Still to be clarified is the tax situation where the sender and receiver of the product both reside overseas. We do several tens of thousands of orders a year for flowers going from one international country to another and they just happened to be routed through our Internet servers in Australia. However, it seems that we will not need to pay GST on the full value of the transaction. One of the great strengths of the Internet is that it does give Australian businesses the opportunity to act as a clearinghouse around the world, which was not so readily possible in the days before the Internet. One group of sites that may be adversely affected by the GST are those that were able to bring in goods from overseas that should have incurred sales tax but were able to get away with it, based on shipping individual parcels.
Music CDs are an interesting example.
As the GST is much more pervasive, it will be somewhat more difficult to avoid and sites that relied upon selling sales tax-free goods to their audience may find that the price of their product comes into line with other markets and they therefore lose one of their competitive advantages. Several times a year, webmasters will need to find 10 percent of their total turnover to pay to the Tax Office. For many of the small, low profit, low margin web-based businesses, finding sufficient cash each time the Business Activity Statement is due may be a serious difficulty. Many of the smaller Web businesses will have a great deal of trouble obtaining overdraft and other cash flow buffers from banks. Thinking about the impact of the GST on Australian Internet trade, leads me to also think about some of the other impediments that Australian webmasters suffer and which reduce their ability to trade over the Internet worldwide.