It really isn’t just the GST Gerry …

A few weeks ago, I blogged about how some retailers here in Australia were complaining that they were losing sales to overseas online retailers as overseas tax retailers were cheaper as they didn’t charge GST, and that Australian customers were legally avoiding GST due to Australia’s generous tax free allowance of $1000 per transaction for goods ordered from overseas.

Well I’ve just had a concrete example of the fact that it’s not just GST. We wanted to buy a high quality A3 inkjet for photographic prints.

After checking some websites, including Amazon.co.uk, we settled on the Epson Stylus R2880. Amazon.co.uk does not ship printers to Australia so we used shopbot.com.au to search for an Australian retailer.

And this is where the prices speak for themselves:

	Amazon price (GBP)	Amazon price equivalent (AUD)	Shopbot price (AUD)
inc VAT/GST as appropriate	450	720	1150
tax free	383	613	1045

assuming an exchange rate of GBP1.00 = AUD 1.60, a VAT rate of 17.5% in the UK and 10% GST in Australia, and rounding to the nearest whole currency unit. Prices as found on 27/12/2010.

And basically what they tell us is that either Amazon is ridiculously cheap or Australian retailers are stupidly expensive. We did check a few other UK retailers and we did find that Amazon were quite cheap, but that none of the big retailers were much over GBP500/AUD800 inclusive of VAT.

Incidentally the same’s not true of an iPad – the worldwide tax free price is more or less the same round the world, if one looks at the mail order Apple store prices.

Given that the printers are manufactured in Asia, I doubt if shipping costs are much of a factor. Basically, even paying GST, it’s much cheaper to buy a printer from overseas. Whether this is due to retailers gouging the market, or importers using an unfair exchange rate is anyone’s guess, but if Apple can do it, why can’t others?

[update 05/01/2011 - without going through the whole rigmarole again we've found that Canon A3 Pixma's are relatively cheap from printersupermarket.com.au, although relatively cheap means a $150 premium over the UK mail order price before takeing VAT versus GST into account ...]