What! 1 July is here!

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Yes, you have heard correctly, the Australian new GST law, which has been pre-empted for the last 6 months, is finally implemented in July during the World Cup season. We believe that most merchants, in the face of a USD41.3 billion Australia's annual online shopping market, is still full of enthusiasm and has not lose confidence of this market yet. After all, in the current world cup betting environment with punters advocating “bet against the crowd, villa against the sea” and the soaring number of rooftop partners with "soccer world sorrow" feelings, we can even better appreciate the importance of knowing oneself and the opponent to win every battle.

So what is the Australian new GST law? What is the new policy? What is the impact on sellers on established platforms and sellers on self-operated platforms? How should sellers operate? ......

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UBI has teamed up with officials of Australian Taxation Office (ATO) and representatives of Australian Post on 27 June to explain the Australian new GST law for you. Without further ado, let us review the excellent questions and answers between ATO officials and sellers and unveil the truth about Australia GST!

Please click on the below video:

Q1: I have heard that some Australian entities never pay GST and ATO won’t be able to trace it. How can ATO ensure the offshore entities comply with the policy and pay GST?

Answer: The ATO encourages and helps overseas companies comply with regulations. If overseas companies choose not to comply with regulations, the ATO will adopt legal means such as restricting the outflow of funds. The ATO may also inform the China Taxation Bureau on the companies that do not comply with Australian tax laws.

The ATO has access to a wealth of data, can obtain information through credit card transactions, and are able to determine which companies are in compliance with GST law and find out their corresponding corporate details.

 

Q2: We have our own online website, mainly selling clothing products and have quite a high proportion of returned items. For such returned cases, we refund our customers so do we still need to collect GST? Will ATO rule us as evading our GST obligation and block our website?

Answer: The ATO also take into consideration situations in which cross-border e-commerce will generate refunds for returns. The GST of the returned parcels can be deducted from the GST payable by the merchant as a deduction.

If the ATO has doubts over a company, the ATO will contact the company and conduct further investigations first and will not directly block the merchant’s website.

 

Q3: If a parcel is held by Australian Customs due to GST issue, can Australian buyer pay GST to UBI or Australian Customs?

Answer: Parcels worth less than AUD1,000 will not be detained by customs due to unpaid GST. The new GST law is not applicable to parcels with a value higher than AUD1,000, which are required to make formal customs declarations and pay customs duties and taxes at the borders.
(Note: Transporters such as UBI and Customs will not collect GST on behalf of merchants).

 

Q4: What will be the consequences if a merchant’s GST information (Vendor ID) is mis-used by another merchant?

Answer: Customs information is just one of the many sources of information that the ATO determines which companies have not paid GST. If someone mis-use someone else's Vendor ID, the ATO will be able to find out through analysis of various data sources and impose penalties accordingly, and possibly restrict future transaction amounts to be remitted into the overseas account.

If the merchant sells their merchandise through platforms, the merchant needs to use the Vendor ID of the platform, so it is of little significance to mis-use Vendor ID of others. If the merchant sells merchandise through his own website and has annual sales of more than AUD75,000, then a Vendor ID is required.

 

Q5: We understand that merchants are required to register and charge GST if the sales turnover exceeds AUD75,000 within 12-month period. Does that mean any 12 months? For example, if the sales hit AUD75,000 on the 11th month, and the merchant register GST by then, is it too late? Is GST applicable for the sales of the previous 10 months?

Answer: Yes, this is correct. The rules are the same as for GST in Australia and business needs to register for GST if at any time in a 12-month period - looking forward or backward - it will make more than AUD75,000 worth of sales. However, the business does not need to include sales made through online marketplaces (where the online marketplace is responsible for GST). The requirement to register for GST generally applies to forward sales projection.

 

Q6: We are a merchant trading on multiple platforms. All the orders will be sent to our warehouse in China for packing and despatch. Our warehouse staff won’t be able to differentiate which platform those orders are coming from and are unable to assign the correct Vendor ID. Can we not provide Vendor ID for such situation?

Answer: In these cases, the online platforms (the GST registered entities) may be liable for penalties, because they are not providing the required information on customs documentation. It is their responsibility to ensure that all required information are provided to the merchants.

What? Have not get the message clearly yet? Want to know more details?

UBI sales and customer service team welcome all of you to contact us for enquiries!