Recently, the Australian government has introduced a new GST legislation on the imported low value goods. The new legislation will be effective from 1 July 2018 and it will affect thousands of online platform overseas sellers whose annual GST turnover is over $75,000, such as Ebay, Amazon sellers etc. These overseas sellers under the new legislation will be required to registered GST and reporting their GST on a monthly, quarterly or annually return.
GST is a type of tax enforced by Australian government on the provision of goods and services. Once the business registers GST, it has to charge GST on the goods and services it provides which is 10% of the original price unless the goods or service is a GST free or input taxed item. Every month, quarter or year, the business needs to remit the collected GST on sales to Australian Taxation Office; in the meantime, it will also get credit of the GST charged on the consumptions. For those online platform overseas sellers, once they register GST, they will be requested to do exactly the same as described above except they choose simplified GST registration which cannot claim GST credit at all.
The new legislation doesn’t affect the old rule that GST paid at border on the imported goods over $1000. So that means the business doesn’t need to charge GST on the invoice when a bundle of goods valued over $1000 imported through custom and GST paid at border.
The government haven’t given explicit measure how to scrutinize the compliance of the overseas seller. However, some discussion is on stopping the IP address of the online seller if their GST is not complied, so they cannot continue to sell on the online platform to the Australian consumers. Some others argue that the online platform or other operators can charge and collect the GST on behalf of overseas sellers and remit to the Australian Taxation Office. No matter how, since the new legislation has been kicked in, overseas sellers had better to prepare for registering and complying the government’s request as earlier as possible to avoid the penalty notice from the Australian Taxation Office and business damage caused by blocking of IP address.
Pitt Martin Accountants and Tax Advisers are here to look after your business. If you think the new legislation might be affecting you and you are concerning about it, please feel free to call us on +61292213345 or email robert@pittmartingroup.com.au.
Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.
Experienced Tax Accountant and Business Advisor with a demonstrated history of working in the accounting industry. Skilled in Tax, Accounting, Business Advisory and SMSF. Strong entrepreneurship professional with qualification Master of Professional Accounting, CPA Public Practice, Registered Tax Agent, Registered ASIC Agent, NSW Law Society External Examiner, Trust Account Auditor and Diploma of Finanical Planning. Specialised in SME, tax planning and international tax, he helped client save ample money and create wealth.