Seems Ebay is going to solve the problem for us under the guise of avoiding being a GST collection agent … not surprising in some respects …
Thanks for sharing @draughtrider. I imagine it was no great surprise to the powers that be either, but that’s just a personal opinion of course. If eBay blocks Australia from the global market, won’t this just empower VPN providers and other redirection services? I’d be interested in other opinions.
3 Likes
Yet another ill conceived knee jerk reaction 
that clearly conflicts with the Government’s claims of opening up the marketplace to competition. They are creating a protected market, which in turn will restrict the market’s innovation.
It is obvious that no cost/benefit analysis or any business case was prepare prior to this being pushed through. If there had been, it would be obvious that this will never achieve it’s aim, because the cost of collection far outweighs the intangible benefits that it was meant to produce.
Assuming any overseas seller is willing to act as a collection agency, how can buyers be assured that the GST collected will be paid on their behalf? How will any money collected be transferred to Australia? How will payment be linked to a purchase on arrival to Australia? How will it be reconciled? etc.
The marketplace has clearly shown that they want the option of buying goods online, and frequently from overseas. Most large online sellers will either ignore the requirement, or stop selling to Australia.
As I have said before, instead of just complaining (like Gerry Harvey does) that we are buying from overseas, it’s time that Australian retailers started developing their digital platforms so their inventories are available, attractive, efficient, effective, and competitive to buy from.
13 Likes
In addition to VPN we’d probably need a fresh Ebay and Paypal accounts. Paypal could be tricky as they validate addressing from memory, and might not like a delivery address outside your VPN country … and no doubt it would amount to an avoidance/countermeasure race.
I wonder if the legislation has provisions to make avoidance illegal? there’s probably some generic tax avoidance legislation they could fall back on …
2 Likes
Yes they do. I’ve just sorted out a problem with my Paypal account not functioning, due to address issues.
My delivery address had “New South Wales” as part of the address, which had worked just fine for years, but there must have been some update in the address checking database, and I had to change it to ‘NSW’ to be able to use my account again.
3 Likes
The articles says that eBay indicated that ‘He suggested it would take “several years” and a “very significant investment of human and financial resources in product development and administration” to comply.’
I find this very hard to believe. It is very easy to verify delivery address and charge GST on those shipped to Australia. Through PayPal or credit card purchases, this is even easier.
I suspect that eBays response is due to lower market share. Basic retail economics tells one that a 10% increase in price causes a loss in sales… the magintude of the loss depended on the customers perception of value of the goods being bought.
EBay would realise this and will be trying to keep its existing market share as is, that is, wothout GST.
It is also worth noting that new goods over $1000 attract GST. What has eBay being doing about this? I expect that they rely on the buyer to comply with the relevant GST/VAT laws whereby these laws apply to the seller and not the buyer.
2 Likes
1 Like
Just as I thought…wiping their hands of any responsibility and leaving it up to the customer to resolve.
Putting it on customs to levy the tax and the customer to pay it on collection of the goods puts some dollars into customs brokers’ pockets or requires the customer to learn the process. That is how tax is collected across many if not most borders.
Even in the US with each state having its own sales tax, online merchants are not obligated to collect those taxes unless they have a business address (physical presence) in the state of delivery. It is also on the selling merchant, not the market provider, so markets like ebay do not get involved in US taxes but Amazon, often being a fulfiller in its own right, does.
ebay systems are not designed for tax collection since they do not take payments for goods; money does not pass through their hand per se. They should be paying income tax on their fees, but that is another topic.
2 Likes
Yes exactly. I recently found a product I desperately needed on the US eBay site, not available anywhere else, and it stipulated “Does not ship to Australia”, so I tried to contact the seller but was also blocked from even contacting them.
Even though the sale said 5 available/488 sold, when I followed the link to “see other items” the sellers store was empty to me? I wasn’t just blocked from buying the item or contacting the seller, but I was blocked from seeing the item or any others he was selling from his store. My eBay rating is 100% positive so it was solely due to my location in Australia.
I then tried to access the US eBay site with a VPN, but because you still have to log in with an eBay account to interact in any way, I still got the same result.
So yes, you would also have to create a false account in the US, with a checkable US address and bank accounts, etc. Not an easy thing to do.
As a result, I am now looking at taking the design of this item (tool) to a local engineering shop and getting one made locally, at the risk of breaching some copyright law?
3 Likes
I agree @phb - some of the comments from ebay seem excessive!
Still, at CHOICE we are concerned about the lack of modelling and assessment of the tax changes by Treasury. For those interested, here’s the submission that CHOICE made on the GST changes.
I’ll also be speaking at a hearing of the Senate Economics Committee about the GST changes tomorrow. Any suggestions on the problems I should focus on with the Bill?
2 Likes
I can see how the government would expect large international businesses like eBay or Amazon to collect GST for purchases with Australian shipping addresses but do they intend to collect GST from small businesses or individuals selling directly to Australian customers as well? If not then larger businesses are being treated unfairly & if so, reconciliation would be a nightmare since I cannot see any practical way for GST to be collected from sellers that do not have a regular trade to Australia. If it reverts to the receiver paying GST on importation as currently occurs with purchases >$1,000 then consumers will likely be hit with a double charge, once for the GST then again for the processing fee that customs charges & quite often a handling fee from the shipping company to collect the payment. It’s typically $83 ($70 to customs + $13 processing charge for couriers like FedEx & DHL) which is significant for a $1,000 purchase & a blatant ripoff for smaller amounts.
2 Likes
Much of what we buy from overseas comes to us in a regional area via Aust Post. 
How is the collection of GST going to be handled in this situation? Does this mean the postie will become a tax collector, or will we have to go to the Aust. Post agency to collect all deliveries? If it is either of these, neither of these will be happy with the extra work unless they are recompensed.
Points to ponder:
- Many people (including me) who are disabled/aged/mobility challenged
etc use online to have home deliveries. If the goods are no longer delivered to our door due to the new processes, this will cause much grief, and will need to be addressed (pardon the pun). - Has anyone calculated the cost of collection in terms of on-costs (additional storage, additional handling, extra administration, etc.), what about the additional time/labour cost to actually process the payments for GST on all the goods?
- Are we going to be charged GST on any service fees for handling the GST collection (a double impost)?
- Has anyone calculated the break even point of cost of collection vs revenue earnt? On cheap goods tt will cost far more to collect the GST than will be collected.
- How will the logistics be handled differently in regional vs metropolitan areas (or will they just force the metropolitan system onto regional areas and cause inconvenience/hardship)?
5 Likes
Hi @ErinTurner , just wondering if you could check the link to the submission as I am getting a error 404 - File or directory not found.
As raised above, one of the main issues is that many overseas companies will push Australian buyers to be responsible for the paying of the GST on imported goods. This will be a disaster as it is likely to be complex and something a reasonable person could expect to do for small value goods (see @PhilT eBay link for example of the complexities when a retailer/vendor agent refuses to collect GST). It will also jam up customs at the point of entry if GST payment/verification is required prior to entry into Australia.
If a resolution for the seller/vendor agent charging GST can’t be found, then maybe the alternative may be for the GST to be charged by the financial institution the payment is made through…e.g. Paypal or the credit card company.
It should be relatively easy for the financial institutions/Paypal to work out whether an non-Australian payment has been made as they already do this cor credit card fraud…whereby they can suspend cards/transactions when a potentially unauthorised overseas transaction occurs.
GST could still be avoided by
- paying in cash (which overseas seller are unlikely to accept due to fluctuations in currencies)
- using bitcoins or other similar ‘world’ currencies (which has its own risks and not widely used).
- or setting up an overseas account could also be set up to avoid GST but this could also easily be tracked by the relevant government/financial institution as the money would most likely have to leave Australia electronically.
Hi @phb - the link is working on my end. It’s a PDF so may be weird on some browsers (?). You can download direct at choice.com.au/policy - it’s under 2017 submissions.
@meltam - that is a great point about mobility issues! And one I hadn’t directly considered.
1 Like
aarrrgh…getting the same error when I click on the link on the policy page…noting other links on the same page work. Have tried Chrome, Edge and Explorer and all three give the same response.
This is very confusing. I’ve just checked it on another computer and it is working for us. @BrendanMays - got any ideas here?
1 Like
@ErinTurner…my guess would be it might be the privileges setting on the document/folder document located on the Choice server. Might be set to internal users only.
Download working fine here (in the desert …)
1 Like
Indeed it will cost more, but that will just result in more money flowing into government coffers at the expense of businesses, or more likely the recipients when business starts charging for it.
1 Like
