GST for E-commerce & Retail
E-commerce has introduced new layers to Australian GST — from digital product taxation to marketplace operator obligations. Whether you sell physical goods online, digital downloads, or use platforms like Amazon and eBay, understanding your GST obligations is essential for compliance.
Overview
If you are an Australian business selling goods or services online and your GST turnover exceeds $75,000, you must register for GST, charge 10% on taxable supplies, and lodge a BAS. This applies whether you sell through your own website, through a marketplace like Amazon, eBay, or Etsy, or through social media channels.
Since 1 July 2017, GST also applies to imported services and digital products sold to Australian consumers. This means overseas businesses supplying digital content (e-books, streaming, software, online courses, apps) to Australian consumers must register for Australian GST if their turnover to Australia exceeds $75,000. Major platforms like Netflix, Spotify, and the App Store already charge Australian GST.
For physical goods, the key threshold is $1,000. Goods imported into Australia with a customs value of $1,000 or less are taxed through the vendor or Electronic Distribution Platform (EDP) operator — not at the border. Goods over $1,000 attract GST at the border through customs. Shipping and insurance costs are included in the price that GST is calculated on for low-value goods.
If you sell through a marketplace platform (Amazon, eBay, Etsy), the platform may be classified as an Electronic Distribution Platform (EDP) operator and may be responsible for collecting and remitting GST on your behalf — particularly for sales to Australian consumers by overseas merchants. If the EDP is responsible for GST on a sale, those sales do not count toward the merchant's own GST turnover threshold.
Common items & GST status
The table below shows the GST treatment of common items and transactions in the e-commerce & retail sector.
| Item | GST Status | Notes |
|---|---|---|
| Physical goods sold online (domestic) | Taxable | Standard 10% GST on all taxable goods sold within Australia |
| Shipping and delivery charges (domestic) | Taxable | Delivery is part of the supply — GST applies to the total including shipping |
| Digital products (e-books, software, apps) | Taxable | Digital products sold to Australian consumers are taxable since 1 July 2017 |
| Online subscriptions (streaming, SaaS) | Taxable | Recurring digital services to Australian consumers |
| Imported goods under $1,000 | Taxable | GST collected by the vendor or EDP at point of sale — not at the border |
| Imported goods over $1,000 | Taxable | GST collected at the border by Australian Border Force |
| Gift cards and vouchers (sale) | GST-free | No GST on the sale — GST applies when redeemed on a taxable item |
| Exports from Australia | GST-free | Goods exported within 60 days are GST-free — can still claim input credits |
| Basic food sold online | GST-free | GST-free food remains GST-free when sold through an online channel |
| Second-hand goods (private sale) | GST-free | Private sellers not carrying on an enterprise are not in the GST system |
| Marketplace platform fees (Etsy, eBay) | Taxable | Platform fees charged to you include GST — claim as an input tax credit |
| PayPal / Stripe processing fees | Input-taxed | Payment processing is a financial supply — no GST to claim |
Common mistakes & traps
These are the most frequent GST errors the ATO sees in the e-commerce & retail industry. Avoiding them can save your business from penalties and back-payments.
1Not charging GST on shipping and delivery
Shipping charges are part of the total consideration for the supply. If the goods are taxable, the delivery charge is also taxable. You cannot treat shipping as GST-free just because it is shown as a separate line item.
How to fix it
Include shipping in your GST calculation. If you sell a $50 taxable item with $10 shipping, the total is $60 and GST is $5.45 (1/11th of $60).
2Ignoring the $75,000 threshold for online sellers
Many sellers on platforms like eBay, Etsy, or Depop assume they are not a 'business' and don't need to worry about GST. If your turnover from selling exceeds $75,000, you must register — regardless of the platform.
How to fix it
Track your total GST turnover across all channels. Once you hit $75,000 in the past 12 months (or expect to in the next 12 months), register for GST within 21 days.
3Confusing GST-inclusive and GST-exclusive pricing
Online listings must show GST-inclusive prices when selling to Australian consumers. Some sellers price GST-exclusive and then add GST at checkout, which can mislead customers and breach consumer law.
How to fix it
Under Australian Consumer Law, prices displayed to consumers must be GST-inclusive. Show the total price including GST on your product pages.
4Not claiming GST credits on platform fees
Marketplace fees (eBay seller fees, Etsy listing fees, Amazon referral fees) charged by Australian-registered platforms include GST. Many sellers forget to claim these as input tax credits.
How to fix it
Download tax invoices or statements from your marketplace platforms and claim the GST component as an input tax credit on your BAS.
5Failing to account for GST on low-value imports for resale
If you import goods under $1,000 for resale, GST may have been collected by the overseas vendor or EDP. You may be entitled to a credit for this GST under the reverse charge mechanism if you are registered.
How to fix it
Track GST paid on imported goods carefully. If GST was collected at point of sale by the vendor, keep records to support your input tax credit claims.
Input tax credit guide
Which business purchases can you claim GST credits on? This table covers the most common purchases for e-commerce & retail businesses.
| Purchase | Credit? | Notes |
|---|---|---|
| Inventory / stock for resale | Yes | Full GST credit on taxable goods purchased for resale |
| Packaging and shipping materials | Yes | Boxes, tape, bubble wrap, satchels — all taxable supplies |
| Website hosting and domain names | Yes | GST credit on hosting fees from Australian providers |
| Marketplace platform fees | Yes | eBay, Amazon, Etsy fees from Australian-registered entities |
| Photography and product imaging | Yes | Product photography services are taxable |
| Advertising (Google Ads, Meta Ads) | Yes | Digital advertising from GST-registered platforms |
| Courier and postage costs | Yes | Australia Post and courier services include GST |
| Payment processing fees (PayPal, Stripe) | No | Financial supply — input-taxed, no GST credit available |
| Overseas supplier invoices (no GST) | No | If the supplier is not registered for Australian GST, no credit to claim |
BAS tips for e-commerce & retail
Reconcile marketplace statements to your BAS
Download monthly or quarterly sales reports from each marketplace. Reconcile total sales (including GST) to your BAS figures. Marketplace reports are one of the first things auditors check.
Separate taxable and GST-free sales
If you sell a mix of taxable goods and GST-free items (e.g. basic food), categorise each product by GST status in your accounting software. This makes BAS preparation accurate and fast.
Track multi-channel sales carefully
If you sell through your own website, eBay, Amazon, and markets — each channel needs to feed into one set of GST records. Use cloud accounting software (Xero, MYOB, QuickBooks) to aggregate across channels.
Keep export evidence for GST-free treatment
If you export goods, keep proof that they left Australia within 60 days (shipping documentation, customs declarations, tracking). Without evidence, the ATO can treat the sale as domestic and taxable.
Frequently asked questions
ATO sources & references
All information in this guide is based on the following ATO publications and rulings.