A MAJOR gap has come to light in the GST refund scheme for tourists after a Hong Kong resident was refused a refund on a large painting purchased in WA.
A MAJOR gap has come to light in the GST refund scheme for tourists after a Hong Kong resident was refused a refund on a large painting purchased in WA.
The tourist refund scheme was designed to give GST refunds to tourists who buy goods in Australia and take them out of the country with them as accompanied baggage.
However, the scheme applies only to items small enough to carry in a tourist’s hand luggage, something the Australian Taxation Office was apparently unaware of until the incident involving the Hong Kong resident.
Nadeen Lovell, the owner of the Kununurra art gallery that sold the painting to the Hong Kong buyer, said she had asked the Minister for Small Business, Hendy Cowan, to take up the issue.
“The sort of art I and others sell ‘traditional Australian landscapes of high quality’ is great public relations for our country but can rarely be taken out as hand luggage,” Mr Lovell said.
“Yes it can be freighted and then the GST is not applicable. However, freight costs can often stop a sale.
“Taking the work out as accompanied luggage is usually what my buyers prefer. They know where it is, have it with them on arrival home and, of course, feel they are getting value for money while travelling in our country.”
Nadeen said she was not told about the hand luggage limitation when she first sought advice from the ATO. After the incident with her client, she checked again and the ATO quoted a regulation stating “purchased items, travelling as accompanied baggage, was subject to the GST refund.”
Subsequently, however, the ATO admitted Customs, which administers the scheme, had not yet approved the regulation.
A Customs spokesperson told Business News that customs officers must be able to see items on which GST refunds are being claimed so they can verify the items are being exported.
As the refund booths are set up in airport departure lounges the items must be small enough to fit into hand luggage.
“We are in negotiations with the airlines to introduce a system of verification on large items that go into the hold,” she said.
“We hope the issue will be resolved by the time the Olympics come around.”
The tourist refund scheme was designed to give GST refunds to tourists who buy goods in Australia and take them out of the country with them as accompanied baggage.
However, the scheme applies only to items small enough to carry in a tourist’s hand luggage, something the Australian Taxation Office was apparently unaware of until the incident involving the Hong Kong resident.
Nadeen Lovell, the owner of the Kununurra art gallery that sold the painting to the Hong Kong buyer, said she had asked the Minister for Small Business, Hendy Cowan, to take up the issue.
“The sort of art I and others sell ‘traditional Australian landscapes of high quality’ is great public relations for our country but can rarely be taken out as hand luggage,” Mr Lovell said.
“Yes it can be freighted and then the GST is not applicable. However, freight costs can often stop a sale.
“Taking the work out as accompanied luggage is usually what my buyers prefer. They know where it is, have it with them on arrival home and, of course, feel they are getting value for money while travelling in our country.”
Nadeen said she was not told about the hand luggage limitation when she first sought advice from the ATO. After the incident with her client, she checked again and the ATO quoted a regulation stating “purchased items, travelling as accompanied baggage, was subject to the GST refund.”
Subsequently, however, the ATO admitted Customs, which administers the scheme, had not yet approved the regulation.
A Customs spokesperson told Business News that customs officers must be able to see items on which GST refunds are being claimed so they can verify the items are being exported.
As the refund booths are set up in airport departure lounges the items must be small enough to fit into hand luggage.
“We are in negotiations with the airlines to introduce a system of verification on large items that go into the hold,” she said.
“We hope the issue will be resolved by the time the Olympics come around.”
