This draft Law Companion Guide: LCG 2017/D5 was released by the ATO on Thur 8.6.2017. It explains the measures in the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 that seek to make redeliverers responsible for GST on offshore supplies of low-value goods.
This Bill, which is still before the House of Reps, imposes GST on supplies of imported low-value goods, ie those worth less than A$1,000, from 1 July 2017. Under the reforms, a redeliverer will be treated as the supplier if low-value goods are delivered outside Australia as part of the supply and the redeliverer assists with their delivery into Australia as part of, broadly, a shopping or mailbox service that it provides under an arrangement with the consumer.
Draft LCG 2017/D5 states that a “redeliverer” is an entity that assists in bringing goods to Australia through the provision of either an offshore mailbox service (where it provides or assists in providing the use of an overseas address to which goods are delivered) or a personal shopping service (where it purchases or assists in buying goods outside Australia as the agent of a recipient). Transporters, freight forwarders and merchants are not redeliverers, the Draft says. Importantly, the ATO accepts that overseas relatives or friends who assist in purchasing low-value goods, or arranging for the goods to be sent to Australia, are not typically redeliverers, as they are not carrying on an enterprise.
If a merchant or electronic distribution platform operator assists in bringing the goods to Australia, the redeliverer will not be responsible for GST on the offshore supply, the Draft says. This is because the redeliverer is last in the hierarchy of entities that can be responsible for GST under the amendments. Where there are multiple redeliverers (eg a redeliverer hires another entity to purchase the goods as an agent of the customer), hierarchy rules will apply to ensure that only one entity is responsible for the GST.
DATE OF EFFECT: If the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 is enacted as introduced and the final guidance is issued, it will generally apply from 1 July 2017.
COMMENTS on the draft are due by 10 July 2017
[LTN 107, 8/6/17; FJM]