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The move is a response to the Australian government's decision to slap the 10 per cent GST on all items bought from overseas sites and shipped to Australia, rather than just those worth more than $1,000 as at present.

Until now, GST has applied only to most goods sold in Australia and imported goods worth over A$1,000, making relatively low-priced imported items cheaper than their equivalents in local stores.

While Australians will be blocked from Amazon's global websites, they will be able to buy from the retailer's Australian website.

"We have had to assess the workability of the legislation as a global business with multiple worldwide sites", a spokeswoman is reported as saying.

Amazon.com Inc said on Thursday it will force Australians to use its Australian website instead of its much larger US site to avoid a new sales tax, setting the stage for a showdown with rival eBay Inc in the No. 12 economy.

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.

"As a result of changes to Australian GST law on 1 July, global shopping options for Australian customers will change".

Amazon will soon be sub-prime, if you live in Australia.

Australian shoppers using Amazon's worldwide site will be unable to place orders, with the retail giant stopping shipping due to new GST rules.

The Australian site has more than 60 million products across 23 categories, including toys, books and clothing. As a placation, Australian customers will also have access to 4 million products that were previously available only on Amazon.com through its new Global Store.

"If multinationals aren't forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia, on our own main streets and in our shopping centers". "That tax revenue is used to fund essential services", the spokesperson said.

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