A tax on "low-value goods" imported from overseas is one step closer to becoming a reality after the Senate passed the so-called 'Amazon Bill' on Monday.
The bill was first introduced in 2015, and proposes that online sellers impose a 10 percent goods and services tax on products with a value of less than $1000 from overseas, and with a turnover of more than $75,000 annually. GST currently only applies to goods from overseas valued at $1000 and over.
The government expects to recoup $300 million in GST revenue over the next four years as a result.
The tax was initially intended to come into effect on 1 July 2017. However, online resellers will be given a 12-month reprieve following an amendment by the Labor party to delay the starting collection date to 1 July 2018.
Another amendment states that the Productivity Commission must investigate the most effective model to collect GST, after receiving push back from major retailers with Australian operations such as Ebay and Amazon. Under the bill, retailers would have to collect GST at the point of sale.
In its submission to the senate, Amazon broadly supported the tax, but proposed instead that GST be collected by logistics companies on all parcel deliveries, placing the responsibility on them.
Similarly, Ebay called the legislation "complex, inconsistent, and unworkable" and also voiced its support for the logistics model. Ebay threatened that it may even block Australians from buying overseas rather than trying to collect GST in April.
The bill must pass in the House of Representatives first, but is expected to do so under a Liberal Party majority.
The online goods bill is different to the so-called 'Netflix Tax' which was passed in March, which applies to all intangible goods such as software, as well as professional services and consulting.