eBay warns to block Australian shoppers if government pushes for new GST plan

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A sign is shown at the headquarters of eBay in San Jose, California February 2, 2010. Reuters/Robert Galbraith

eBay has warned that it may block Australian shoppers from shopping goods from overseas shall the government pursue with its plans to apply GST on all goods sold through the online marketplace. The warning comes amid reports that Treasurer Scott Morrison intends to apply 10 percent tax to all sales from July 1.

Jooman Park, eBay Australia and New Zealand vice president, issued the warning through a submission to a senate inquiry into the "Amazon Tax." "Regrettably, the Government's legislation may force eBay to prevent Australians from buying from foreign sellers," he wrote, adding the decision could be the most likely outcome at present.

Park assured that the online reseller will pay no tax to Australia and none would be owed. eBay would rather raise no revenue, deny Australians access to choice and lessen price competition. Currently, goods purchased from foreign sellers and imported to the country amounting to less than $1000 are GST exempt.

He further stated that an eBay ban would not be a benefit for local bricks and mortar retailers who have been lobbying for the tax. Park also believes that Australians would just move to "opaque parts of the internet" where they could shop from retailers that do not conform to the new rules.

The proposed tax reportedly focuses on eBay and Amazon, which means these online sales platforms would be responsible for applying the tax. However, eBay argue that it does not own, hold or distribute goods, nor does it handle payments. Park also said that the July 1 start date for the new tax was "completely unrealistic,” pointing that necessary changes may not have been implemented by then.

Park explained that shoppers utilise the eBay search engine to search for items and pick which seller to get those goods from. "Deeming eBay to be a seller is a fiction designed by the Government to give the impression of raising revenue,” he added as per the Sydney Morning Herald.

He also pointed that the proposed tax was too complex because separate goods in one box would appear to attract both tax treatments. Park suggested that shipping companies, the Australia Post for instance, would instead be made responsible for tax because these companies can require buyers to state whether a good is new and to nominate a value of the good as part of the pricing of parcel delivery to the country. Amazon agreed with the suggestion, saying the proposed cut should focus on shipping companies.