Called the "Amazon tax", the new policy was introduced following concerns about the impact of Amazon and other large overseas e-commerce businesses on Australian retailers, who have to apply GST to all products they sell.
"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 worldwide sites", Amazon said in a statement. Previously, GST only applied to most goods and services sold in Australia, as well as imports worth more than A$1,000, giving companies that sold cheap imported goods an advantage over local suppliers.
"It's been argued that this is like an import tariff, but for years in Australia we've had something of a reverse: Local retailers paying a tax that foreign retailers haven't", he added.
In an email to customers on Thursday, the store said from July 1 Australian customers will be re-directed from Amazon.com to Amazon.com.au "as a result of changes to Australian GST law".
Amazon's Australia site boasts of selling over 60 million products, while Amazon's main site (the U.S. version) boasts of selling over 500 million. Amazon has made this move primarily due to new GST rules that will force them to apply a 10% GST to goods purchased on global sites and shipped to Australia.
Under new GST collection laws, online retailers will be forced to apply the 10 percent GST to goods purchased on global sites and shipped to Australia.
"This isn't an anti-trade move by the Australian government", he said.
Amazon's new restrictions may boost visits to Australian website, which been criticised for a relatively small product range and higher prices since it began taking orders in December.
Australian shoppers using Amazon's worldwide site will be unable to place orders, with the retail giant stopping shipping due to new GST rules.
An Amazon spokesperson said the change will allow the company to remain compliant with local laws.
Australian Treasurer Scott Morrison announced the change in April 2017, eight months before Amazon opened its Australian unit.