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 !

[south.coffee]

1. When you list an item with location outside Australia eBay adds to the listing "10% GST will apply" and adds it in checkout, collects the GST and remits it to the ATO. The item eventually arrives in Australia and is processed through the International Mail Centre in each state. How does Customs know GST has been paid or not paid ? There is no clearance number on the senders package.

2. The mega Chinese sellers who use fullfilment services and who's goods come in "container loads" would of course paid GST as the Bill of Lading must include a commercial invoice of valuation. The group of sellers below this who use consolidaters are packing their items in China, throwing them all in one box for each state and air freighting them.

(You can read all about Item Location mis-represntation in this thread I started back in 2014)

https://community.ebay.com.au/t5/Buying/SCAM-Chinese-sellers-misrepresenting-item-location-Equick/td...

3. As a private importer, we have not been charged GST on any consignment under $1,000 since the threshold was 'abolished' 1 July 2018. Our shipments are air freighted with Customs Clearance done by our Forwarding Agency. We also have goods shipped by EMS through Australia Post with supplier invoices in sleeves for Customs clearance and again, they sail through without GST being charged.

4. As the vast majority of overseas parcels come by mail, Australia Post does not have the resources to be tax collectors and how many parcels have an invoice attached or an accurate 'value' on the label ? (Watch any episode of Border Security and they are only interested in detecting drugs or bio-security threats, not GST collection).