By Keri Algar
SYDNEY, NSW: Retailers hoping for a lowering of the $1,000 GST free threshold for overseas online purchases have been dealt a blow in the Productivity Commission's preliminary conclusions.
Significantly, the Commission has found that the average value of parcels entering Australia is under $100.
“Based on the preliminary evidence available to date, it appears that even a large reduction in the threshold may not necessarily have a significant impact on the number of parcels not subject to GST and duty,” said the report.
It lists a number of logistical reasons, such as the practicalities and costs of collecting taxes on small parcels and the knock on costs for retailers and consumers, for why even a large reduction in the $1,000 GST threshold might not beneficial for consumers or retailers.
The Future of Australian Retail, one of nine inquiries currently being undertaken by the Productivity Commission, released its first issues paper last week. It details Australia’s present retail landscape, challenges and future directions, to assist retailers and interested groups make their initial submissions.
The paper said that the extent of the impact from offshore online retailers is still unclear, but that Australian retailers could benefit from consumers’ preference for using domestic websites.
The Commission is conducting a three month trial by the Australian Customs and Border Protection Service to gather the information.