UPDATE – GST on low-value imported goods

Update

The Treasury Laws Amendment (GST Low Value Goods) Bill 2017 has been passed with amendments and now awaits assent. The amendments delay the commencement of the Bill until 1 July 2018 and refer the Bill to the Productivity Commissioner for review.

Review by Productivity Commissioner Under the Senate amendments, the Bill is to be referred to the Productivity Commissioner for consideration of matters including:
• the effectiveness of the amendments proposed by the Bill
• whether models other than that adopted by the Bill might be more suitable for collecting goods and services tax on offshore supplies of low value goods, and
• any other matter relevant to the implementation of the Bill.

Previous article –
May 1 2017

A Bill introduced into Parliament in February proposes to make Australian goods and services tax (GST) payable on supplies of items worth less than A$1,000 (known as “low value goods”) that consumers import into Australia with the assistance of the vendor who sells the items. For example, GST would apply when you buy items worth less than $1,000 online from an overseas store and the seller arranges to post them to you in Australia.

Under the proposed measures, sellers, operators of electronic distribution platforms or redeliverers (such as parcel-forwarding services) would be responsible for paying GST on these types of transactions. The GST could also be imposed on the end consumer by reverse charge if they claim to be a business (so the overseas supplier charges no GST) but in fact use the goods for private purposes. If the Bill is passed, the measures would come into force on 1 July 2017.
TIP: The ATO has also released a Draft Law Companion Guideline that discusses how to calculate the GST payable on a supply of low-value goods, the rules to prevent double taxation of goods and how the rules interact with other rules for supplies connected with Australia.

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