GST Low Value Goods Bill 2017 (NNF 2017/037)

Yesterday the Government introduced into Parliament its Treasury Laws Amendment (GST Low Value Goods) Bill 2017 (the Bill) where the Treasurer, in the Second Reading Speech to the Bill, stated inter alia:

“As a result of the reforms being introduced today, low-value goods imported by consumers will face the same tax regime as goods that are sourced domestically. This is how a fair and modern tax system should work and I am proud that Australia is taking the lead in this respect…

...Under the current GST law, GST will generally apply to supplies of goods within Australia regardless of the value of the goods. However, supplies of goods located outside of Australia will generally not be subject to GST. Further, while the importation of goods is generally subject to GST, a $1,000 low-value threshold exemption applies…

...The GST low-value threshold exemption disadvantages Australian businesses and jobs, and poses a growing risk to the integrity of the GST base, with the continued growth in online shopping.

...Under these new arrangements, imported goods with a customs value of $1,000 or under will have GST collected at the point of sale, using a vendor registration model. Under this model, overseas vendors that have an Australian turnover of $75,000 or more will be required to register for, collect and remit GST on low-value goods supplied to consumers in Australia as well as any other taxable supplies they make…

...In August 2015, the Council on Federal Financial Relations agreed to the vendor registration model, commencing 1 July 2017. The government has also consulted extensively on the design of the registration model. Public consultation on the draft legislation was also undertaken last year...”

Details in relation to the Bill, Explanatory Memorandum and the Reading Speech are available through the referenced link HERE.

It is interesting to note in the Reading Speech the following:

“In August 2015, the Council on Federal Financial Relations agreed to the vendor registration model, commencing 1 July 2017. The government has also consulted extensively on the design of the registration model. Public consultation on the draft legislation was also undertaken last year.”

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Representatives from the Treasury, the Australian Taxation Office and the Department of Immigration and Border Protection interfaced with industry to address the vendor registration model however, these discussions were undertaken “at the death” (24 November 2016) and again in January 2017. The CBFCA responded to, and participated in, the discussions and provided a commentary as to the perceived difficulties in relation to the process proposed. What is interesting to note is that the decision was taken in 2015 to use the vendor registration model however, discussions were not held with key industry associations until two (2) months before the Bill was to be introduced to Parliament. One can only surmise the reason as to the lateness of the consultation perhaps being about not wishing to hear what may be the practical deficiencies of the process, rather than trying to determine ways and means to ensure cost effective and cost efficient administrative arrangements. It will be interesting to watch the development of these arrangements over the coming years.

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