Amazon blocks Australia from its United States site due to new GST rules
- Author: Darren Santiago Jun 02, 2018,
Jun 02, 2018, 10:47
It may also benefit Amazon's main rivals, from California-headquartered online market eBay to smaller Australian merchants which had campaigned to have the GST apply to all goods shipped from overseas.
The online retail giant said it would redirect Australians to the newly launched Australian site once the 10 percent Goods and Services Tax (GST) was applied to imported online goods worth under A$1,000 ($756) from the start of the 2018-2019 financial year.
In an email to customers today, the company said from 1 July it would redirect Australian shoppers from its worldwide sites to amazon.com.au where products sold by Amazon US will be available on the new global store.
From 1 July Amazon will redirect Australian browsers away from its amazon.com site in response to GST changes introduced by the government.
Media reports said the other major online retailer, eBay, would not follow Amazon and apply the new tax in the interests of consumers purchasing goods from its website.
"We have had to assess the workability of the legislation as a global business with multiple worldwide sites", a spokeswoman is reported as saying.
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Amazon said it regretted the change which it blamed on the new tax rules.
It is understood that Amazon baulked at the massive administrative burden of tracking Australian GST from all overseas transactions.
But even with the changes, the number of products available will be a fraction of what's on sale globally. Hundreds of thousands of customers will lose access to their ebooks on July 1st because Amazon does not allow customers to transfer Kindle purchases from one country to another. Most Australians have decried the Amazon.com.au store as being inferior to the USA store, with a considerably thinner product catalog and higher prices.
Treasurer Scott Morrison said the new laws "level the playing field for Australian businesses".
Amazon says its Australian unit offers 60 million products in 23 categories, compared to the more half a billion products on its USA site. "That tax revenue is used to fund essential services", the spokesperson said.
A Productivity Commission inquiry concluded that given the decision to collect GST on low value imported goods, "the legislated model is the most feasible among the imperfect alternatives at this time".