Feds wanted to reduce GST import threshold before calling PC inquiry

The Fair Imports Alliance has uncovered documents which suggest the Federal Government was considering a reduction in the low value importation threshold before it ordered a Productivity Commission inquiry into the issue.

The Fair Imports Alliance has used Freedom of Information laws to uncover documents that show the Federal Government investigated lowering the low value importation threshold for overseas purchases from $1000 to $500 in October 2010.

In correspondence between Treasury and Customs officials, a reduction of the threshold to $500 is discussed, as is a possible start date of July 1, 2011.

The low value importation threshold became an issue in late 2010, when prominent retailers called for its lowering in order to assist them to compete with offshore online retailers as imports of $1000 or less do not attract GST. Local retailers felt they are being undercut by overseas competitors, some of whom are suspected of false pricing in customs declarations to avoid GST.

The Federal Government responded to those calls by establishing a Productivity Commission inquiry into the issue.

The Australian Retailers Association’s response saw it team with a number of other retail associations to create the Fair Imports Alliance, whose spokesperson Brad Kitschke said in a press release issued today that “The Government has always claimed a lower threshold would be administratively unfeasible but these documents reveal otherwise. They show that it could be done, that plans were in place to reduce the threshold and advice was sought as to the earliest possible start date.”

“This information demonstrates the Government was giving serious consideration to reducing the GST threshold on imports prior to the announcement of the Productivity Commission Inquiry. Now that we have proof a lower threshold is both administratively feasible and economically beneficial we eagerly await the Productivity Commission’s recommendations when its draft report is released in August.”

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