Restriction on US and international stores, which have cheaper prices and wider range, will come in from 1 July

This article is more than 2 years old

This article is more than 2 years old

Amazon will not ship overseas goods to Australian customers after new GST rules that target international retailers come into effect in July.



Amazon’s new rule, announced on Thursday, will prevent Australians from buying from the Amazon US store – or any international Amazon stores – which frequently have cheaper goods and a greater range compared with the Australian Amazon store.

From 1 July this year, Australian customers who visit an international Amazon store will be redirected to the Australian site, which has been running since late last year.

The move is a response to a new GST policy that will apply 10% tax to all overseas purchases under $1,000 announced by the Turnbull government last year in a bid to “level the playing field” between Australian and overseas retailers.

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At the time, Amazon criticised the policy for being unfair.



Although it supports the new GST rule in principle, it argues that delivery companies such as Australia Post should be made to collect the tax, not the stores.

“We have had to assess the workability of the legislation as a global business with multiple international sites,” an Amazon spokeswoman said on Thursday. “From 1 July we will be redirecting Australian customers from our international Amazon sites to amazon.com.au.”

Some international products will still be available to Australians on a new platform called the global store, but the range will be much smaller. The global store currently has 4m items, compared with roughly 500m on the full American store.

Amazon’s ban applies to all shipments to Australian addresses, which means that even customers with VPNs (virtual private networks) that hide their location will be able to access an international site but not be able to ship their goods home.

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If they want international products, Australians will have to send their purchase to an overseas address and arrange for it to be forwarded.

Since its launch in December 2017, Australia’s Amazon store has not had the immediate impact that many predicted. Initial prices were criticised for being far too high compared with local competitors and international Amazon sites.

In February local retailers such as JB Hi-Fi posted record profits, saying Amazon had yet to provide serious competition in the industry.

An industry analyst, Kim Do, said Amazon’s underwhelming launch was due to an undeveloped supply chain. The global giant has only one distribution centre, in Dandenong in Melbourne, but has announced a second warehouse will be built in Sydney later this year.

Cameron (@camulust) I see Amazon have decided they will stop shipping to Australia from their US store on July 1 because something something tax something.



If you think that'll make me use your overpriced and *very* understocked AU store, gosh you have another thing coming.

Cassandra O'Leary (@cass_oleary) The government doesn't apologise for making Amazon pay tax in Australia. But will the government apologise to to many, many Australian small businesses (authors) that sell direct on Amazon? How does this impact our businesses? Does anyone even know? https://t.co/TzedmVs9Tf

W (@WarWraith) Depending on the process Amazon use to block Australians, I may not be able to access my amazon store that sells into the US.



...that was meant to increase my income. I would pay more tax here (something I was happy to do).



I'm currently trying to find out from Amazon.

A spokesman from competitor eBay said the rival online store would not block Australian customers, nor redirect them.



He said the company was working on a solution for 1 July that will “enable Aussies to continue to shop from all eBay sites, while also capturing the required GST”.

Labor MP Andrew Leigh said Amazon’s ban was “an utter embarrassment” for the treasurer, Scott Morrison. Like Amazon, the opposition supports the general principle but takes issue with the government’s model.



“Less purchasing choice means higher prices for Australian consumers at a time when they are struggling with record low wages growth and cost of living pressures,” Leigh said.

However, Morrison hit back at criticism in a statement, saying it was an issue of fairness.

“The government doesn’t apologise for ensuring multinationals pay a fair amount of tax here in Australia,” he said. “That tax revenue is used to fund essential services.”

