Amazon has stopped its Australian consumers from making purchases on its overseas websites in response to a new sales tax law.
Due to the new Goods and Services Tax (GST) act, online retailers in Australia will need to pay the tax on all products shipped from abroad.
According to a report by the Financial Times, Amazon recommended that the Australian government collected and remitted the tax through express carriers and freight forwarders.
The change of policy by the US e-commerce giant, known as geoblocking, will mean that Australian shoppers will only be able to purchase a limited range of items from Amazon’s Australian website from July 1, 2018.
It also means that Australian consumers can only shop on Amazon’s US and UK sites if their order is sent to an address in the US or UK or by using an online freight forwarding service.
This resulted in low-cost imported items cheaper than their equivalents in local stores.
Until the GST change, which was lobbied for by Amazon’s main rivals such as online market eBay and smaller Australian merchants, GST only applied to most goods sold in Australia and imported goods worth over A$1,000 (US$ 756).
According to a report by Reuters, an Amazon spokesperson said that the firm was taking the measure to comply with the legislation and not to avoid paying tax.
In a statement, Amazon said: “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.
“Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au where they can shop for products sold by Amazon US on the new global store, available today.
“This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.”