Amazon announced plans to block Australian users from ordering from its main U.S. store (Amazon.com) and will redirect customers to its local Australian site (Amazon.com.au) instead.
"While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple worldwide sites", an Amazon spokesman said in a statement today.
Australian shoppers using Amazon's global site will be unable to place orders, with the retail giant stopping shipping due to new GST rules.
USA internet giant Amazon will block Australian shoppers from its worldwide websites to counter new tax laws on online purchases, it announced Thursday.
For now, the GST change looks like a win for local businesses, which will have an easier time retaining shoppers while Amazon builds out its Australian inventory. A loophole in tax regulations, however, means that the GST is now applied only to items purchased from overseas retailers if they are worth $1,000 AUD or more, which many local companies argued gave Amazon, eBay and other overseas competitors an unfair advantage.
The move is a response to the government's decision to slap the 10 per cent goods and services tax on all items bought from overseas sites and shipped to Australia, rather than just those worth more than $1,000 as at present.
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Amazon's new restrictions may boost visits to Australian website, which been criticised for a relatively small product range and higher prices since it began taking orders in December.
But even with the changes, the number of products available will be a fraction of what's on sale globally.
The government would not back down on the new tax rules, which would raise AU$300 million a year, Morrison said.
The Australian site has more than 60 million products across 23 categories, including toys, books and clothing. Most Australians have decried the Amazon.com.au store as being inferior to the United States store, with a considerably thinner product catalog and higher prices.
Treasurer Scott Morrison said the new laws "level the playing field for Australian businesses". "That tax revenue is used to fund essential services", the spokesperson said.
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