eBay says it may block Aussies from shopping overseas

eBay says it may block Australian shoppers from buying off overseas sellers if changes to GST laws come into effect.

The federal government is currently proposing changes to online GST, including dropping the threshold for GST collection on imported goods from AU$1,000 down to zero. While you might be used to getting slugged with GST on your Dolce & Gabbana handbags, the changes mean that all online shopping will now be subject to the 10 percent tax.

But online retailers say it will put an unnecessary burden on overseas sellers, and that many may just give up on selling to Australian shoppers. And for online marketplaces like eBay, it may just be easier to block Aussies from buying off overseas merchants.

"Regrettably, the Government's legislation may force eBay to prevent Australians from buying from foreign sellers," the company said in a submission to the Senate committee reviewing the laws. "[This would] deny Australians access to choice and lessen price competition.

"This solution would not even represent a win for bricks and mortar retailers, because Australians would still find ways to buy online. They would do so direct via dot.coms without paying GST."

The big sticking point all comes down to who has to play tax collector. Under the government's proposed bill, GST must be collected by the seller, the "electronic distribution platform" or the "redeliverer of the goods."

But companies like eBay, Amazon, Etsy and Alibaba say this model will put small businesses, resellers and even big platforms like eBay at a disadvantage, because consumers will naturally look for cheaper options and non-compliant websites will win out. And for those that do comply, that cost will be passed on to consumers.

Major overseas-based online retailers Alibaba and Etsy joined eBay in protesting, in another submission to the committee.

"Overseas businesses may choose to cease shipping goods to Australia if they do not have the resources to comply," the submission read. "Australian consumers will be adversely impacted through reduced access to goods."

The three companies are pushing for a "logistics model" (as opposed to a vendor-led model) which would require Australia Post and other freight companies to collect GST at the border, removing the need for voluntary GST collection by overseas sellers, and increasing the likelihood of tax actually being collected.

But industry lobby groups like the Australian Retailers Association have different ideas.

The ARA says overseas vendors should be required to register for GST, and their names will go on a list checked by Australia Post and Border Protection.

So what about those that don't register, or sellers that fall below the GST-registration threshold (those with local turnover less than AU$75,000 per year)? The ARA says Australia Post or border control can simply check every single importer against their lists as goods come into the country. The ARA says "new coding will be introduced to assist these measures" though no further details were given.

The senate committee inquiry is expected to deliver its findings on May 9.

eBay declined to provide further comment.

Tech Enabled: CNET chronicles tech's role in providing new kinds of accessibility.

Technically Literate: Original works of short fiction with unique perspectives on tech, exclusively on CNET.