House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

General outline and financial impact

Extending GST to low value imported goods

Schedule 1 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to ensure that goods and services tax (GST) is payable on certain supplies of low value goods that are purchased by consumers and are imported into Australia.

The amendments make supplies of goods valued at $1,000 or less at the time of sale connected with the indirect tax zone if the goods that are supplied are offshore low value goods. This ensures that such supplies are subject to GST, consistent with equivalent supplies made within Australia.

Date of effect: These amendments apply in working out net amounts for tax periods commencing on or after 1 July 2017 and the GST treatment of importations occurring on or after 1 July 2017.

Proposal announced: This measure was announced on 3 May 2016 in the 2016-17 Budget.

Financial impact: As reported in the 2016-17 Budget, the measure is estimated to result in a gain to GST revenue of $300 million over the period to 2019-20 comprising:

- Nil

Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights - paragraphs 1.183 to 1.187.

Compliance cost impact: This measure imposes some transitional and ongoing compliance costs upon suppliers (principally those operating outside of Australia), redeliverers and electronic distribution platforms for supplies of low value goods that are purchased by consumers and are delivered to Australia.