As reported in PhotoCounter last month (and the rest of the media this week!) the elimination of GST-free status for has been delayed 12 months and will not commence until July 1, 2018.
Hurdles have been placed in its way via Senate amendments from the ALP. There is now uncertainty as to how GST on goods under $1000 will be collected.
The Productivity Commission will deliver a report on the feasibility of alternative approaches, ‘and other relevant matters’ by October 31. The Commission will hold public hearings as part of its inquiry and make recommendations based on its findings.
At question is the current ‘vendor-hybrid’ model requiring retailers and retail platforms such as Amazon and Ebay to collect GST. The international retail giants have usewd their considerable weigh to push back on this, advocating for a ‘logistics’ model that would see Australia Post and freight forwarders collecting GST.
Given the energetically free-market, pro-globalisation culture at the Productivity Commission, there can be no certainty that its enquiry won’t lead to further delays or changes to the implementation of the legislation.
The Australian Retailers Association (ARA) congratulated Parliament for passing the Bill but said it is extremely disappointed that the legislation now won’t be implemented until next year.
‘Today the Australian retail industry received a big win, as this much-needed GST will significantly assist our local retailers when trading against our international counterparts,’ ARAS executive director, Russell Zimmerman said.
‘This new legislation will create a fairer tax system for Australian retailers who are currently operating in a tough trading environment.
‘We are disappointed there will be a 12 month delay before overseas retailers start collecting this tax, but we look forward to Australian retailers finally being given a fair chance. This legislation will mean our local retailers will be able to trade on the same level playing field as our international competitors.’
The ARA supports the ‘vendor hybrid’ model proposed by the government but ‘if someone can give us a better model that can be implemented effectively we’ll look at it.’