Ebay crackdown on seller location cheered by some

Heather McIlvaine

11th Jul 2018

Some Australian sellers are rejoicing over an unexpected side effect of Ebay’s enforcement of the new GST law, which went into effect on July 1.

The new law, which requires overseas sellers to collect GST on Australian orders valued under $1000, has closed a loophole that many say gave foreign sellers an unfair advantage over local businesses.

Debate in the lead-up to implementation of the law largely fell into two camps: those who touted the benefits of global trade, and those who voiced their support for local businesses.

Ebay initially said it would be impossible for the marketplace to enforce the law, but ultimately developed the technology to do so ahead of the July 1 deadline.

This has given some Australian sellers reason to celebrate, but not for the reason you might expect. Rather, they see the enforcement of the new GST law as a “catalyst” for Ebay to finally crack down on international sellers misrepresenting themselves as being based in Australia.

“This has been a large issue for Ebay sellers, as the the ‘AU location’ improves conversion and sales greatly. The international sellers shouldn’t be doing this, as it impacts the local sellers,” said Nathan Huppatz, CEO of costumes.com.au and a volunteer member of the board of the Professional eBay Sellers Alliance (PeSA), which engages with Ebay’s senior management in Australia to advocate on behalf of sellers.

Nathan Huppatz, CEO of costumes.com.au and volunteer member of the board of PeSA

“We had been pushing Ebay for years to do something more about it. With the GST changes, it looks like this might be the catalyst for some action,” he said.

A week-and-a-half after the implementation of the new law, Huppatz said PeSA is encouraged by Ebay’s action so far. He credited the company’s new senior director of B2C, Kristian Haigh, as playing a key role in the recent changes.

Ebay Australia provided the following statement to PeSA to share with sellers:

eBay has deployed technology that identifies disparities between item location and the actual shipped from location. As a result, we have a list of sellers which is updated weekly, who are being contacted and told to change their item location. These sellers have been warned we will not tolerate item location misrepresentation and a clear consequence path has been outlined. Sellers that fail to comply may be removed from the platform.

It doesn’t matter if a seller is shipping directly to a consumer or to an Australian based distribution centre, GST will be collected at the point of sale by eBay or at the border by the seller and remitted to the ATO.

As a result of the recent GST changes we continue to work with our global product teams and regulators to enhance the buyer experience and tax compliance. From 1 July, eBay will also be accepting and investigating reports from the Australian Taxation Office of sellers that are misleading about a product’s item location – which again, may lead to a range of actions by us and or the ATO.

Should buyers or sellers have any concerns about item location misrepresentation or compliance with GST regulations, we encourage them to get in touch with eBay and/or the ATO.