Under the new GST collection laws, online retailers like Amazon will be forced to apply the 10 percent GST to goods purchased on global sites and shipped to Australia.
Currently GST is applied to items bought overseas for more than $AU1000.
The new tax rules were brought in after years of lobbying by struggling local retailers, which have to apply GST to all online and store sales.
The online retail giant will direct Australian shoppers away from its United States and United Kingdom stores to its smaller local site from July 1 when the goods and service tax is extended to all imported e-commerce items. Goods sold on Amazon.com, the USA site, will cease shipping to Australia on July 1.
Media reports said the other major online retailer, eBay, would not follow Amazon and apply the new tax in the interests of consumers purchasing goods from its website.
'Amazon Global Store will allow Australian customers to shop on Amazon.com.au for over four million items that were previously only accessible on Amazon.com'.
"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", it said in a statement.
eBay also stated its case against the Bill which applied GST to overseas sales.
Retail stocks on the ASX rose following Amazon's announcement.
Thankfully, global third-party sellers' storefronts will still be accessible from the Australian Amazon site, although shipping costs on those items will be at the discretion of individual sellers, rather than Amazon itself.
But even with the changes, the number of products available will be a fraction of what's on sale globally.
A spokesperson for Treasurer Scott Morrison said the new GST regulations "level the playing field" for Australian businesses.
"This isn't an anti-trade move by the Australian government", he said.
The move comes after the Australian government has expanded a local tax named the Goods and Services Tax (GST) to online goods shipped into the country.
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.