Australian retailers want items bought from overseas websites for as little as one cent to be subject to the GST.
New Assistant Treasurer Josh Frydenberg says the federal government will consider whether to apply the tax to such low-value purchases as part of its white paper process in the new year.
Goods purchased online worth less than $1000 are currently not subject to the 10 per cent GST.
Local retailers, many of whom have online sales sites, complain it's unfair because the loophole gives overseas retailers a price advantage.
Australian Retailers Association head Russell Zimmerman said the current GST-free threshold has "done nothing but damage our retail sector" and would like to see it scrapped altogether.
"I think it's vital that the government does something on this very quickly," he said on Friday.
"The threshold should be at least $30, but preferably down to zero.
"If it was brought down to zero, obviously all the books that come into Australia would be captured.
"But we've got some great online and bricks and mortar retailers."
Myer chief executive Bernie Brookes welcomed the planned review, claiming current regulations are only serving to boost job numbers overseas - not locally.
Australia's largest department store collects more than $300 million in GST every year, plus corporate tax.
"The problem is, we're competing against people throughout the world that aren't paying that level of GST and tax," Mr Brookes told AAP.
"There's no extra money in it for us if the GST is on or off - the reality is it goes to the government.
"And if the government is struggling to be able to balance things, then there's a $1 billion in potential income through being able to put the GST online.
"The government at the moment are doing a really good job creating jobs - but they're creating jobs in Birmingham, England, they're creating jobs in Los Angeles, they're creating jobs in China.
"They're not creating jobs in Australia because of the free kick they give all these people."
