Location loophole lets Chinese sellers avoid GST - disadvantaging Australian sellers

[offroad7400]

With the abolition of the $1,000 threshold on GST for imported items, the item location representation lets large overseas sellers avoid GST.

eBay collect GST on items purchased from overseas sellers and remits the 10% to the ATO on behalf of the buyer.

Chinese sellers who are drop shipping items in bulk could be exploiting a GST loophole to make their items cheaper which disadvantages local sellers who have paid GST on their goods.

We know for a fact that bulk shipments are not being charged GST at the border if the consignment is under the old $1,000 threshold which is how the Chinese drop shippers operate using local fullfilment services in every capital city.

Online marketplaces like eBay, Amazon and all the big overseas retailers have to collect GST on overseas sales or they cannot operate here now. (The ATO does not have the capacity to police the smaller sites).

So if sellers make the item location 'Australia', eBay will not charge the buyer GST, in effect this is tax avoidance and maybe the ATO need to be made aware of this.  Jerry Harvey won't be happy !

[kopenhagen5]

Have you written to the ATO ?

If so, what was the response ?

[imastawka]

I bought 4 things from an Aussie based Chinese seller yesterday.

I know they are Aussie based because I've bought from them before.

The 4th item I was charged GST and the item has a longer delivery date.

Obviously that one is coming from China.

So he's got it sorted and not ripping off the ATO

And I wish people would stop bringing Jerry Harvey into it.

[repentatleisure1952]

" Jerry Harvey won't be happy !"

Neither will Gerry.

[imastawka]

I still wish people would stop bringing Jerry/Gerry Harvey into it

[lyndal1838]

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@offroad7400 wrote:

With the abolition of the $1,000 threshold on GST for imported items, the item location representation lets large overseas sellers avoid GST.

How do you work that out?

eBay collect GST on items purchased from overseas sellers and remits the 10% to the ATO on behalf of the buyer.

Chinese sellers who are drop shipping items in bulk could be exploiting a GST loophole to make their items cheaper which disadvantages local sellers who have paid GST on their goods.

Yes they "could" be exploiting a GST loophole but what proof do you have that they are doing so?

We know for a fact that bulk shipments are not being charged GST at the border if the consignment is under the old $1,000 threshold which is how the Chinese drop shippers operate using local fullfilment services in every capital city.

How do "we" know that bulk shipments are not being charged GST at the border?

Surely you don't think the Chinese sellers send hundreds of parcels worth less than $1000 to avoid GST.  Customs would soon put a stop to that.

The Chinese sellers actually import their stock in container loads which are charged GST and other import charges before the items even get into the country where they are sent to the warehouse for distribution to buyers.

Online marketplaces like eBay, Amazon and all the big overseas retailers have to collect GST on overseas sales or they cannot operate here now. (The ATO does not have the capacity to police the smaller sites).

So if sellers make the item location 'Australia', eBay will not charge the buyer GST, in effect this is tax avoidance and maybe the ATO need to be made aware of this.  Jerry Harvey won't be happy

If you are so sure of this GST avoidance I suggest you contact the ATO yourself.....they will be very impressed I'm sure.   Nobody would have thought of this loophole in all the time the rules have been in place for low value imports.

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[imastawka]

We know for a fact that bulk shipments are not being charged GST at the border if the consignment is under the old $1,000 threshold which is how the Chinese drop shippers operate using local fullfilment services in every capital city.

GST is charged on all imports.

Under $1000  means nothing anymore.

[padi*0409]

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@imastawka wrote:

GST is charged on all imports.

Under $1000  means nothing anymore.

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Not quite Stawks, if a seller has a threshold of less than $75,000 of imports to Australia and you buy privately off them there is no GST if the item is worth less than $1,000.

Spoiler

..........but I knew you knew that................

[imastawka]

And I thought this forum was specifically ebay.

That's why I answered the way I did.

Ebay collects the GST.

[padi*0409]

Hahaha, I'll go back to knitting instead of nit-pickin' Stawks.