With the new goods and services tax coming into force from July 1 in Australia, Amazon would have been forced to collect 10 percent tax on all shipments from outside the country.
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| The Amazon website is seen in Dandenong, Australia, a day after the launch of its local website, Dec. 5, 2017. Photo: Quinn Rooney/Getty Images |
By Himanshu Goenka, International Business Times
Global e-commerce behemoth Amazon announced Thursday it would automatically redirect its users in Australia to the local version of its website (amazon.com.au), effectively restricting their shopping options to goods available only on its Australian website. Previously, its users in Australia could, and did, order and purchase products from other Amazon sites too, such as the U.S. (amazon.com) or the U.K. (amazon.co.uk) ones.
The move would come into effect July 1, the same day Australia’s new goods and services tax would come into force. The new tax regime would impose a 10 percent tax on all shipments from outside the country, and it would have been Amazon’s responsibility to collect that tax. Currently, this tax is applicable only on overseas purchases that are over 1,000 Australian dollars ($755) in value, but the new GST rules would apply it to all such overseas transactions.
The primary reason behind the move seems to be the sheer scale of logistics involved in collecting the tax and depositing it with the government. However, Amazon has created a new “global store” on its Australian website, where it is offering over four million products that were otherwise available only on its U.S. marketplace. On sales made through this global store, the company will collect the 10 percent GST.
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites. Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au where they can shop for products sold by Amazon US on the new global store, available today. This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas,” Amazon said in a statement shared with Australian media.
However, four million or so products are less than one percent of the 480 million products that are available on Amazon’s U.S. website. In some cases, the same products were cheaper on an international marketplace than the Australian one, even after adding the extra cost of overseas shipping charges.
After July 1, the only way for Australians to buy goods on Amazon’s international websites would be to order them to an address overseas and then have them shipped to Australia on their own. Using a technological workaround, like a fake geolocation, won’t work either, since the company has decided to not ship any packages to the country from abroad.
Amazon sent an email to all its Australian customers explaining its decision, and also gave them a gift coupon for 20 Australian dollars to say “thank you for choosing to shop with us.” That coupon is valid only on the Amazon Australian marketplace, which has about 60 million products on offer.
The decision didn’t go down well with many Australians, with criticism directed toward both the company and their government.
The new GST on online products coming from overseas has resulted in amazon no longer shipping to Australia from its American site. Once more the coalition specifically hits my way of life *sigh*. I am a poor man just trying to get by, leave me alone @TurnbullMalcolm— DarkViperAU (@DarkViperAU) May 31, 2018
Progressives complaining that Turnbull is 'forcing Amazon out of Australia'. Perhaps we should really direct our anger towards a multinational monopoly holding our democracy hostage?— Shaun Crowe (@shauncrowe) May 31, 2018
Slow clap for @ScottMorrisonMP and the rest of the govt brains trust who supported this. Australia: closed for business. #amazon #gst #auspol #rentseekers https://t.co/9HCu0AWDM3— HowToDemocracy (@HowToDemocracy) May 31, 2018
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