Australia Delays GST Payments on Online Purchases

Work meeting in photo agencyThe Australian Parliament approved a delay on a new goods and services tax (GST) payment on online purchases from abroad. The delay meant that shoppers will not be required to pay extra on items worth below $1,000 that they ordered from abroad until July 1, 2018.

Online Reprieve

The postponement of introducing the Treasury Laws Amendment (GT Low-Value Goods) Bill 2017 stemmed from the efforts of a bipartisan group of senators, which advised the government not to oblige eBay and Amazon among other online websites to impose taxes on products sales.

Online shoppers would have been forced to pay the 10% GST on low-cost goods from abroad beginning in July. The decision earned mixed reactions. Local retailers criticised the reprieve, saying it creates an unfair advantage for foreign online companies. The government had planned to implement the GST payment with an aim to provide equal opportunities for small businesses.

The topic of creating a level-playing field becomes relevant as physical shopping centres in the country might be forced to shut down due to online competition.

Safe for Now

Competition from online retailers doesn’t seem to be affecting shopping centres in cities, such as Sydney or Melbourne. A PR company or advertising agency can also help in maintaining the relevance of shopping at physical stores. Some businesses have even employed online strategies to keep up with the changing consumer trends.

Still, large shopping centres will likely weather the impact of online retail. A different fate, however, awaits small businesses in case online shopping becomes the norm in Australia.

Online shopping has redefined the consumer experience for many Australians. As the proposed GST payment will not be effective for the next 12 months, what online items do you plan to buy more? For sellers, are you using the right strategy to reach customers?