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The price hike about to hit online shopping

GST 10% amazon trademe

In response to the continuous growth of online shopping, the federal government is attempting to level the playing field between Australian and overseas retailers.

If approved by parliament, from July 1, 2017, all goods purchased by Australians from overseas websites will be subject to the 10% GST. Previously GST was  charged only on overseas purchases above $1000.

What are the changes?
  1. : There are two main GST changes you need to be aware of. Firstly, 10% GST on imported goods worth less than $1000, and second 10% GST on electronic goods and services. Known as the “Netflix tax”, this will apply to digital streaming services including movies and music purchased online.
Where will they apply?

The new GST legislation will apply to everything you purchase online from overseas retailers. This includes clothing, electronics, media, toys, furniture and any other goods that sell for under $1000.

Purchases from Australian sellers will remain unchanged as GST is already applied to those items.

And there’s still a chance that if your favourite overseas retailer has no Australian presence, it  may choose to ignore the new legislation, as presently there’s no simple way for it to be enforced on businesses that operate entirely overseas.

How to track down the bargains

Before the GST changes come into effect, check out these four tips to maximise your online bargain shopping:

  1. Plan ahead and shop online now

Do some forward planning and shop online before GST is added on July 1.

  1. Support Australian small businesses

Find Australian online stores that may sufficiently substitute your international shopping requirements.

  1. Compare prices

Even with GST added, some overseas shopping sites might be cheaper than Australian competitors. Just be sure that the new GST add-on is part of your price comparison (if they will charge it).

  1. Share this information with your friends and family

Make sure your friends and family know about the GST change so they aren’t caught off guard.

The senate’s Economics Legislation Committee will report on this bill by May 9. It’s possible the legislation will not be passed, or may be delayed, but the government is aiming for a July 1 start date.

The new GST for online shoppers might not hurt too much: Price wars on the horizon

Some online retail business analysts think Australian retailers are overpriced – and clearly consumers do as well.

That’s why we might see:

So watch for some stiff price competition among your favourite online retailers in coming years.

Written by Liz Russell

Liz Russell

Liz Russell is senior tax manager at Australia’s largest online tax agent, etax.com.au.

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