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E-commerce

Amazon re-opens US site to Aussie shoppers

Amazon is allowing shoppers in Australia to buy items from its US site again after having built the “complex infrastructure” needed to comply with Australian GST laws.

The move reverses the online retailer’s previous decision to stop shipping items from overseas sellers to Australian delivery addresses, a workaround designed to avoid falling afoul of the new GST law that went into effect on July 1, which requires overseas sellers to charge and remit GST on low-value imports.

Back-flip

At the time, Amazon set up a new ‘global store’ where Australian shoppers could legally purchase a selection of items from overseas sellers, but customers were not satisfied with the limited range, and the move was viewed as putting a serious dent in the company’s sales.

An Amazon spokesperson said the decision to shut down Australians’ access to its international stores was difficult.

“Earlier this year, Amazon assessed changes to the Australian GST law as a global company with multiple international stores and, in order to remain compliant with the legislation, made the difficult decision to suspend exports from our international stores to Australia,” the spokesperson said.

“Following the announcement of these changes, we listened to the customer feedback and assessed how we could respond. Since that time, our teams have continued to focus their efforts on building the complex infrastructure needed to enable exports of low-value goods to Australia and remain compliant with GST laws.”

Eligible products only

As of November 22, Amazon now allows customers to buy ‘eligible’ products from its US site. These are products sold by Amazon itself. Customers can’t yet buy items from overseas third-party sellers, which offer the bulk of products on the company’s international marketplaces. Amazon is currently building the infrastructure to enable the export of these items to Australia.

This is in contrast to the approach taken by eBay, which has been compliant with the new GST law since July 1.

“As we said five or six months ago when the GST changes came into effect, we’re pleased Australians can continue to buy from any eBay site. We didn’t block Aussie buyers, redirect them or require them to pretend they are located overseas when shopping on eBay’s global marketplace,” an eBay spokesperson told IRN.

“Our solution allows for GST to be applied to all imported inventory, including third party marketplace sellers, unlike other marketplaces that still block those transactions. We have continued to work on this solution to enhance the buyer experience.”

Loopholes and problems

Prior to the implementation of the new tax law, the retail industry was divided on the best way to enforce the collection and remittance of GST on low-value goods. One possibility was for shipping companies like Australia Post to shoulder the burden at the point of entry, but the responsibility was ultimately given directly to overseas retailers selling into the country and marketplaces with overseas sellers on their platforms.

The Australian Retailers Association’s executive director Russell Zimmerman told IRN that his initial misgivings about this solution seem to have come to pass.

“When we were in front of the Senate committee some 12 months ago, we made it very clear that the model they came up with would have loopholes and problems,” he said.

“We know there are some retailers flouting the law and not actually charging and remitting the GST. We have seen examples of it,” he said.

Zimmerman pointed the finger at smaller overseas retailers that are turning over more than $75,000 a year in Australia, but not complying with the law. He clarified that larger players, such as eBay, Kogan and now Amazon, are not among those ducking GST.

According to Zimmerman, the government is planning to conduct a review of the tax that has been collected since the GST change early next year.

“I think what we’re going to find is a lack of compliance by retailers,” Zimmerman said.

The Amazon spokesperson said the company is working with the government on the “implementation and enforcement of the law to ensure it achieves its objective of a level playing field for all retailers and marketplaces”.

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