Interesting Read About GST Collection from Overseas Sellers/Websites

[clarry100]

Wonder how they intend to enforce collection of GST from the 1000's of Chinese-based sellers who continually flood the ebay.AU site with inferior cheap products and knockoffs.

Shut down/block ebay.AU if they don't comply???

I can just see all the Chinese sellers saying yep no worries we will increase all our prices by 10% and send you a GST cheque each quarter -- NOT.

https://www.choice.com.au/shopping/online-shopping/buying-online/articles/gst-overseas-website-block

[everard6920]

This from a government that couldn't even ensure the security of the Census website.

It's not going to happen, I'm afraid. It'd be an absolute nightmare to implement.

The way I see it, the government has a few options. None of them are easy to implement:

1. Block the websites/sellers who don't comply (as above). People will use VPNs to get around the blocks, and good ole email ordering (send the seller an email and order goods, rather than buy from the blocked site).

2. Get Visa and Mastercard on board, and get them to apply it at the point of purchase. IIRC, they've already said no, and people could still bypass this using international money orders, anyway.

3. Implement the same system used for shipments over $1000 - you get a bill and you go and pay it. I think it has been concluded that the cost would outweigh the revenue to do this for shipments under $1000, though.

There's a reason that this has never been implemented - because it's too costly and too difficult. I just don't see this happening without major problems.

[clarry100]

---

@everard6920 wrote:

3. Implement the same system used for shipments over $1000 - you get a bill and you go and pay it. I think it has been concluded that the cost would outweigh the revenue to do this for shipments under $1000, though.

There's a reason that this has never been implemented - because it's too costly and too difficult. I just don't see this happening without major problems.

---

I like your #3 option the best. That way there is no blocking of websites necessary at all. People can still buy if they wish.

If they did it this way but then put a processing fee in place to offest the collection costs, for declared values under $1000.

Let's say a $15 fee for example.

That would almost certainly stop the buyers who buy the $2.00 items from Chinese sellers because suddenly the price is +GST = $0.20 +fee = $15.00. Then the $2.00 item costs $17.20 into the buyer's hands.

Is it the UK who has the collection fee model in place???

[ircinic-7]

Charge eBay 10% extra for all those shi**y OS sales.

They of course pass it onto the sellers.

 A hike in their fees, could bring them into line for a more even playing field.

[clarry100]

---

@ircinic-7 wrote:

Charge eBay 10% extra for all those shi**y OS sales.

They of course pass it onto the sellers.

 A hike in their fees, could bring them into line for a more even playing field.

---

Do you mean the govt legislates to make ebay.AU forcibly collect GST from any seller who is registered outside Australia but listing items for sale on ebay.AU?

[digital*ghost · Accepted solution]

This is such a backwards-thinking way of implementing GST on imports, and another stupid example of the "big stick" method. If the government wants outsiders to bear the costs and burden of collecting tax from Australians on their behalf, the least they could do is give them a proper incentive, rather than threaten consequences. 

Not to mention that near as I can tell, this method will just have a similar effect on overseas sellers that it does on Australian sellers (i.e. small and micro businesses can be a little more competitive with their larger counterparts by not having to charge and collect GST), so I see no real benefit to Aussie sellers except in cases where the items will become more expensive OS from everyone who is making it available to Aus consumers (on the presumption that the majority of OS purchases are speacialty items, or based on price, which can still be purchased cheaper from a business that isn't turning over $75k). 

Trying to figure out who the laws should apply to, who should be blocked etc etc etc just seems like a massive waste of time, or maybe just hot air, not to mention there's a world of technology out there that could simplify and streamline the whole darn thing if the gov't would just get with the 21st century already.   

[character_parties_aus]

The law will only apply to consumers just to further complicate the issue.  So for someone like me, a business that regularly imports $999 worth of stuff there is no change and even if there was I just claim back the GST on larger imports as I do now. More admin basically. I actually dont care if I pay the GST or not as there is just the cashflow consideration to consider there is no net change to my cost of sales unless import freight costs rise due to additional admin burden.

I can see a huge spike in people setting up ABN's and registering for GST.....

There are so many ways to get round this its unreal, it appears to be uninmpementable. Surely there are smarter ways to raise $300m which is a drop in the ocean in the big sheme of things. Or do they just want to appease Harvey Norman and annoy Kogan?

I'll just buy anything through my business, import it and write it off. Another way round it. If I can think of two ways in 3 minutes there is going to be a long list of avoidance tactics. Lots of overseas retailers will be advertising "10% reduction for ABNholders" and so on.

Such a waste of time.

[everard6920]

I import my stock too, and it's not paying the GST that bothers me (although I do find it unethical paying GST on items that have no association with Australia). It's that you know they're going to do this in a way that'll be annoying and/or costly to the consumer.

And the $300m revenue is before costs. So it's actually going to be less than that. The government hasn't released any information about how much any of this will cost.

[character_parties_aus]

The Goverment have released costings buddy see link below. And as you'll see the 'profit' is negligable in the short to medium term. It's all to do with the likes of Gerry Harvey and nothing else. I probably actually benefit from the GST addition as many of my competition are much cheaper than me as they sell abroad and dont have this cost. I still think it's a beyond stupid idea though. Still Gerry Harvey can clearly afford to buy the treasury department more expensive bottles of wine than I can. Snouts in the trough and all that OINK OINK!

Budget 2016-17 - Budget Paper No. 2 - Part 1: Revenue Measures - Treasury

[everard6920]

^ Thanks.

It's been a very long day so forgive me if I'm overlooking something really obvious, but my other question is, re: blocking: how are they going to know who has a turnover to Australians $75k+, and who doesn't?

Are they expecting to gain access to the financial records of every overseas seller who sells to the Australian market, or what?

Are they just going to guess, and block accordingly?