GST after 1st July.

Due to the fact that we buy a fair bit of small miscellaneous whatnots from overseas I’ve been searching for what is really going to happen when the GST is applied to everything, particularly when the GST hasn’t been collected by the overseas vendor.
Well with regard to goods arriving without any vendor collection there is no information, I would venture to guess that the relevant Government bodies do no have a fucking clue as to what to do. A hell of a lot of the stuff we get is under $20.00, most of it is between $5-10. So are they going to chase 50c or a dollar, or are they going to confiscate the goods or what? This is the very reason for setting the $1,000,00 mark, below this figure it is not economical to collect the GST.

This application of GST may have repercussions that the powers that be, in their haste to crawl up several loud mouthed retailers respective arses, have completely overlooked. Tit for Tat imposition of taxes on imports from Australia, screams about abrogation of free trade agreements, etc, are not beyond the realms of possibility. Look at how quickly China slammed reciprocal import duties on the USA.

Oh, there was one application of GST starting on the 1st July that surprised me, GST on the sale of new houses! I wonder how the major project builders allowed that to slip through, or didn’t they find out about it until it was a done deal. I’d be surprised if all of the politicians who voted for the passing of the relevant bills were aware of the fine print.

last edited by Termite

Don’t know about the little things - it’s a nonsense on the face of it, but I do know quite a lot about GST on property.

The bottom line is that it’s always been there on new houses - you just never saw an invoice! The change is that the buyer now has to pay the GST directly, instead of the builder/developer.

Now that’s an interesting can of worms! In my former life I’ve been through so many GST audits in the course of a project that we had special systems in place to make it easy for the tax guys! They always get excited when the GST credits hit $1m in the month, which in a medium sized development company they can easily. So every month, we tally the labour and materials inputs and claim a deduction. Then on sale of the building - we pay the GST on the full retail value of house and land - that’s how the system works.

Now, I guess the credits come back to the builder (late as always) and the lawyers settling the sale will have another potential for stuff-up and the tax office will have a few more people they can audit!

https://www.ato.gov.au/Newsroom/smallbusiness/GST-and-excise/Changes-to-GST-on-property-transactions/

*"GST on property transactions is often incredibly complex, and calculating the GST payable can be a difficult job for even the most experienced of accountants. The compliance burden is now on real estate agents, conveyancers, legal advisers, vendors and purchasers to ensure the amount of GST the ATO requires, as well as when it is payable is done correctly.

Additionally, these new rules mean the ATO is now first in line for settlement proceeds, meaning the Commissioner, in effect, has priority over all creditors, including secured creditors. This may be of concern to investors and financers in real estate developments.

With specific notification timelines, real estate professionals, particularly conveyancers and solicitors, will need to be more prepared to ensure this increased administration is timely and efficient, and that a process is in place to minimise impacts on days on market, settlement timeframes and ultimately business cash flow."*

From: https://www.bdo.com.au/en-au/insights/real-estate-construction/articles/changes-to-gst-add-compliance-burden-to-the-real-estate-industry

last edited by bitingmidge

If you think you are confused - read this from a Pommy supplier I use regularly -

"We’ve done the maths

As you may have heard, there are pending changes to Australian tax regulations which will take effect on 1st July, 2018 that will impact some overseas purchases. Because of this change, orders (product plus shipping) of less than AU$1,000 will be subject to a 10% GST charge. Orders of $1,000 or more will not be subject to GST.

Please take 15% off your next order with the code AUTAX15 as our way of saying thanks for choosing MOO."

???
Didn’t they get that arse about?

seems to me they didn’t but they did… they still have to collect the GST on stuff below $1000, but I suspect what is happening is that above $1000 it gets collected on entry to the country, so they are saying… OK, we won’t do the tax office’s work for it!

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