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Amazon to block Australian users from global sites on new tax rules

Amazon.com Inc. will lock Australian shoppers out of its U.S. and other overseas sites due to a new goods and services tax, or GST, regime coming into effect in the country.

Under the updated GST rules that begin July 1, consumers in Australia will be required to pay a 10% tax on all goods purchased and delivered from overseas, with imported items worth less than A$1,000 no longer exempt from the levy.

The same day, Amazon will start redirecting Australian shoppers from its global e-commerce sites to amazon.com.au, which was launched in late 2017 and has expansion plans in the works.

An Amazon Australia spokesperson said in a statement emailed to S&P Global Market Intelligence: "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 international sites."

Meanwhile, Amazon launched a global store on its Australian platform, which the spokesperson said will offer more than 4 million items that were previously only available through Amazon's U.S. site, while remaining GST-compliant.

Amazon Australia's own product offering comprises more than 60 million products across 23 categories.

The Australian GST legislation follows years of lobbying from local chains including furniture and electronics retailer Harvey Norman Holdings Ltd., home entertainment brand JB Hi-Fi Ltd. and department store operators Myer Holdings Ltd. and David Jones Ltd., ABC News reported.

Amazon argued against the new policy, saying in an April 2017 submission to the country's Economics Legislation Committee that while it supported removing the GST concession for all low-value imported goods to level the playing field, it did not agree with the proposed collection model. The company said couriers such as Australia Post should be tasked with collecting the tax, instead of retailers.

"The bill imposes an administrative burden on sellers and electronic distribution platforms, which will create an inherent disincentive for them to comply," it stated in the submission document.

Amazon also argued that the bill would "create rather than remove distortions in pricing due to its lack of efficient mechanisms to require registration of vendors, detect noncompliance and ensure collection of GST on goods as they enter Australia," according to the document. It believed that consumers would be driven to shop with noncompliant and less-reputable sellers to get more attractive pricing.