ONLINE shoppers are headed for a taxing time in the new financial year, with overseas purchases under $1000 to be slugged with GST. In the long term, there may be benefits, but the short term may see a mess of confusion and undelivered goods, retailers say.

The first effect will be fewer products coming from abroad and therefore less range for Australian consumers, according to Nati Harpaz, CEO of online retailer Catch.com.au.

“The feedback from the US chamber of commerce is that some brands are going to stop selling into Australia,” Mr Harpaz said. “The extra administration from their end may not be worth the effort.”

SAVVY SPENDING: Quick way to boost your credit score

Overseas retailers continuing to sell to Australian buyers will likely raise their prices so the market absorbs the cost.

“If they have the margin, like on fashion items for example, they may absorb the price, but not for smaller goods with no margin, like cameras and electronic products,” Mr Harpaz said. “The prices will increase by 10 per cent unless the seller takes a hit.”

The short term confusion for some sellers may even result in purchased goods being stopped by authorities.

“A lot of US and Euro websites are not aware of the ruling, so won’t charge the GST,” Mr Harpaz said. “There is a good chance that the goods will be stopped at the border if the GST has not been paid.”

Camera Icon Online sellers from overseas will need to charge more or absorb the tax increase themselves. Credit: The Advertiser

But overall, the changes will provide a great opportunity for local businesses.

“There is an opportunity for local retailers and online players to extend their range, or import goods from overseas and sell them locally,” Mr Harpaz said.

Consumers are more likely to return to local retailers with that price adjustment, which will come with some benefits, says Katrina Haskew, managing director of financial advisory Leading Advice.

“Purchasing locally will often take far less time and has the added benefit of knowing you’re giving to an Australian business,” she said. “You’re also far more able to take action if the goods arrive damaged or aren’t what you were expecting in the case of delivery.

“You’re far more able to buy extra parts if required and you can also talk through benefits of different makes and models with a salesperson.”

There will also be benefits to the Australian economy, which will trickle down to consumers, according to Aaron Basin, head of corporate development at online consumer lender MoneyMe.

KOCHIE: Live a champagne life on a beer income

“It’s expected that the tax will benefit local Australian retailers by levelling the playing field and reducing competition. Taxing overseas behemoths … will also bring in large tax revenues to Australia,” Mr Basin said. “(This) should have a positive flow-on effect to consumers.

“Some retailers (may offer) other incentives to keep Australian traffic coming to their sites … you just need to know where to look.”