The new financial year is off to a pretty crappy start, with news that eGlobalDigitalCameras has closed its doors citing new GST regulations on imports which came into effect on July 1st.
The new legislation requires retailers to collect GST on low value imported goods under $1,000 from July 1st. The legislation also requires any business which generates more than $75,000 in sales to register with the ATO, whether they’re based in Australia or not.
In this case, eGlobalDigitalCameras.com.au which operates out of Hong Kong (despite the .com.au domain name) has posted a message advising customers that they have shut down, effective 23:59 AEST, June 30th, 2018.
In their statement below, they have promised to still ship pending orders, as well as honour warranty claims through their RMA centre. There is also a support email address for customers to email the company for any other questions.
It appears that the company is operating a sister site – dwidigitalcameras.com – which offers shipping rates to Australia, including free shipping to Australian Metro addresses. It’s entirely possible that this move by eGlobalDigitalCameras is just a rationalisation of their web properties.. but who can say.
This closure comes as Amazon has now started re-directing Australian customers away from their US site to a specialised ‘International’ site. This was a controversial move that some see as good for Australian retailers, but leaves Australians without a place to purchase some goods which are not offered for sale at any retailer here.
The closure of eGlobalDigitalCameras who also dealt in supplying goods not always available from Australian retailers, won’t be the last victim of the new legislation. There’s sure to be more, and while collecting the correct amount of tax is important, so is not gouging customers for prices.
One of the major problems with the new scheme is no one really knows which companies are registered with the scheme. Unlike Australian entities registered for GST – which are publicly listed on the Australian business register – offshore entities are registered effectively in secret.
The Australian Taxation Office has refused an FOI application for access to a list of some claimed 320 registrants citing secrecy legislation, noting that offshore registered entities aren’t public record like their Australian counterparts.
For the consumer, this makes the scheme even more problematic. Not only might their favourite retailer close shop, but others might claim to be registered – which can’t even be verified – and charge you “GST” only for the customer to be charged again by customs when it enters the country.
The scheme is short sighted and poorly thought out. The impact is perhaps most certainly yet to be realised.
Have you seen your favourite e-tailer close their doors in the wake of the new legislation? Let us know.