Retailers rejoice at potential GST changes to online parcels

Retailers have rejoiced at new findings from a government taskforce report reviewing the potential reduction of the $1,000 GST threshold.

Compiled by the Low Value Parcel Processing Taskforce, the report was commissioned to investigate options to make processing parcels under $1,000 more efficient - some of which includes changes to charge online shoppers an average of $60 per parcel for items sent from overseas.

This figure would cover the cost of lowering the threshold - for instance, the report states that if the threshold was reduced to $500, GST collection costs would come to $20.19 an item.

The $60 unit cost may be bad news for consumers as goods valued at under $1,000 are currently exempt from GST, but will be beneficial for bricks and mortar retailers. The current GST legislation has attracted criticism from traditional retailers over revenue lost to international sellers.

"Australia's $1,000 Low Value Threshold (LVT) on foreign online purchases is highly inequitable when you consider that in countries such as the UK, the threshold is as low as 15 pounds," said the National Retail Association's Executive Director, Gary Black.

Trading conditions have been exacerbated by findings indicating that the number of low-value parcels imported into Australia increased by 58 per cent from 2008-09 to 2010-11.

"Parcel volumes have grown rapidly in recent years, placing pressure on both business and border agency processes designed for the handling and administration of low value imports," the report says.

According to the Assistant Treasurer David Bradbury, the report finds that streamlining of the process handling low value imported parcels would require "significant change".

The Government is currently in consultation with key stakeholders - such as the Retail Council of Australia - before making its decision.

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