GST on low value goods update (NNF 2017/136)

 
Further to NNF 2017/133 Treasury Laws Amendment (GST Low Value Goods) Bill 2017, the following information has been provided by the Australian Border Force and is forwarded for your attention.

"The implementation of GST on low value imported goods was discussed at the CAG meeting on 20 June 2017 after the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 passed the Senate. We can now advise that the legislation has passed Parliament and will come into force once it receives Royal Assent. The Bill is likely to receive Royal Assent before the end of July.

Please find below an extract of advice Treasury has recently provided to stakeholders who had participated in the consultation conducted on the Bill. You will note the strong advice from Treasury that the vendor collection model is not conditional upon the outcome of the Productivity Commission review, and that businesses should start preparing for the changes now.

Dear stakeholders,

As you may be aware, the federal Parliament today passed the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 with amendments. See the Treasurer’s Media release.

Under the legislation passed by the Australian Parliament, from 1 July 2018, suppliers, online marketplaces and redeliverers with an Australian GST turnover of $75,000 or more are required to register, charge, report and remit GST on sales of low value goods to consumers in Australia (vendor collection model). High value goods (with customs value greater than $1,000) will continue to be taxed at the border.

As per the legislation, the vendor collection model will commence on 1 July 2018 and is not conditional on the outcome of a Productivity Commission Inquiry that is required to report on 31 October 2017. The Treasurer, the Hon. Scott Morrison, clarified in his speech to Parliament today that the Government’s policy is to implement the vendor collection model as legislated and that businesses should take the actions needed to implement it on the basis of the vendor model. The Treasurer went on to say the Government will not look kindly on businesses that in 6 months’ time say it is too difficult to implement because they have not prepared for compliance by 1 July 2018.

With regard to the ICS changes, the additional fields and GST exemption code are available in the test environment and have been for some weeks. While the additional fields are also visible in the production environment, the GST exemption code of “already paid” will not be available in the production environment until the commencement of the legislation in 2018.

Given the availability of the fields in the test environment, and the advice from Treasury above that businesses should start preparing for the vendor collection model now, the Department encourages you to commence work on your required preparations for these changes and advise your members, where applicable, of this advice.

If you have any questions about scenarios where GST may or may not be payable on low value goods, you can contact [email protected]."