Productivity Commission Inquiry- Collection Models for GST on Low Value Imported Goods (NNF 2017/195)

As the result of the legislation passed by Government that GST would be collected on low value imported goods effective from 1 July 2018 the Treasurer directed the Productivity Commission (the Commission) to undertake an Inquiry into collection models for GST on Low Value imported goods. In July 2017 the commission released its discussion paper in relation to the inquiry. The CBFCA has been involved in all of the inquiries and discussions that have taken place in relation to high volume low value goods and fiscal issues since 1998. In December 2005 after the introduction of the $1000 threshold the CBFCA commented to the then Australian Customs Service inter alia:

“The CBFCA perceives there will be variances in buying patterns and business arrangements as the threshold becomes more widely known with business and consumers. This will also affect cost recovery arrangements across other regulatory agencies and may require a different approach to cost recovery over and above the existing arrangements in all agency as it is apparent cross subsidisation will continue to expand. To this end it would be appropriate to review the manner, form and quantum of the cost recovery arrangements for the SAC to be reviewed towards the end of 2005/2006 financial year."

Suffice to say even with CBFCA follow up there was no review.

As to the intended or unintended outcomes it was clearly apparent to those who understood international trade that where we are today in terms of the increasing levels of Internet e-commerce, significant cross subsidisation between full import declarations and the SAC process, compliance as it relates to bio security and Customs, would eventuate.

While CBFCA members participate in the high volume low value arrangements they clearly do not participate at the same level as the express carrier industry and Australia Post. The CBFCA Commentary to the Commission is therefore about changing existing business processes to ensure transparency, uniformity and consistency as to policy and process, equity in compliance application, appropriate tax collection, appropriate cost recovery and cost efficient/cost-effective regulatory and business arrangements. All of which appear to have been overlooked or not understood in the clamour of providing for Internet commerce.

The CBFCA sees merit in the transport/intermediary collection model in meeting the above key requirements and has put forward to the Commission issues which it perceives need to be considered and understood in achieving those outcomes. The CBFCA commentary is available at…….

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