GOVERNMENT departments have examined the feasibility of halving the $1000 tax-free threshold for imported goods, amid complaints from retailers about the threat of foreign online stores.

Documents released under Freedom of Information laws show customs and Treasury officials last year investigated how quickly the threshold could be cut to $500 and what the administrative costs would be.

All imports of less than $1000 are exempt from the GST, but domestic retailers have argued for the threshold to be cut or removed, saying it gives overseas online stores an unfair advantage.

Emails from customs staff sent last November, made public after a request from the Fair Imports Alliance, a retail lobby group, said cutting the threshold to $500 would have increased administration costs by $38 million over four years.

Asked by Treasury to identify the earliest possible date of lowering the threshold, customs staff said they could have made the change by July 1 this year.