Changes to GST on low value imported goods
The Australian Government has introduced the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 into Parliament on 16 February 2017, with the intention of implementation on 1 July 2017.
The bill will introduce GST on the sale of low value goods into Australia from overseas retailers. Low value goods are considered to be AUD$1,000 or lower and will affect all overseas retailers including those who use direct shipping from outside of Australia. As a result, any overseas suppliers who sell goods to Australian residents for more than $75,000 every year will need to register and account for GST with the ATO by 1 July 2017 under the 'vendor registration model'.
The government has also determined that regardless of whether there are more or less than $1,000 worth of items purchased in one order, all items will be assessed individually as to whether they are low value goods and then GST will be applied accordingly.
Non-resident retailers will need to determine the following before 1 July to avoid any penalties from the ATO:
1. Who is liable to pay the GST on the Low value goods?
2. Do the Terms and Conditions need to be updated with the customers and carriers?
3. Will the pricing of the goods sold online need to include the GST at each item or only at the check-out when delivery location of Australia is selected by the customer?
4. Whether they will need to register for GST with the ATO.
As this bill will take effect on the 1 July 2017, Non-resident retailers will only have less than four months to determine the effect of the bill on their business and whether they are required to register for GST.