The Government introduced the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 on 16 Feb 2017.
It proposes to amend the A New Tax System (Goods and Services) Act 1999 (GST Act) to ensure that GST is payable on certain supplies of low value goods that are purchased by consumers and are imported into Australia. The amendments would make supplies of goods valued at $1,000 or less at the time of sale to a customer connected with the indirect tax zone (ie basically, Australia) if the goods that are supplied are brought to the indirect tax zone with the assistance of the supplier. This is designed to ensure that such supplies are subject to GST, consistent with equivalent supplies made within Australia.
The amendments do not make any changes to the rules in the Customs Act 1901 relating to the importation of goods, or other aspects of the customs law.
DATE OF EFFECT: These amendments would apply in working out net amounts for tax periods commencing on or after 1 July 2017.
[APH website: Bills Digest; Bill; EM] [LTN 16/2/17]
Extract from EM
Summary of new law
1.16 Schedule 1 to the Bill amends the GST Act to ensure that GST is payable on certain supplies of low value goods that are purchased by consumers and brought to Australia.
1.17 The reforms:
- make supplies of goods valued at $1,000 or less at the time of supply connected with the ITZ if the goods are, broadly, purchased by consumers and are brought to the ITZ with the assistance of the supplier;
- treat the operator of an electronic distribution platform as the supplier of low value goods if the goods are purchased through the platform by consumers and brought to the ITZ with the assistance of either the supplier or the operator;
- treat re-deliverers as the suppliers of low value goods if the goods are delivered outside the ITZ as part of the supply and the re-deliverer assists with their delivery into the ITZ as part of, broadly, a shopping or mailbox service that it provides under an arrangement with the consumer;
- allow non-resident suppliers of low value goods that are connected with the ITZ only because of these amendments to elect to be limited registration entities; and
- prevent double taxation by making importations of goods non-taxable importations if the supply of the goods is a taxable supply only as a result of these amendments and notice is provided in the approved form.
Extracts from Bill
A new s9-25(3A) is to be inserted in the following terms:
(3A) A supply of goods that is an *offshore supply of low value goods is connected with the indirect tax zone if it is connected with the indirect tax zone under Subdivision 84-C.
The Bill will re-name Div 84:
Division 84 – Offshore supplies
The Bill will rename Sub-div 84A:
Subdivision 84-A—Offshore supplies that are taxable supplies, and “reverse charged”, under this Subdivision
The Bill will also insert a new Subdiv 84-C
Subdivision 84-C—Offshore supplies of low value goods
84-73 What this Subdivision is about
Supplies of low value goods involving goods being brought to the indirect tax zone may be connected with the indirect tax zone.
An entity may be treated as the supplier of an offshore supply of low value goods, if the entity is the operator of an electronic distribution platform through which the supply is made, or the entity is a re-deliverer of the goods.
The result is that the operator or re-deliverer, instead of the supplier, counts the supplies towards its GST turnover and pays GST on the supplies.
Suppliers of offshore supplies of low value goods are not required to issue tax invoices and adjustment notes, but they must ensure relevant information is included in customs documents.
Note 1: The supplies will need to meet other requirements in order to be taxable supplies: see section 9-5.
Note 2: Offshore supplies of low value goods that are not connected with the indirect tax zone under this Subdivision may be taxable supplies, and “reverse-charged”, under Subdivision 84-A.
The Bill will move the ‘Limited Registration Entities’ provisions from Sub-div 84-D to a new Div 146.
The Bill will then insert a new Subdiv 84-D:
Subdivision 84-D—Consumers of offshore supplies
84-95 What this Subdivision is about
A supplier is treated in some situations to be making a supply to an entity that is not a consumer, or not an Australian consumer.
Note 1: Whether the recipient of a supply of an intangible is an Australian consumer is one of the tests for whether the supply is connected with the indirect tax zone: see subsection 9-25(5).
Note 2: Whether the recipient of an offshore supply of low value goods is a consumer is one of the tests for whether the supply is connected with the indirect tax zone: see subsection 84-75(1).