Amazon to block Australians from using US store after new GST rules
Business (Australia) Amazon to block Australians from using US store after new GST rules
Restriction on US and international stores, which have cheaper prices and wider range, will come in from 1 July
Amazon will not ship overseas goods to Australian customers after new GST rules that target international retailers come into effect in July.
Amazonâs new rule, announced on Thursday, will prevent Australians from buying from the Amazon US store â" or any international Amazon stores â" which frequently have cheaper goods and a greater range compared with the Australian Amazon store.
From 1 July this year, Australian customers who visit an international Amazon store will be redirected to the Australian site, which has been running since late last year.
The move is a response to a new GST policy that will apply 10% tax to all overseas purchases under $1,000 announced by the Turnbull government last year in a bid to âlevel the playing fieldâ between Australian and overseas retailers.Australian retailers resilient as they face down 'Amazon effect' Read more
At the time, Amazon criticised t he policy for being unfair.
Although it supports the new GST rule in principle, it argues that delivery companies such as Australia Post should be made to collect the tax, not the stores.
âWe have had to assess the workability of the legislation as a global business with multiple international sites,â an Amazon spokeswoman said on Thursday. âFrom 1 July we will be redirecting Australian customers from our international Amazon sites to amazon.com.au.â
Some international products will still be available to Australians on a new platform called the global store, but the range will be much smaller. The global store currently has 4m items, compared with roughly 500m on the full American store.
Amazonâs ban applies to all shipments to Australian addresses, which means that even customers with VPNs (virtual private networks) that hide their location will be able to access an international site but not be able to ship their goods home.The giant is coming: the true cost of Amazon to retailers and workers Read more
If they want international products, Australians will have to send their purchase to an overseas address and arrange for it to be forwarded.
Since its launch in December 2017, Australiaâs Amazon store has not had the immediate impact that many predicted. Initial prices were criticised for being far too high compared with local competitors and international Amazon sites.
In February local retailers such as JB Hi-Fi posted record profits, saying Amazon had yet to provide serious competition in the industry.
An industry analyst, Kim Do, said Amazonâs underwhelming launch was due to an undeveloped supply chain. The global giant has only one distribution centre, in Dandenong in Melbourne, but has announced a second warehouse will be built in Sydney later this year.
A spokesman from competitor eBay said the rival online store would not block Australian customers, nor redirect them.
He said the company was working on a solution for 1 July that will âenable Aussies to continue to shop from all eBay sites, while also capturing the required GSTâ.
Labor MP Andrew Leigh said Amazonâs ban was âan utter embarrassmentâ for the treasurer, Scott Morrison. Like Amazon, the opposition supports the general principle but takes issue with the governmentâs model.
âLess purchasing choice means higher prices for Australian consumers at a time when they are struggling with record low wages growth and cost of living pressures,â Leigh said.
However, Morrison hit back at criticism in a statement, saying it was an issue of fairness.
âThe government doesnât apologise for ensuring multinationals pay a fair amount of tax here in Australia,â he said. âThat tax revenue is used to fund essential servic es.â
- Business (Australia)
- Retail industry
- Australian politics
- Share on Facebook
- Share on Twitter
- Share via Email
- Share on LinkedIn
- Share on Pinterest
- Share on Google+
- Share on WhatsApp
- Share on Messenger
- Reuse this content