Retailers facing tough trading conditions are disappointed the federal government won't be taking immediate action to lower the $1000 threshold at which GST is collected on goods purchased from abroad.
The businesses argue that while online shopping from foreign outlets may comprise a small component of the overall retail sector, it's a fast-growing trend that is being supported by an effectively GST-free status on less expensive items.
Releasing the federal government's initial response to a task force on so-called "low value parcel processing", Assistant Treasurer David Bradbury said there were "no simple or quick solutions".
While acknowledging the $1000 threshold was high by international standards, he rejected calls for an immediate reduction.
Instead, and in line with the task force's recommendation, Labor will begin preparing business cases and possible implementation plans for reform, with a final response to be released in 2013.
"A decision cannot be made regarding the possible lowering of the threshold until these business cases and possible implementation plans for reforms to low-value parcel processing have been prepared," Mr Bradbury said in a statement on Monday.
He said the costs associated with any changes to the 58 million parcels that enter Australia under the low-value import threshold each year had to be carefully considered.
Lowering the threshold before putting in place significant reforms to processing capabilities would cause major disruptions to the international mail service and result in major inconvenience to the businesses and consumers that rely upon it.
"Without greater efficiencies in the system, the cost to taxpayers of collecting the GST on low-value parcels would also outstrip the revenue that is collected," he said.
But Australian National Retail Association chief executive Margy Osmond said retailers were disappointed by the slow response.
"We will continue in discussions with the (federal) government and state treasurers to have this changed," she told AAP.
"State treasurers have already said they see closing the loophole as necessary."
NSW Treasurer Mike Baird is urging the Gillard government to lower the threshold "as a matter of priority", saying the provision is costing the states more than $600 million of GST revenue per year in goods transactions and over $1 billion in services.
"It also provides a tax advantage for foreign retailers," Mr Baird said in a statement.
He said online was a growing part of the retail market, and the tax system needed to be brought into the "modern age to capture that", providing local businesses with a level playing field.
But consumer watchdog CHOICE agreed with the federal government that any changes should be based on realistic modelling, "limiting the costs and burdens on Australian consumers".
The Franchise Council of Australia also saw Mr Bradbury's approach as a "positive step forward".
The broader business community also appreciated the difficulty and cost enforcing a lower threshold.
"This issue has important tax compliance ramifications," Australian Chamber of Commerce and Industry chief economist Greg Evans told reporters in Canberra.
Online retail sales, both domestic and overseas, accounted for around six per cent of overall retail sales, with less than 1.5 per cent made up international retailing, Mr Bradbury said.