Customs cracks down on GST imports rort but industry says lack of consultation is disappointing

Customs officers are now cracking down on people buying trying to avoid paying GST on imports worth over $1,000, but the retail industry claims is was not consulted before the Government’s investigations started.

Fair Imports Alliance spokesman Brad Kitschke says he is quite concerned about the lack of industry consultation with regard to the crackdown, saying the Government has provided limited information about what goods and which people are being targeted.

“We were contacted that the crackdown would begin on January 1, but we weren’t given any information with regard to how it’s being operated,” he says.

This latest development comes after a coalition of retailers including giants Myer, David Jones and Harvey Norman have all urged the Government to stamp GST duties on imports due to the customers buying online in order to avoid the tax.

The ARA has previously stated that it is not the everyday consumer that needs to be worried about these types of laws. Rather, some businesses and individuals attempt to get around the GST laws by important a slew of goods day-after-day, while making sure that the individual lots are all under the $1,000 threshold.

Once the goods have arrived, the individuals or businesses then sell the discounted merchandise at a much more expensive price. This activity is popular for selling sporting goods, especially during ski season.

Another rort is to report goods worth well over $1,000 as being under the threshold.

Home Affairs minister Brendan O’Connor told the Sunday Mail yesterday that customs officers are in the middle of a 14-week investigation that will be undertaken to see how individuals and businesses may be breaking current importation laws.

“People are purchasing a range of goods (online), including full marble-top kitchens from South-East Asia and China,” he said. “Customs will have the power to seize goods. If the goods are not allowed in … Customs will destroy them.”

“Customs can withhold the goods until duty is paid.”

O’Connor said Customs will be giving specific focus to goods bought online, specifically in categories such as clothing and musical instruments, and also hinted there may be educational campaigns introduced to show consumers why they need to disclose the cost of all goods purchased.

“We are always looking at doing things better,” he said. “This is relatively new technology and increasingly people are becoming more confident in purchasing online.”

O’Connor will be provided with a report at the conclusion of the crackdown, which will inform the government’s response to major retailers which say they are losing sales due to shoppers rorting the system.

But Kitschke says the main problem is not individual consumers, but rather black-market traders.

“We think the threshold is being used by the black market economy and black-listed traders. We’d like to see a crack-down on those people first.”

But Kitschke says while these traders would be the most appropriate first target, the industry is unaware of this being the case due to limited conversation with the government.

“As of last week, we still had no idea whether the paper we presented to the government had been reviewed at all. We think this campaign is a good idea, but we are quite disappointed about the lack of consultation that has occurred with industry.”

“It would be a concern for us if the government were just attacking individuals, we think this needs to be a valuation of how the importation tax is being abused. But we simply don’t know, because customs and border protection hasn’t told us.”