Amazon said that Amazon.com, its American website, and other overseas sites would no longer ship to Australian addresses from July 1. Shoppers visiting those sites will be redirected to Amazon.com.au, which launched late last year and stocks about 60 million products, compared to almost half a billion on its US site. July 1 is the date new rules come into effect forcing online retailers to apply the 10 per cent GST to all online purchases being shipped to Australia from overseas. This so-called "Amazon tax" was brought in after heavy lobbying by local retailers - which have to apply GST to all sales, whether online or in store - to "even the playing field" with international online rivals. "While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites," an Amazon spokeswoman said.

Treasurer Scott Morrison slammed Amazon for being unwilling to collect GST while other online retailers worked with the system. Loading “The second biggest company in the world, run by the richest man in the world (Jeff Bezos) shouldn’t get a leave pass from paying tax in Australia," Mr Morrison said. “If multinationals aren’t forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia." Fellow online trader eBay had threatened to block foreign sellers from its marketplace if the tax changes went ahead, but on Thursday said it was working on a way to collect GST on overseas sales without restricting any sellers.

"This requires major changes to eBay’s global systems and we are working to have these ready by 1st July," an eBay spokeswoman said. "eBay’s GST solution will allow us to collect GST in any currency, from any seller, from any eBay site." Amazon's decision to not even ship products to Australia regardless of where they are purchased will scupper any plans tech-savvy shoppers might have to use geo-blocking software to get around the ban. Consumers who had grown accustomed to Amazon.com's unparalleled range and often far-lower prices cried foul over the decision. “Australians are very isolated and it’s the likes of Amazon that have enabled consumers to have more variety, said Darren Price, a Sydney-based tech writer.

"Otherwise you end up waiting for whenever Harvey Norman is going to get it in stock." Loading Mr Price - who spends about $500 a year on Amazon.com, mostly for computer components that aren’t available locally - said he and many other Australians would likely get around the blockade by using package redirection services, which receive orders shipped to addresses in the US and then forward them to Australia. “So the money will be made offshore still - the only thing is it’s the consumer that is going to be inconvenienced”. Citi analysts estimated before the launch of its local site late last year that Australians spent between $500 million and $700 million on Amazon annually.

Australians spent about $25 billion on online retail in the 12 months to March, according to NAB research, making up about 8 per cent of total retail spending and with 20 per cent of that going to offshore traders. In a submission to a Productivity Commission inquiry into GST changes last year, Amazon said delivery companies such as Australia Post, DHL and FedEx should be responsible for collecting the tax instead of vendors such as itself and eBay. A model in which vendors collected GST was "fundamentally flawed" because it required voluntary compliance from thousands of offshore online retailers, Amazon argued, and consumers would simply seek out vendors that did not comply. Loading Replay Replay video Play video Play video But the commission ultimately backed the vendor model, which the government considered would be the lowest cost and cause the least disruption to consumers.

Labor has supported the vendor collection model but on Thursday took aim at the way the system had been implemented, saying it had resulted in Australian consumers not being able to seek out cheaper items listed overseas. "This is a direct response to how the government has sought to implement this reform," shadow treasurer Chris Bowen said in a statement. Australian Retailers Association president Russell Zimmerman said Amazon should be congratulated for starting to collect GST on imports, and said the change would “level the playing field” for local retailers. “It’s important that local retailers can be able to compete - we’re supporting jobs in Australia,” Mr Zimmerman said. However Mr Harvey said the impact of Amazon.com being blocked would be negligible for local retailers.

Scott Kilmartin, a retail and e-commerce adviser, said the move would restrict consumers’ options in the medium term while Amazon built up the number of products available from its local site. “If you want an obscure handmade guitar made in Maine, it’s going to be harder to get a hold of that,” he said. “It’s probably a good time to buy shares in those third-party logistics companies that consolidate orders and ship them to Australia."