Harvey Norman Offers GST-Free Computer Games Through Web Site From Ireland
Australians who want to buy computer games could purchase these items at a lesser cost at retailer Harvey Norman. The lower cost is made possible by removing the general sales tax (GST).
The move is legal on Harvey Norman's part because of its launch of a Web site based in Ireland to help Aussies avoid the GST.
The 10 per cent GST is waived if the item purchased online overseas costs less than $1,000. Minus the sales tax, an online buyer would have to pay $63 plus $3.95 postage for the computer game Modern Warfare 3 which is normally sold for $89.98 in Australia.
"We are not doing this with a great deal of joy. We have been able to do this for a long time, we have held off.... But you get to a point where you can't hold off," explained company founder and chairman, Gerry Harvey.
Harvey Norman used to be critical of international ecommerce sites, but realised that if it can't beat online retailers, should become one.
Mr Harvey hinted that the retailer would soon include in its GST-free offer laptops, computers, digital cameras, mobile phone and tablet computers through its offshore Web sites located in Ireland, Singapore, Malaysia and Slovenia.
"Is this the beginning of retail moving out of Australia and going overseas? I can't remember a time when there were as many retailers in dire straits are there at the moment," Mr Harvey said.
Other computers games available in Harvey Norman, which controls 23 per cent of the market in Australia for electronic goods, are the Xbox, Nintendo and PlayStation games.
Besides the competition posed by offshore retailers, Mr Harvey said the cost of wages, rent and advertising, and discussions with Fair Work Australia and the Australian Competition and Consumer Commission makes it very expensive to run an exclusive bricks-and-mortar retail operations in Australia alone.
"You can't just sit around and let competitors steal your market. We can't beat (the offshore Web sites) so we've got no alternative but to join them and do what they're doing," he said.
"We see no sign of the government doing anything... I'll die before anything happens," Mr Harvey added.
