Amazon US site to be blocked in Australia because of new GST

Amazon will be blocking Australians from its US sites from July 1. The American e-commerce giant said shoppers in Australia will be directed to its local site when the new GST regulations begin in the country.

The changes to the Online Goods Tax will require Internet retailers to pay 10 percent goods and services tax to all online purchases shipped to Australia from overseas. Currently, GST is only applied to items bought overseas if the amount exceeds $1,000.

In response, Amazon said it will block Australians from accessing the global site from July 1, when the new GST comes into effect. Australian Internet shoppers will be limited to the local Amazon, which was launched last year.

“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,” the company said in a statement.

Amazon also sent its customers email to explain the move. It said that they could still shop for products sold in the global site on the new Amazon Global Store.

“Amazon Global Store will allow Australian customers to shop on Amazon.com.au for over four million items that were previously only accessible on Amazon.com. This selection is in addition to the more than 60 million products that are already available on Amazon.com.au across 23 categories, including books, fashion, toys, and electronics,” the email reads. It also offered customers $20 voucher for their next Amazon.com.au purchase.

While the Australian Amazon has added more products into its range since its heavily panned launch in December, it still can’t compare to the vast selection of goods available in the US version. As critics have noted, even with the shipping costs included, many of the products on the Amazon.com site are still cheaper than those on the local Amazon.

Meanwhile, Treasurer Scott Morrison said the government didn’t need to apologise for pushing ahead with the online GST changes.

“This new law levels the playing field for Australian businesses by forcing foreign businesses to pay GST,” he was quoted by news.com.au as saying. “The government doesn’t apologise for ensuring multinationals pay a fair amount of tax here in Australia. That tax revenue is used to fund essential services.”