GST Exemption on Imports less than $1000
11/01/11 13:38 Filed in: Business
NetMates has been a reseller of Netregistry services since we began our hosting services over 7 years ago. We have always enjoyed a healthy and profitable relationship.
This blog entry was posted on their website today. http://www.netregistry.com.au/blog/1000-import-gst-exemption-small-businesses-are-the-real-sufferers/
I posted this following response in the comments on that page. As yet it has not been published by them.
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I am surprised and disappointed that NetRegistry would come out on the side of the retailers. Gerry Harvey has suffered a huge backlash for his whinging about this issue, including boycotts of his businesses. And for good reason! Small business does not like big business telling them how and where to spend their money, or run their business. Why would NetRegistry invite that sort of backlash against themselves? Trust me it will happen! I for one make this commitment:
I WILL STOP DOING BUSINESS WITH NETREGISTRY UNLESS IT PUBLICLY RETRACTS THEIR SUPPORT FOR THE COALITION OF RETAILERS TRYING TO PRESSURE THE GOVERNMENT ON THIS ISSUE!
There are some key factors that seem to be not included in this debate:
About the Author.
Dave Lord is the owner of NetMates, and also a successful Brisbane Entertainer (Comedian / Magician)
This blog entry was posted on their website today. http://www.netregistry.com.au/blog/1000-import-gst-exemption-small-businesses-are-the-real-sufferers/
I posted this following response in the comments on that page. As yet it has not been published by them.
-------------------------------
I am surprised and disappointed that NetRegistry would come out on the side of the retailers. Gerry Harvey has suffered a huge backlash for his whinging about this issue, including boycotts of his businesses. And for good reason! Small business does not like big business telling them how and where to spend their money, or run their business. Why would NetRegistry invite that sort of backlash against themselves? Trust me it will happen! I for one make this commitment:
I WILL STOP DOING BUSINESS WITH NETREGISTRY UNLESS IT PUBLICLY RETRACTS THEIR SUPPORT FOR THE COALITION OF RETAILERS TRYING TO PRESSURE THE GOVERNMENT ON THIS ISSUE!
There are some key factors that seem to be not included in this debate:
- The removal of the exemption for GST on imported goods of less than $1000 will not make any difference to whether people will import rather than shop locally. I regularly source imported goods and services at a cost of as little as a quarter of the local price. So if I had to pay an extra $2.50 GST for a $25 item that would cost me $100 in Australia, do you really think I will buy it here?
- One significant reason that the government does not collect GST on imports of less than $1000 value is that it is not worth their while for them to do so. The cost of assessing, collecting, processing and policing the tax makes it not economically viable.
- The government does not miss out on collecting the GST for imported commercial items of less than $1000 value which are then resold in Australia. If those goods are imported to be resold, and the retailer is GST registered, then the government will still collect the GST on the final sale price. GST is added at point of sale at 10% of the full retail value. The only difference is that the importer does not claim an input credit for GST already paid. So the end result is the same, and the government gets exactly the same amount of GST. So of that 1.5% overseas online sales, only goods imported by individuals for private use and micro-businesses who are not GST registered are escaping paying the GST.
- The exemption from paying the GST on low value imports is not only related to online overseas sales. This provision also applies to overseas telephone sales, mail order and duty free shopping while traveling overseas. I would like to know why Netregistry (et al) is targeting only online sales? Is duty free shopping your next target? So Larry Bloch, are you inferring that duty free shopping should lose its exemption too?
About the Author.
Dave Lord is the owner of NetMates, and also a successful Brisbane Entertainer (Comedian / Magician)