Amazon with a wider presence across the world has blocked Australians from shopping on its international websites from July 1, 2018 onwards. The move came amid the Australian government’s decision of imposing new GST on online overseas purchases. According to the new rules which will be imposed from July 1, the online retailers have to apply 10 percent GST on all the online purchases being delivered to Australia from overseas. Presently, GST is applied only on the items whose purchase value exceeds AUD 1000 ($760).
From July 1 onwards, the Australian shoppers who will shop on Amazon’s international websites will automatically be readdressed to the local Australian site (http://www.amazon.com/). Amazon.com.au, which was launched in December 2017, has almost 60 million products on its site to be sold, as compared to approximately half a billion of products on its US site. Amazon also cut their profits in its Australia wing by rolling out amazon coupons for their customer. The online options of products for Australian customers will be relatively lesser as compared to the company’s international websites.
The company is regretting the inconvenience caused to its customers but has to abide by it. The new law will be imposed due to the regular pressures from local retailers in Australia such as Harvey Norman, Myer, JB Hi-Fi and David Jones, whose businesses have seen a major throwback due to online competitors. The traditional bricks and mortar sales also suffer from online competitors. The local retailers have being applying GST on all the online and store sales since ages; making their products relatively higher as compared to what being offered by Amazon.
Various customers are not at all satisfied by the Amazon move as they love shopping through its international websites which offers a vast collection of products. Some products were cheaper than on the local sites even after adding shipping cost to it. According to Darren Price, a Sydney-based tech writer and amazon customer said that Australia is an isolated country and Amazon does a great job by enabling consumers to have more variety. Mr Price further added that he spend almost $500 yearly on Amazon.com, mostly for computer components which are not available locally. He believes that many others like him will use package redirection services to get rid of blockage where orders received will be first delivered at the US addresses and then later dispatched in Australia.
According to data released by NAB research, the Australians spent about $25 billion on online retail in the 12 months ending March 2018. This constitutes approximately 8 percent of total retail spending with 20 percent of going to offshore traders. Amazon is not satisfied with the government’s move and believes that the delivery companies such as Australia Post, DHL and FedEx should be made responsible for collecting the tax instead of vendors such as Amazon and eBay. Earlier eBay also warned to block foreign sellers from its site if the new tax policy will be imposed, but later disclosed that it will be working with the government to collect GST on overseas sales without restricting any sellers.
The Australian Retailers Association Chief Executive Russell Zimmerman believes that the new GST law will play a fair game for the Australian businesses. It is important for multinational retailers to pay their reasonable share of tax and if they are not doing so they are taking away the profits of local retailers in Australia. A fair taxing policy will help Australian businesses to flourish.
Till now it seems the local Australian retailers have win the battle against the international companies by making good and services tax compulsory on the goods shipped in the country. But how the new upcoming GST regulation will impact the customers, the local vendors and Amazon itself will be clear only after the implementation of the law. Meanwhile, Amazon is taking all the adequate measures to provide the same shopping comfort to its Australian customers while remaining disgruntled with the government’s move at the same time. The Amazon global store will permit Australian customers to shop from over 4 million products on amazon.com.au that were earlier available on amazon.com only. This is in addition to the more than 60 million products that are already being showcased on amazon.com.au across 23 categories, including books, fashion, toys, and electronics.