Applying the GST to small purchases of goods from overseas sites could bring in $400 million to government coffers with the price of clothes and electronics bought online the heaviest hit, analysts say.

The Abbott government wants to slap GST on offshore online sales. Federal Treasurer Joe Hockey and state treasurers last week agreed to impose GST on downloaded music, movies and books. The $1000 GST-free threshold for imports could also be lowered.

Happy customer: Harvey Norman chairman Gerry Harvey. Credit:Glenn Hunt

Retailers such as Harvey Norman boss Gerry Harvey and Solomon Lew have long pushed for the government to impose the GST on online sales.

Mr Harvey said politicians had finally seen the light after being more concerned about an electoral backlash than the integrity of the tax system.