Due to New GST Rules, Amazon Blocks Aussies From Using US Store

In this modern day, many people would prefer browsing through an online shop rather than go to the mall to purchase what they’re looking for. It is more convenient considering that they don’t have to leave the house in order to do so, and more often than not, prices are a lot cheaper and there are more options.

However, for Australians, it seems that their online shopping sprees on Amazon will come to a grinding halt due to some new rules that are to be implemented by their government.

The Australian Amazon Ban

Amazon will not ship overseas items to Australians anymore after new rules from GST that aim at international retailers. The new set of rules will come into effect this coming July. Amazon’s new rule was announced on Thursday, and it will stop Australians from buying from the Amazon US store, or any international Amazon stores.

The reason why some Aussies chose these stores over local ones is that they frequently have cheaper items and have a wider range.

Beginning on the first day of July this year, Australian customers who visit an international Amazon store will automatically be redirected to the Australian site, which has been online since late last year. The move is in response to a new GST policy that will include a 10% tax on all overseas purchases that are under $1,000.

This was announced by the Turnbull government last year in order to level the playing field between Australian and overseas retailers.

Initial Reaction

When it was first announced, Amazon said the policy was unfair. Although they support the new GST rule in principle, it argues that delivery companies like Australia Post should be made to collect the tax, not the stores.

A spokeswoman from Amazon said that they have had to assess the effectivity of the legislation considering that they are a global business with various international sites. Starting on July 1 they will be redirecting Australian customers from the international Amazon sites to amazon.com.au.

The global store currently has 4 million items, which is paltry compared to the roughly 500 million on the full American store.

Some international products will still be available to Australians on a new platform called the global store, but the range will be much smaller. Amazon’s ban includes all shipments to addresses in Australia, which means that even customers with VPNs, or virtual private networks, that attempt to hide their location will be able to access an international site but still be unable to ship their goods home.

If Australians wished to get international products, they would have to send their purchase to an overseas address and then arrange for it to be forwarded to them. Since its launch in December 2017, Australia’s Amazon store has not had the immediate impact that many people predicted. When the website first went up, the prices were criticised because they were too high compared with local competitors and international Amazon sites.

In February local retailers like JB Hi-Fi posted record profits, saying Amazon had yet to provide serious competition in the industry. An industry analyst, Kim Do, said that Amazon’s underwhelming launch was because of their undeveloped supply chain. The global giant has only one distribution center, in Dandenong in Melbourne, but has announced a second warehouse will be built in Sydney later this year.

Taking Advantage

A spokesman from Amazon’s competitor eBay, said they would not block Australian customers, nor redirect them

The eBay spokesperson also said the company was working on a solution since 1 July that will enable Aussies to continue to shop at all eBay sites, while also capturing the required GST. Labor MP Andrew Leigh said that Amazon’s ban was an utter embarrassment for the treasurer, Scott Morrison. Like Amazon, the opposition supports the general principle but takes issue with the government’s model.

Lee continued by saying that less purchasing choice means higher prices for Australian consumers at a time when they are struggling with the records low wages growth and cost of living pressures. However, Morrison hit back at criticism in a statement, saying it was an issue of fairness. Morrison said the government didn’t apologize for ensuring multinationals give an acceptable tax in Australia. The people should understand tax revenue is used to fund essential services.