Australian consumers have hit out at Amazon's decision to stop online shoppers from importing products from its overseas e-commerce sites when the new goods and services tax regime comes into effect in July.

From July 1, when the GST will apply to overseas purchases under $1000, Australians shopping on Amazon overseas sites such as amazon.com and amazon.co.uk will be redirected to the Australian site, Amazon.com.au, which currently offers about 60 million products across 23 categories including books, toys, fashion, beauty, homewares and electronics.

Amazon will no longer ship from its overseas sites to addresses in Australia.

Amazon has established a 'global store' option on its Australian site offering more than four million products that were previously only accessible from amazon.com and will collect and remit the 10 per cent GST on these sales.

However, the global store will offer a fraction of the 480 million products currently available on amazon.com.

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The only way Australian consumers will be able to shop on Amazon's US and UK sites is to have orders sent to an address in the US or UK or use an online freight forwarding service.

Shoppers took to social media to express their frustration wth Amazon and the Australian Government, which introduced the so-called 'Amazon tax' to level the playing field after an intense campaign from domestic retailers, who have to apply GST to all sales.

"Not sure the @LiberalAus govt realise how pissed people will be at this #Amazon decision not to ship to Australia anymore," tweeted Sandy Lancely. "Amazon AU has little selection & higher prices, Amazon US has been popular with Australian consumers for some time. Not just price, but choice too."

Under the new GST regime, any overseas business with a turnover of more than $75,000 will pay GST on all goods sold, including items purchased under the low-value threshold of $1,000.

Amazon announced the decision to stop shipping to Australia from overseas sites on Thursday, saying that as a result of the GST changes, international shopping options for Australian customers would change.

"While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites," Amazon said.

"Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au where they can shop for products sold by Amazon US on the new global store, available today."

"This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas."

Millions impacted

The move will affect millions of Australian consumers who shop regularly on Amazon's overseas sites to access a vastly wider range of products and cheaper prices than those available on amazon.com.au, which was relaunched in December.

Last year, Citigroup estimated Australians were spending between $500 million and $700 million on all Amazon websites, representing about 10 per cent of all overseas online spending. This was before the relaunch of Amazon.com.au.

According to Nielsen data, 6.9 million adult Australians visited Amazon sites in December, up from 6 million in November and 4.5 million in October.

This included about 3.8 million Australians who accessed amazon.com.au that month. In comparison, about 1.04 million Australians visited amazon.com.au in December 2016, when the site only sold Kindle readers and e-books.

Analysts said if Amazon's move was executed well it could boost traffic and sales on Amazon.com.au ahead of the launch of Amazon Prime.

However, the move may also be a blessing for local online and bricks and mortar retailers if shoppers who can no longer order from the US or the UK start shopping locally.

Australians spend about $25 billion a year online, with about $6 billion spent on overseas e-commerce sites.

GST currently applies only to items bought from overseas retailers and worth more than $1000.

The government estimates the new GST laws will raise about $300 million a year, but online retailers including Amazon, eBay and asos warned last year the plan was "unworkable" and could lead to them blocking Australian buyers.

In a submission to the Productivity Commission last year, Amazon argued for a "modernised transporter model" that would see logistics companies such as Australia Post, DHL and FedEx collect the tax on parcels they delivered instead of vendors such as itself and eBay.

eBay, Alibaba considering options 

eBay said on Thursday it would not follow Amazon's lead.

"eBay customers love the fact that we have a huge selection of over one billion listings across eBay's global marketplaces so we are working on a solution that enables Aussie buyers to continue to shop from all eBay sites, while also capturing the required GST,' a spokeswoman said.

"This requires major changes to eBay's global systems and we are working to have these ready by July 1," she said.

"eBay's GST solution will allow us to collect GST in any currency, from any seller, from any eBay site. It also allows imports to Australia to continue without any structural barriers, redirects or blocks to the buyer experience."

Alibaba Group, which has also been critical of the GST collection model, said that at this stage its priority was to ensure it was prepared for the changes on July 1 and that the consumer experience on its platforms was not adversely impacted.

"The implementation of this tax is difficult and requires many changes to Alibaba's systems," a spokesman said.

A spokesman for Treasurer Scott Morrison said the laws were designed to level the playing field for Australian businesses, through forcing foreign businesses to pay GST.

Level the playing field

"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," the spokesman said.

"A number of other countries are taking a similar approach and adopting a vendor collection model to collect GST from low value imported goods. Amazon will continue to operate in Australia via its Australian site, which will now offer an expanded range of products.

"A level playing field will help Australian businesses grow and create more jobs and opportunities," the spokesman said.

Local retailers welcomed the decision.

National Retail Association chief executive Dominique Lamb said large overseas retailers had been enjoying an unfair advantage over local businesses.

"The NRA has long advocated for changes to the GST for online purchases as we didn't believe that the arrangements in place were fair," Ms Lamb said.

"Australian retailers were getting the rough end of the pineapple compared with overseas competitors and the new laws to come into effect from July 1 will bring that to an end."