Overseas boat buyers who have a vessel manufactured in Australia often want to explore our magnificent coastline before they head home -- but in the past Australian tax laws have mitigated against this.

The law required that the boat be exported within 60 days of purchase or GST would be payable. For many years the Australian International Marine Export Group (AIMEX), the peak body for the local marine export industry, has been lobbying to get GST removed from boats sold to overseas buyers who wish to sail in Aussie waters.

The long and drawn out process proved a success last week when the 2010 Federal Budget papers announced changes to the GST rules that will allow overseas buyers of Australian boats to sail in Australian waters for recreational purposes for up to 12 months without paying GST.

"Buyers will be able to sail new Australian-made boats in our waters for up to 12 months without paying GST on the sale price, resulting in economic benefits for Australia's coastal regions," the Assistant Treasurer Nick Sherry says.

AIMEX says the issue has been a huge deterrent to buyers and has hindered the possible sales and growth for Australian boat building companies. It points out that the marine industry provides $1.2 billion in export revenue and is a large employer. Research by AIMEX shows that nine companies canvassed had lost more than $40 million in export sales due to the GST restriction.

"It is a great relief that the Treasury has recognised the need for this rule change," says AIMEX CEO MaryAnne Edwards, "Once applied, boat builders, the industry and the nation will reap rewards in return."

The changes to the GST rules are due to be applied from the start of next month.

AIMEX says due recognition for the changes must go to Seawind Catamarans' Richard Ward who spent significant time driving the changes and selling the idea to the Government.