THE nation's biggest airport is lobbying Canberra to widen the range of duty free goods available to Australians as they return from overseas.

Inbound duty free is currently limited to alcohol, tobacco and perfume sales and Sydney Airport wants that widened to include gifts, toys and other accessories.

Australian duty free stores are facing stiff competition from operations in other countries.

Midpoint airports such as Singapore and Dubai offer a wide range of goods at competitive prices, as travellers wait to change planes.

Sydney Airport wants those travellers to spend their money at home.

"It's a very competitive market, extremely competitive," Sydney Airport chief executive Russell Balding said yesterday.

The company's general manager of corporate affairs, Rod Gilmour, said the airport was also seeking to have GST refunds for goods bought outside the airport returned to overseas visitors in cash.

Overseas visitors who pay GST are entitled to get the tax refunded when they leave the country, but the current system has the money deposited into credit card accounts.

But airports such as London's Heathrow can return the tax in local currency, giving departing visitors an extra incentive to spend it before they leave.