Australian GST change: How to still save with online shopping

Angus Kidman 21 August 2015


Changes to GST rules will push up prices. Here's how to keep the bargains flowing.

In Australia, everything that is sold to consumers is supposed to have 10% goods and services tax (GST) added. In reality, to date there has been an exemption for anything imported from overseas which costs under $1,000. The main reason? The cost of collecting that tax was calculated to be higher than the revenue it would bring in.

Despite that, local retailers have long complained that the low-value import threshold (LVIT) gives an unfair advantage to online stores overseas. And now it looks like that rule is about to change. A meeting of State premiers and Federal Treasurer Joe Hockey today agreed that the exemption should be eliminated as of July 1, 2017.

After that date, any goods imported into Australia will need to have GST applied, either by the original merchant or by forcing consumers to pay GST before they can receive their goods. The practical details will need to be worked out before the law change is implemented, but options would include paying on collection from a post office or courier, which is likely to introduce an additional processing fee as well. GST will also be applied to digital goods such as music downloads or your Netflix subscription from July 2017.

Don't panic, shoppers!

While a potential price increase of 10% might sound like bad news for bargain hunters, there are several reasons why you shouldn't be too worried.

Firstly, Australian-based online stores are already charging GST on all their purchases. If you're buying from local retailers, nothing will change on the pricing front.

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Secondly, even with 10% added on, shopping overseas will still be cheaper in some categories. If a pair of Levi's is half the price from a US store (which is typically the case), then it's still going to cost less even if the 10% is added. By seeking out cheap shipping deals and bargain coupons, you may still be able to keep the price under the sub-$ threshold.

Thirdly, this change doesn't happen until July 2017. Even then, it will rely on the law passing through the Senate, which isn't a certainty. Until then, the exemption remains. Time to hunt down some discount codes and get shopping!

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