Australian Retailer Wants Level GST Playing Field

Mary Swire, Tax-News.com, Hong Kong

07 December 2010

The chief executive of Australia’s biggest department store has announced that the company is planning to offer GST-free shopping to its customers by setting up a China-based online shop. This has come about as the result of discontent at the government’s policy of not charging GST on certain online purchases, and the estimated AUD20bn in sales on overseas sites not being taxed.

Bernie Brookes, the boss of Myer, has said that other leading Australian businesses could follow suit, and so qualify for the GST exemption applying to foreign-sourced online purchases valued at less than AUD1,000. This will inevitably lead to job losses in Australia.

Online shopping has increased considerably this year as the Australian dollar hit parity with the US dollar for the first time since 1982, making many items on American websites considerably cheaper for Australians than buying in their local shops.

Several large retailers have demanded government action, such as lowering the current GST-free threshold. Assistant Treasurer Bill Shorten has said the government had no immediate plans to put GST on online shopping, but was looking at measures to crack down on those exploiting the loophole for financial gain.

The Myer's China-based website could be up and running by February, with goods ordered from the site packed and shipped from its hub in Shenzhen, southern China.

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