Plans for the state government to lower the low value imports threshold (LVIT) which would enable collection of GST on parcels below $1000 as well as from overseas suppliers was released in the Australian Financial Review (AFR)*.

The news has been welcomed by the Australian Retailers Association (ARA) who also congratulated state treasurers on the initiative led by NSW treasurer Mike Baird. He had called for a reduction in the LVIT to $30 earlier this year.

ARA executive director Russell Zimmerman said the proposed plans showed positive movement on the GST front in accordance with recommendations from the Low Value Parcel Processing Taskforce’s final report released in September this year.

“Lowering the GST threshold on imported goods needs to happen swiftly if Australian retailers are to be put on a level playing field with their online overseas counterparts, who currently have the distinct advantage of escaping GST when exporting their goods to Australia,” he said.

“State governments are also missing out on revenue due to the tax collection loophole created by not lowering the threshold, and this is obviously a big missed opportunity for state treasuries.

“The ARA supports the Government’s plans to reduce the GST threshold, which falls into line with recommendations from the Low Value Parcel Processing Taskforce’s final report and can be implemented quickly and to immense economic benefit.

“As pointed out in today’s article from the AFR in a quote from Michael Evans, international online retailers would easily adjust to the new requirements given they would be on par with how they conduct business with the rest of the world.

“Collecting GST from offshore suppliers would also capture services and intangible goods generally exempt from GST which are not caught under the current low value threshold.

“It’s really a simple and economically beneficial solution, which needs to be implemented for the future of the Australian retail sector and to let good fiscal sense prevail.”

*Australian Financial Review, ‘Push for GST retail victory’. Katie Walsh and Michaela Whitbourn, 8 November 2012.