Greetings to all Aussie and Kiwi dropshippers / resellers!
Does anyone know what will happen to dropshipping when the new "GST on Low Value Goods" law becomes effective on 1 July 2018 in AU? (And looks like NZ is also gonna implement similar law in Oct 2019)
To my understanding, starting from 1 July 2018, overseas suppliers who are GST-registered must declare on the customs declaration:
- the supplier's own GST number and address
- the recipient's GST number (if known)
- whether or not GST had been paid
In a dropshipping transaction, the overseas supplier is the sender of the goods, the end consumer is the recipient/importor of the goods, and I as a reseller is just someone in between to faciliate the sale.
Droppshipping only works if the overseas supplier is unknown to the end consumer. Now, with all these new financial and customs compliance requirements, can the overseas supplier still hide it's identity? If the overseas supplier's identity is known, does it mean dropshipping will no longer be possible?
Also, if the overseas supplier is declaring it's own GST number, it can only declare the sales transaction it had with the reseller (me), it cannot declare the sales transaction the reseller had with the end consumer (my customer) - who is the recipient/importer of the goods. So whatever information that the overseas supplier will be declaring on the customs declaration will have no relevance to the recipient/importer of the goods at all. Once again, it looks a lot like dropshipping will no longer be possible?
Furthermore, as buyers/resellers how are we ever gonna know if our overseas suppliers need to be GST-registered or not? Afterall, they are not gonna tell us how much they earned in the past 12 months or how much they will earn in the coming 12 months. This new law is gonna bring lots of uncertainties?
I'm very confused by this new law and the implications it will bring to dropshipping.
If you're reading this post, please do share your thoughts and advice.