GST free threshold.

[Scottz]

Storm still brewing over the GST free threshold.

 

http://www.smh.com.au/business/lew-hits-out-at-online-gst-rates-20121204-2as4h.html

 

See article from the Sydney Morning Herald you may be interested in.

I think there are lots of members like myself who have used the tax free loophole to import parts.

If the rules are changed, what do you think the impact will be?

 

I think while the AUD is high in comparison to the USD no one will kick up much of a fuss about 10% getting added to the cost.

EG: I paid USD278 for some parts in USA that would have cost me AUD1000 in Oz, plus USD60 for air freight.

If I had to pay 10% extra, I would still have imported the parts.

However if the AUD was back to the normal 0.6 to 0.7 (before the boom), 278+60 becomes a different figure, and then I might think twice before purchasing.

 

Anyone think it's worth running a survey to see if the Aussie customer will tolerate the GST free threshold being removed, or maybe cut back 50%?

The retailers are making noise about it, but honestly I do not think their sales are going to increase if the 10% was added.

There is simply too big a difference in retail price between USA and Aust', and our dollar is allowing us to access offshore supply.

 

Comments!

[Stivva]

I will just have every imported purchased labelled as a gift with zero purchase value and have it sent registered post.

No problem.

[nizm0zed]

Stivva, you'll find you wont be the only person who thinks of that, so there will be a lot more scrutiny of 'gifts' and people getting reamed when they are found to be cheating the system.

 

as for retailers figures increasing when this 'loophole' is closed? not going to happen. maybe a negligible amount, but the simple fact is that aussies in general are getting screwed seven ways from sunday with taxes and fees for everything you can think of, added into basics like petrol and electricity going through the roof.

retailers figures have dropped because people simply aren't spending as much money as before. its got nothing to do with whether they shop in a store or online.

[gav240z]

As mad as it might sound I actually support Mr Lew's view. In the EU you have to pay VRT (same as GST) on anything imported from outside of the EU. Small items like those under 100 euro don't usually get picked up, but larger items that have higher purchase costs do.

 

On the 1 hand it sucks for people with specialist vehicles where there is no local supplier or the locally available parts are not up to the same standard as those in a foreign country, but we have to support local business and prevent Australian dollars moving overseas.

 

What I don't agree with is the tax on 'second hand car parts' I think that's totally wrong and paying import duties on rare parts for old classic vehicles shouldn't be allowed. New parts however should attract the same GST as local goods.

 

My 2 cents.

[thriller]

Not a fan. If the extra money was somehow spent on making local purchases more desirable+affordable, I'd be feeling quite differently about it.

 

It's kinda funny, this and that is taxed because of yada yada, but the money will never reach this or that. 

 

E.g. carbon taxing/raised eleccy prices doesn't seem to be spent on making alternative/renewable energy sources more appealing.

[fluegel]

The thing that would really annoy me would be that anything that attracted GST would have to be picked up at the post office etc ,no more delivery to your door. I have been buying stuff by mail order/online for decades things I need for instrument making not available in Australia I seem to remember the threshold fo sales tax for many years was $1000 . In my opinion the threshold should be INCREASED especially to save paper work. Harvey Norman is the main winger yet he doesn't sell harpsichord strings or SU carby needles which have to be bought online anyway. The CEO of Coles Myer was threatening to not charge GST  some time ago, if all the powerful retailers agreed simply stopped charging GST on mass things could be interesting. As an aside often small retailers ,if they havn't got what I want ,tell me to go on line which is what they often do themselves for their stock.

[Scottz]

Agree - if gst is added it should only be for new manufactured items, not used / 2nd hand items.

Agree - adding the gst will not stop or slow down imports. The price difference is still too great, buyers will "shop around" and the internet has opened up new avenues of supply.

Agree - revenue from tax never gets to the industry that it targets. Roads don't get improved, emmissions are not reduced, damaged state assets are not repaired, etc...

Agree - like fluegel we are searching for items not available locally or incountry.

Agree - taxes are screwing us, and people are spending less because of it (and a few other factors). And as thriller has touched on, some taxes are user pay (hidden taxes), such as cost of water and electricity. Tax margin stays constant but cost per Kilolitre, Kilowatt, or whatever, increases under the assumption that hurting your wallet will make you a more efficient user. But as we have seen with the recent gold plating issue of electrical infrastucture, we the consumer are using less and still paying more. User cost for those government supplied (although deregulated) services is just another means of making revenue. It's a tax without calling it a tax.

But that's another story - back to gst for on-line purchases........

 

If the loophole is closed, will consumers spend less just to be happy knowing the tax office is the looser, or will we continue unchanged and cop another tax on the chin?

 

When fringe benefits tax was introduced in 1986 it created revenue for the government, pain for businesses, and a new business enterprise for salary-packaging. See link http://www.smh.com.au/small-business/entrepreneur/entrepreneurial-awards-go-to-fittest-20121202-2aoy1.html

Is there an opportunity to do something similar for administration and collection of gst added to on-line purchases, avoiding the nuisance of having to collect your purchase and do the paperwork yourself, as fluegel has mentioned?

 

Comments?

[Scottz]

This storm is still brewing. More noise from the retail sector:

 

http://www.smh.com.au/business/cut-gst-threshold-on-overseas-goods-myer-20121207-2azgs.html

 

 

[Whittie]

When the difference between online and local retail is 100%, 10% is not going to change buying habbits.

 

It's going to slow up customs and waste a lot of time and money, that is it.

 

Filling in a bazzilion forms to clear goods through customs is going to be a major PIA but when the difference is still 90%, woop-de-woop, retailers really need to start recognising that their old business models don't work!