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The GST Rise On Online Purchases May Be Bigger Than We Thought

You should probably do all that drunk online shopping you've been putting off.

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That's because state treasurers and the federal government agreed to start applying the GST to all products purchased overseas that cost more than $20.

"Previously, the challenge was how do you impose the GST when it comes across our borders into Australia?" he told Radio National's Fran Kelly, saying the threshold may as well be lowered to zero.

"That was going to be incredibly clumsy and logistically a nightmare. What we've identified is a new way... to be able to impose the GST on the supplier overseas."

"So now we can go to the Amazons, we can go to the various retailers overseas and say, 'you have to apply the GST to goods that you are selling into the Australian market', and they will do so."

And who wants to pay an extra 9.5 for a "Women's 'Real Love' Heart Stainless Steel Band Ring Valentine Love Couples Wedding Engagement Promise Size8"? Not us.

But that's not all, applying the GST to online sales may actually cost more than 10%. As consumer group Choice warned last week, prices may increase by up to a whopping 256% for purchases under $100.

That's because lowering the GST threshold may also see the introduction of collection and processing fees at a time when Australian consumers are already paying more for products than in other countries.

In the UK, where there the GST threshold is £15 ($27.15 AUD) consumers have to pick up their parcels from the post office, where they have to pay a £8 processing fee.

The Treasurer says the change is necessary to level the playing field for traditional retailers in Australia, and that technological advances mean it's much easier to impose a lower threshold than in the past.

Rob Stott is a news editor for BuzzFeed News and is based in Sydney.

Contact Rob Stott at rob.stott@buzzfeed.com.

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