Industry groups have welcomed the decision to close the GST loophole on overseas purchases.
The Australian Retailers Association said the decision of State Premiers and Treasurers to remove the Low Value Import Threshold (LVIT) for goods purchased from overseas was “necessary and overdue”.
The ARA was among industry groups to raise the issue of the LVIT and its $1000 limit and advocate for its removal in 2010.
ARA executive director Russell Zimmerman said the loophole had given international retailers an advantage.
“The LVIT has caused Australian retailers huge concern, and its abolition is long overdue. The removal of this archaic law is necessary for the growth and sustainability of all Australian retailers.
“While the ARA would prefer to see an earlier introduction date than July 1, 2017, we’re pleased that the threshold has been entirely scrapped, rather than merely reduced.
“Australian retailers will now be able to play in the global economy on a level field.
“We look forward to working with the Government on its implementation over the coming years,” he said.
The National Retailers Association CEO Trevor Evans also praised the decision.
“This is a fight the NRA began five years ago and has invested considerable resources into research and advocacy over that time. After all of this work, it is pleasing to see a win for the retail sector,” Evans said.
Since the LVT was thrust into the public spotlight in Christmas 2010, it has been the subject of various reviews including the Productivity Commission (2011), the Low Value Parcel Processing Taskforce (2012) and the GST Distribution Panel (2012).
“While the $1,000 threshold was introduced with the GST in 2000, the advent of online shopping has seen overseas online retail giants gain a leg-up in our system, while placing an unfair impediment on Australian retailers,” Evans. said.
“Coupled with the proposed action on the ‘Netflix tax’, it is pleasing to see the Government is now on the right track to restoring integrity to the GST.”