Discord over Government’s new GST plan

Australia Post

From 1 July, imported purchases worth under $1,000 will incur GST charges, though there is some disagreement in the market over who should be collecting it.

E-retailer Amazon has hit out at the government’s decision to have sellers, the electronic distribution platform or the re-deliverer – depending on the nature of the transaction – collect the fee. According to The Guardian, the company has suggested that the poor design of this ‘vendor model’ plan will result in an “inherent disincentive” to comply.

In a submission, Amazon queried why the Government ignored a recommendation made by a previous government taskforce, advising that a ‘logistics model’ – whereby Australia Post, express carriers and freight forwarders collect the GST – be used.

“Logistics providers already have infrastructure in place to collect information on goods coming into Australia and have well-established processes for GST collection for goods valued at more than $1,000,” it said in the submission.

Australia Post welcomed the vendor model chosen by the Government, asserting in its own submission that it would be the most efficient way to impose the task, and to require Australia Post to collect the tax would render its parcels business “unviable.”

The postal service voiced its support of the Turnbull government’s proposed GST plan but noted that it hopes the tax will be imposed one year later.

“Any proposal involving collection of GST under a model that requires collection at the border is likely to render Australia Post mail and parcels business unviable in the current market of continuing and significant decline in mail volumes that have put severe strain on the financial position of the corporation,” the national post service’s submission said.

It adds that the cost to the Federal Government of requiring Australia Post to collect GST – approximately $900 million – would more than cancel out the $300 million they could hope to raise with the levy.