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

[character_parties_aus]

Just another loophole!

[clarry100]

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@everard6920 wrote:

^ 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?

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Yes indeed... very good point.

The only way I can see they could estimate it is to have ebay.AU (if that is their selling platform) provide reports of every foreign registered seller and if they have more than the $75K in AU sales in any one year then they request a GST payment from them.

However, if they sell from an independent website (eg AliExpress or AliBaba or similar) then they can't know.

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To quote the document above...

"Overseas suppliers that have an Australian turnover of $75,000 or more will be required to register for, collect and remit GST for low value goods supplied to consumers in Australia, using a vendor registration model."

[character_parties_aus]

ebays just the tip of the ice berg clarry and is but a  small dot in the ecommerce world.  the amount of stuff brought in from other places is huge. I would imagine the best way of checking though is for customs to keep their eye on volumes brought through by exporter - which with a bit of thought would not be that hard - and when the volumes / value go over a certain amount they perform further checks if GST not being paid. Job done.

[everard6920 · Accepted solution]

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@character_parties_aus wrote:

ebays just the tip of the ice berg clarry and is but a  small dot in the ecommerce world.  the amount of stuff brought in from other places is huge. I would imagine the best way of checking though is for customs to keep their eye on volumes brought through by exporter - which with a bit of thought would not be that hard - and when the volumes / value go over a certain amount they perform further checks if GST not being paid. Job done.

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I disagree, I think this would be near impossible - keeping records of everyone who sends something into the country would be a massive undertaking (unless technology improves to a point where handwritten names and addresses in hundreds of languages can be reliably scanned and recorded automatically). Otherwise, we'd all be waiting for our overseas mail for 10 years.

Maybe that woud work for large retailers, but it wouldn't work for small/medium retailers. It's too easy to disguise what you're sending as non-merchandise, and many countries don't even ask for ID when you send something overseas, so you could use 50 different names and addresses to send out your items. I mean, if I were them, that's what I'd do. Why on earth would I collect and send money to a foreign government? Would you? Sellers will do whatever they can to get around it.

Unless you're send out your goods emblazoned with your company's logo on the side of the box (a la Amazon), then it would be really difficult.

[everard6920]

I even thought about the possibility of the government issuing overseas retailers who have registered for GST with a code of some sort, which would be displayed on the incoming package.

However, you'd have the same problem: how do you differentiate between Sally's mum sending Sally (who's on holidays from the UK) a pair of jeans she forgot to pack, and actual merchandise from a store (and if that store turned over 75k)? Sally's mum wouldn't have a GST code, and anyone who didn't want to register for GST could pretend to be "Sally's mum" rather than a retailer.

[clarry100]

I agree that collection overseas at the point of dispatch would be almost impossible to implement and manage.

If its going to be done at all I think it needs to be done at the point of arrival as is the case now for anything over $1000 in declared value.

However, since the cost of collection would outweigh the GST itself, on packages under $1000 then a collection fee would have to be charged as well. Let's say $15 eg.

And this would even include Sally's mum sending the jeans, but this could be subsequently claimed back by showing some form of evidence that it was indeed Sally's mum sending the pair of jeans that Sally forgot to pack.

[digital*ghost · Accepted solution]

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@character_parties_aus wrote:

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.

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Unless the Australian business that's doing the importing isn't registered to collect GST (I'm not, so at the moment I keep all of my imports below $1k, but that may change depending on how this gets handled). 

Instead of all this faffing about the government is doing, all they need to do is come up with a quick-scan and billing system. 

A package arrives in Australia, customs scans a QR code, that code contains contents, value, and purchaser data. If they're only going to get OS businesses with a 75K turnover (in Australia) to collect or qualify as attracting GST, then the code can contain supplier data as well. 

Customs, duty and GST- if applicable -  is automatically calculated and billed to the purchaser.

If a package marked as merhcandise comes in without a QR code, the details are entered manually.

How can they not consider a system like that, while instead deciding just to target the big players and go galavanting all over the world to convince them to play along... Oh wait, government + free world travel and a waste of time & money.... 

[*tippy*toes*]

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@digital*ghost wrote:

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How can they not consider a system like that, while instead deciding just to target the big players and go galavanting all over the world to convince them to play along... Oh wait, government + free world travel and a waste of time & money.... 

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In my neck of the woods, that's known as WoFTAM.

Spoiler

The F isn't the second letter of "of".

[character_parties_aus]

What they need to do DG is spend their time on something which is productvie rather than pandering to Gerry Harvey.

It's not going to be a big revenue raiser  its already provied costly to implement and proven likely not to work.

How about getting ebay to pay some tax instead? There's 300m problem solved.

[airshark3d]

I just had a meeting with a representative of the ATO 3 weeks ago about a different matter and was able to ask this question. As of now, even he doesn't know how they plan to do this but his "unofficial" opinion is, that they would be charging GST through the sale exchange platform. Meaning, Ebay would probably be collecting the GST for all sales. If you then, are a bonafide Australian seller (with ABN) then you can register for GST then you can use it as your GST credits. If you are a chinese seller with no ABN and GST, then tough luck, you just have to shoulder the cost. I think their problem is getting those chinese sites (not Ebay) to comply. Worst case scenario, they would probably make it hard for their customers (charging them $15 processing fee) so that they would have to either accept the terms, or accept to lose a lot of customers from Australia.

IMO, if you are planning to run a business, it would be beneficial to register for GST from the start. That way, you get used to the cost and process. I wish I did. I lost a few clients before(to my other business, not ebay) as I had to increase my sale price to accomodate GST. Also, a business with less than $75,000 turnover wouldn't be considered by me as a full-time business anyway, with the cost of living in Oz now (unless your profit margin is 75% or higher) so if ever you decide to run a profitable ebay business full-time, you would register for GST anyways.