Goods imported into Australia – often by consumers using the internet – which cost less than $1,000 are currently GST-free.
On May 3 2016, as part of its package of Budget Night announcements, the Federal government proposed that, as of 1 July 2017, this low-value threshold (‘LVT’) of $1,000 will be abolished.
The removal of the LVT will see many day-to-day purchases made by individuals (and businesses) over the internet from an overseas vendor being subject to GST (whereas, as stated above, they are currently exempt).
It is proposed that, as of 1 July 2017, overseas businesses with an Australian turnover of greater than $75,000 will be required to register for GST and collect GST on sales made to Australian customers.
Australian consumer advocacy group CHOICE has recently issued a press release where it raises the prospect that the Federal Government could use powers it has under the Telecommunications Act to force internet service providers to block websites of overseas businesses that do not meet their Australian GST obligations.
It remains to be seen if the Federal Government would deploy such tactics as part of its proposed removal of the LVT.