes that the FF (or FF's FF using FF ) does $75k+ into Aust, and
that they (the FF) will collect the GST and send it on.
Note that I have emphasised "we" - in other words it is not the supplier who chooses and sends the package to the FF. Therefore they do not have a financial relationship with the FF - and therefore cannot collect GST. The FF has the financial relationship with us, and can collect GST.

4. Following on from that, if the supplier is the one who chooses the postage method (USPS, UPS, FedEx etc) and
sends the goods directly to Australia (so no FF is involved), and
this supplier is <$75k, then
GST will have never been collected, and WILL NOT be collected at the border (because it's a sub $1000 package). Even if the deliverer (USPS et al) is registered for GST they cannot have collected it because they have not been involved in the financial part of the transaction.

As a side note: I wonder if USPS even has to be registered for GST? For that to be the case there would have to be enough Aussies with a direct financial link to them (i.e. USPS account holders) and that may not be the case (simply because anyone doing enough freight to warrant an account WOULD NOT CHOOSE USPS!). Also, in the case of freight forwarders, what is it that constitutes $75k of business? Their charges alone or charges plus packages value? Hard to see it as anything other than the latter.



So it seems to me that the Govt just wants to catch "most" of the sub $1000 packages, and have the people overseas do their job for them. The packages that won't be caught are those from smaller suppliers into Oz, who send a <$1000 package directly to the purchaser via a method of the supplier's choosing. I imagine that this will still be a helluva lot of packages that are exempt, but as we already know, eBay packages will not be exempt, and that probably accounts for a goodly part of the very small packages.

That all means that there will NOT be packages piled up to the rafters in the various Customs areas - because it would be an absurd amount of work for return. In fact if my summary is correct then there shouldn't be any delays over and above what used to happen before July 1. The various agencies won't be doing any more work at all - not at all.



Now all we have to do is wait for the first court case where an Importer cries "foul" on having to pay Import Duty when all the sub $1000 packages are exempt.

Originally Posted by thumbsucker

I think the government has played this smartly.

Agreed, but for different reasons. If my summary is correct they will be doing nowt and collecting a fair bit of extra revenue.

Originally Posted by thumbsucker

The net result is that for the Australian purchaser the net effect should be nil to negligible.

Not agreed.
I wouldn't call being locked out of Amazon (proper Amazon) negligible.
Same for any other business that throws its hands up at Aussie purchases.
Even the 10% extra I wouldn't call negligible because it also on freight, insurance and forwarder's fees.

Originally Posted by FenceFurniture

So it seems to me that the Govt just wants to catch "most" of the sub $1000 packages, and have the people overseas do their job for them.

The loss of GST on on-line OS sales to the govt in 2016-17 was estimated at ~$450 million pa.

The ATO itself says it anticipates recovering about $75 million pa (for the next 3 years) of that $450 million by targeting businesses with <$75,0000 business into Australia. That $75 million PA represents just 17% of the lost GST pa so it simply won't catch anywhere near most of the sub $1000 packages. The ATO is always optimistic about revenue so they may not even catch that.

There's no doubt there will be a horror story or two whereby someones $2 WWW (woodwork widget) will be held up and from here on any lost parcel etc will be blamed on the GST but overall I think folks maybe getting their nickers twisted for little or no good reason

Interesting that the Gov forced the freight forwarders to comply, but not AusPost.

Originally Posted by woodPixel

Interesting that the Gov forced the freight forwarders to comply, but not AusPost.

Australia post does have a freight forwarding business and that has had to comply.
Otherwise AP don't redirect goods or actually bring goods into Australia.