Govt must scrap GST on books: Report

Aussie booksellers are at a disadvantage to offshore online retailers who are not required to pay the tax

A review of the Australian book industry, commissioned by the Federal Government, has called for the goods and services tax (GST) on books to be scrapped in order to level the playing field between Australian booksellers and offshore online retailers.

The review, conducted by the Book Industry Strategy Group (BISG) for innovation and industry minister, Kim Carr, urged the Federal Government to recognise the competitive disadvantage being placed on the Australian book industry as a result of the GST inequality.

To rectify this, the BISG has advised the government to lift the 10 per cent GST on books purchased in Australia as books purchased in the UK and numerous other countries are exempt from value added tax (VAT) or are taxed at a reduced rate.

“The Government [should] provide greater equity in competition for Australian retailers by applying the 10 per cent GST on books sold by overseas retailers to Australian consumers,” the report reads.

When questioned on the GST issue by ABC News 24, Carr would not comment directly on whether the recommendations would be upheld but said the suggestions would need to be considered in consultation with a number of other ministers.

“There is, however, a number of other areas where we do need to look at the way in which we can change our business practices,” he said.

The review follows ongoing dissatisfaction from Australian book retailer, Dymocks chief executive, Don Grover, who late last year said he would consider moving the company’s online business offshore to avoid the GST and restrictions around parallel importation.

“We have agreed to wait until we see the results of this review by the productivity Commission due early in the New Year,” he told Computerworld Australia.

“This was the review undertaken after the parallel importation decision in November 2009,” he said. “Almost two years later and thousands of bookselling jobs lost, I am not confident that the [BISG] report will do much.”

“Every day [the decision to move offshore] looks to make more sense not less. We are committed to Australian jobs and the Australian industry so [we] will continue to wait while there is a chance of common sense prevailing.”

Grover has long stood by the company’s bricks and mortar business, stating it would outlast the trend to digital based e-book and e-readers.

However, the retailer, along with Booktopia, recently announced a partnership with Google e-books to expand its online platform with the Cloud-based repository.

"This partnership with Google e-books is a natural progression for us as we continue to innovate and expand our digital offering," Dymocks general manager of e-commerce, Michael Allara said at the time.

Follow Chloe Herrick on Twitter: @chloe_CW

Follow Computerworld Australia on Twitter: @ComputerworldAU

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