Submission to the Consultation on the GST Treatment of Cross-Border Transactions

Abstract

On 7 October 2015, the Treasury commenced a consultation period with respect to an exposure draft bill which would result in imported digital products being subject to Australia's consumption tax, the goods and services tax (the 'GST').This submission to that consultation was made on 21 October 2015. It argues that as the States and Territories are stakeholders in the on-going reform of the GST, this consultation is an opportune time to consider not only the difficulties arising in the regulation of digital products under the GST, but also under other areas of the law, including State and Territory law. One example is the treatment of digital products under the State and Territory sale of goods Acts in Australia, and under the Australian Consumer Law.This submission argues that digital products should be subject to the GST not (as under the exposure draft bill) because they are other-than-goods, but because they are goods, and recommends that reform to Australia's GST legislation be approached on this basis instead. It also argues that the State and Territory sale of goods Acts should be amended to include digital products within their statutory definitions of goods, and that the Australian Consumer Law should be amended so as to include the overall category of digital products (rather than only software) within its statutory definition of goods.It is submitted that that these broader amendments would address the GST status of digital products as well as other long-standing difficulties in the regulation of digital products in Australia, and would secure a coherent approach to their regulation across these different areas of the law.