The company said on Thursday it would block Australian shoppers from its overseas websites, including in the US and UK, from July when the new GST tax regime comes into effect.
The new tax laws will require online retailers like Amazon to apply the 10% GST to goods bought on international sites and shipped to Australia.
While Australians will be blocked from Amazon’s global websites, they will be able to buy from the retailer’s Australian website.
The ABC reported a spokesperson for Treasurer Scott Morrison as saying that the new GST regulations "level the playing field" for Australian businesses, and “The government doesn't apologise for ensuring multinationals pay a fair amount of tax here in Australia. That tax revenue is used to fund essential services".
"A number of other countries are taking a similar approach and adopting a vendor collection model to collect GST from low-value imported goods.
"A level playing field will help Australian businesses grow and create more jobs and opportunities," the Treasurer’s spokesperson is reported to have said.
In a statement issued to the ABC, Amazon said it regretted the move and the inconvenience to customers accustomed to visiting Amazon's global online stores.
"We have had to assess the workability of the legislation as a global business with multiple international sites," a spokeswoman is reported as saying.
The ABC reports that, in an email to customers today, Amazon said from 1 July it would redirect Australian shoppers from its international sites to amazon.com.au where products sold by Amazon US would be available on the new global store.
"We have taken this step to provide our customers with continued access to international selection and allow us to remain compliant with the law, which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas," Amazon is reported as saying.
However, it’s understood the amazon.com.au site only offers a fraction of the millions of products that can be purchased from amazon.com.
The ABC says GST collection requirements for online shopping sites come after years of intense lobbying from local retailers in Australia such as Harvey Norman, Myer, JB Hi-Fi and David Jones, “who have seen their traditional bricks and mortar sales suffer from online competitors”.
Currently GST is applied to items bought overseas that cost more than $1000.