The GST announcements in this year’s Budget are as follows:

  1. The application of GST will be extended to low value (i.e. $1,000 or less) goods imported by Australian consumers with effect from 1 July 2017.

This measure is intended to result in the same GST treatment for goods regardless of whether they are supplied by a domestic or foreign supplier. This means that foreign suppliers that were previously not required to register for, collect and remit GST because they supplied low value goods to Australians consumers, will now be required to do so if their Australian turnover is $75,000 or more.

Implementation of this measure however will require the unanimous agreement of the States and Territories. If this is enacted, the arrangements will also be reviewed after two years “to ensure that they are operating as intended and take account of any international developments”.

  1. Changes are proposed to be made to the GST regime to ensure that consumers are no longer subject to “double taxation” when using digital currencies such as bitcoin. Treasury has released a discussion paper on options to reform the GST law to address the double taxation of digital currencies.

Under the current regime, the ATO considers that bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for GST purposes. Its view expressed in public ruling GST 2014/3 is the supply may be taxable on the basis that a supply of bitcoin in exchange for goods and services is to be treated as a barter transaction. This has the consequence that the consumer could potentially bear double GST.