Australian Customs and Border Protection Service (ACBPS)
1. Management of GST revenue collection
1(a) GST liability assessed
ACBPS assesses the GST liability on all taxable importations of goods imported via Australian ports and airports, mail imported through all Australian international mail centres and goods entering Australia with passengers and crew via all Australian ports and airports.
1(b) GST collected
The GST liability assessed by ACBPS on taxable importations is deferred (and accounted for on the BAS) for cargo importers that have been approved by the ATO for GST deferral. In all other cases, ACBPS collects the GST.
2. Maintain compliance
2(a) Compliance costs
This figure is calculated as:
Cost of import and export compliance + Costs of Tourist Refund Scheme compliance
ACBPS import and export compliance includes the following:
Note: ACBPS captures all Tourist Refund Scheme (TRS) costs as a single figure, comprising administration, processing and compliance.
- Intelligence and risk assessment (including associated research, analysis and monitoring)
- Pre and post clearance interventions (pre clearance interventions, including real time verification of import declarations, occur before the release of goods from Customs control and post clearance interventions, including formal audits, occur after the release of goods from Customs control)
- Enforcement (including investigation, imposition of sanctions and prosecution)
- Education and advice (including tariff, valuation and origin advice).
2(b) Compliance coverage - imports
Import compliance coverage is defined as the proportion of imports (by customs value) subject to compliance activity.
Customs value is the value on which customs duty is calculated for imported goods and which is established in accordance with Division 2 of Part VIII of the Customs Act 1901. Compliance coverage (imports) is calculated as:
ACBPS interprets 'compliance' in this item as comprising pre and post clearance interventions only.
2(c) Compliance coverage - exports
Export compliance coverage is defined as the proportion of declared exports by Free On Board (FOB) value subject to compliance activity.
The owner of each export consignment that has a FOB value greater than $2,000 must provide ACBPS with an Export Declaration. Compliance coverage (exports) is calculated as:
ACBPS interprets 'compliance' in this item as comprising pre and post clearance interventions only.
2(d) Compliance coverage - Tourist Refund Scheme
Tourist Refund Scheme (TRS) coverage is defined as the proportion of TRS claims subject to compliance activity. Compliance coverage (TRS) is calculated as:
The TRS regulations require TRS claimants to present any or all of the goods, the tax invoice relating to the goods and certain travel documents to an ACBPS officer on request. ACBPS undertakes checks before payment of a refund is authorised. For this reason, audit coverage for the TRS is 100%.
TRS compliance activities include real-time activities undertaken to verify that particular TRS claims meet the requirements of the regulations and any post-transaction compliance activities.
2(e) Tourist Refund Scheme claims rejected
This is a measure of the proportion of Tourist Refund Scheme (TRS) claims that are rejected because the claim does not meet one or more of the requirements of the regulations. TRS claims rejected is calculated as:
2(f) GST adjustments - underpaid GST revenue
GST revenue is underpaid in cases where the GST liability assessed by an importer for a taxable importation is less than the correct GST liability (regardless of whether the GST liability was initially paid to ACBPS or deferred for payment on the BAS). A GST underpayment adjustment occurs when the importer’s incorrect assessment is amended to correct the error, resulting in an increase in the assessed GST liability.
Underpaid GST revenue includes additional GST revenue paid to ACBPS (or deferred to the next BAS) in cases where an import declaration has been amended by an importer. It can refer to additional GST revenue paid to ACBPS (or deferred to the next BAS) in relation to notices of assessment or other compliance activity.
A GST assessment error could be the result of incorrect assessment of the value of the taxable importation or incorrect classification as a non-taxable importation.
An incorrect assessment of the value of a taxable importation could result from an error in assessing the customs value, the customs duty, the wine equalisation tax or the amount paid or payable to transport the goods to Australia and to insure the goods for that transport.
An incorrect classification as a non-taxable importation could result from an error in identifying the taxable status of particular goods.
2(g) GST adjustments - rejected Tourist Refund Scheme claims
International travellers can obtain a GST refund under the Tourist Refund Scheme (TRS) provided that they submit a claim that fulfils all of the requirements set out in the regulations.
Where a TRS claim is checked and found not to comply with the regulations the claim is rejected which results in an adjustment of the GST refund claim down to zero. The value of the GST adjustment is equal to the amount of GST refund that was originally claimed. Certain rejected claims, (for example, not a valid tax invoice) are able to be reviewed by the Tourist Refund Office If the review results in the claim subsequently being approved; a GST adjustment would need to be made.
2(h) Total GST adjustments
This measure is the sum of the GST adjustments that result from underpaid GST revenue, over claimed GST refunds and rejected Tourist Refund Scheme (TRS) claims.
Total GST adjustments equal:
GST adjustments (underpaid GST revenue) plus (+) GST adjustments (rejected TRS claims)
ACBPS also refuses and adjusts GST refund claims lodged by importers to correct overpayments. Data on these GST adjustments is not currently available.
2(i) Compliance yield
This measure reflects the ratio between the Total GST adjustments and the funding provided for compliance. This measure is calculated as:
3. Cost effective administration
3(a) Costs of import processing
This measure is the costs attributed to the GST element of ACBPS’ import processing function.
This function covers the processing of import transactions and associated revenue functions including establishing the liability for GST, wine equalisation tax and luxury car tax. Included under this function are the recording of amounts of deferred GST and the provision of import data to the ATO (including GST deferred data). Also included under this function is the processing and payment of claims for refund of GST, wine tax and luxury car tax.
This function is carried out in relation to:
- all goods imported via Australian ports and airports
- mail imported through all Australian international mail centres
- goods entering Australia with passengers and crew via all Australian ports and airports.
3(b) Costs of export processing
This measure is the costs attributed to the GST element of ACBPS’ export processing function.
This function covers the processing of export transactions including collecting export data and providing it to the ATO.
3(c) Costs of import and export compliance
This measure is the costs attributed to the GST element of ACBPS’ import and export compliance functions.
This function covers compliance activities in relation to self-assessed declarations made by importers. It also covers compliance activities in relation to refund claims that relate to taxable importations.
The costs of compliance activities in relation to the Tourist Refund Scheme are included in item 3(d) below.
ACBPS utilises a range of monitoring, response and enforcement compliance activities that are proportional to client behaviour and consistent with ACBPS’ Regulatory Philosophy.
3(d) Costs of administering the Tourist Refund Scheme
This measure is the costs attributed to the administration of the Tourist Refund Scheme.
This function covers the processing and payment of Tourist Refund Scheme claims and associated compliance activities. This function is carried out in relation to passengers departing from all international airports and seaports in Australia.
3(e) Total costs
This measure is the sum of the costs associated with carrying out ACBPS’ four GST functions.
3(f) Import declarations processed
Owners of imported goods are required by section 68 of the Customs Act 1901 to make a declaration to ACBPS in relation to each imported consignment. Owners that make an import declaration are making a taxable importation (s13-5 GST Act). An ACBPS officer may refuse to deliver the goods concerned unless the GST has been paid [GST Act subsection 13-15(2)].
An import declaration includes all of the information that is required to assess the GST liability.
3(g) Export declarations processed
Owners of goods intended for export that have a FOB value greater than $2,000 are required by section 113 of the Customs Act 1901 to make a declaration to ACBPS in relation to each export consignment.
ACBPS provides the ATO with a monthly export data report. The ATO uses this information in undertaking compliance functions in relation to item G2 on the BAS.
3(h) Total Tourist Refund Scheme claims processed
International travellers can obtain a GST refund under the Tourist Refund Scheme provided they submit a claim to ACBPS that fulfils all of the requirements set out in the regulations.
3(i) Total costs as a per cent of total GST liability assessed
ACBPS assesses the GST liability on all taxable importations. The GST liability assessed by ACBPS on taxable importations is deferred (and accounted for on the BAS) for importers that have been approved by the ATO for GST deferral. In all other cases, ACBPS collects the GST.
ACBPS processes all taxable importations regardless of whether the GST is paid to ACBPS or deferred for payment on the BAS. It is appropriate, therefore, to compare processing costs to the GST liability assessed rather than to compare those costs to the GST collected by ACBPS.
3(j) Total costs as a per cent of total GST collected
This item could be misleading because it compares the processing costs to a small portion of ACBPS’ taxable importation workload. This item needs to be considered in the context of item (i) Total costs as a per cent of total GST liability assessed.