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Claiming GST credits for goods you import

The situations where an importer can claim a GST credit, and examples of when there is no entitlement to a credit.

Last updated 5 June 2018

For Goods and Services Tax (GST), Luxury Car Tax (LCT) and Wine Equalisation Tax (WET) purposes, from 1 July 2015, where the term ‘Australia’ is used in this document, it is referring to the ‘indirect tax zone’ as defined in subsection 195-1 of the GST Act 1999.

If you are seeking to claim a GST credit for the GST you were liable to pay on a taxable importation, you must be the importer of the goods and import the goods solely or partly for a creditable purpose.

Even if your name appears as 'owner' on the import declaration, this may not mean you are the importer for the purpose of claiming a GST credit on the taxable importation.

There are some situations where you are liable to pay the GST on a taxable importation, but you are not entitled to claim the corresponding GST credit.

Importer for the purpose of claiming GST credits

You must be the importer of the goods to claim GST credits. You are the importer of the goods if both of the following apply:

  • you have caused the goods to be brought to Australia for your own purposes
  • you, or your agent, are named as the 'owner' of the goods on the import declaration.

You have caused goods to be brought to Australia if the goods were brought to Australia for application to your own purposes after importation.

You use goods for your own purposes if you sell, lease or hire the goods, use the goods as trading stock or use the goods in the manner consistent with their design or nature.

Situations where you are not entitled to GST credits

If you are a facilitator, such as a customs broker or freight forwarder, you will not be entitled to a GST credit. You are generally not the importer because you have not caused the goods to be brought to Australia for your own purposes. You are a facilitator because you are engaged to handle, store, transport, monitor the goods or process the import declaration on another entity's behalf.

Example: Facilitator named as owner on import declaration

An Australian retailer purchases equipment from a supplier in the United States of America (USA supplier).

The USA supplier engages an Australian logistics company to transport equipment and facilitate the clearance of the goods through Customs as a licensed customs broker.

The logistics company operates a worldwide logistics enterprise. The logistics company is named as 'owner' of the equipment on the import declaration and delivers the equipment to the Australian retailer. The logistics company was liable to pay the GST on the taxable importation.

The logistics company is not the importer because it did not cause the equipment to be brought to Australia for its own purposes. The logistics company merely facilitates the importation and delivery of the equipment to the Australian retailer for the USA supplier.

The logistics company is not entitled to a GST credit for the GST paid on importation.

Whilst both the Australian retailer and the USA supplier caused the goods to be brought to Australia, neither are importers because the logistics company was named as 'owner' on the import declaration.

In this circumstance no entity can claim a GST credit.

End of example

Similarly, a third party contracted to install or assemble the goods on arrival in Australia does not cause the goods to be brought to Australia for their own purposes.

Example: Installer named as owner on import declaration

An Australian manufacturer purchases equipment from a non-resident supplier. The non-resident supplier engages an Australian specialist installer to install the equipment in Australia.

The specialist installer is named as 'owner' on the import declaration and pays the GST on the taxable importation.

The specialist installer did not cause the equipment to be brought to Australia for application to its own purposes after importation: they did not sell, lease or hire the equipment, nor use it in a manner consistent with its design or nature. Therefore the installer is not the importer and is not entitled to a GST credit.

If, however, the specialist installer enters their name as 'owner' on the import declaration, as agent of the non-resident supplier, then the non-resident supplier will be the importer because the following two events have occurred:

  • the non-resident supplier has caused the goods to be brought to Australia to sell to an Australian manufacturer
  • their agent was named as the 'owner' of the goods on the import declaration.

The Australian resident agent of the non-resident supplier would be entitled to the GST credit on the taxable importation if the non-resident supplier is registered, or required to be registered for GST and imported the goods for a creditable purpose.

End of example

Where no agency arrangement exists

In circumstances where a third party is named as 'owner' on the import declaration but is not your agent, the third party will be liable to pay the GST on the taxable importation and will not be entitled to claim a GST credit because they are not the importer.

If you reimburse the GST for which a third party was liable to pay on the taxable importation, you will not be able to claim a GST credit because you are not named as 'owner' of the goods on the import declaration.

In these situations, no-one will be entitled to a GST credit.

Situations where you can claim GST credits

Generally, where goods from overseas are sold and brought into Australia, both the buyer and the seller of the imported goods will be considered to have caused the goods to be brought to Australia for their own purposes. If you are the buyer or seller of the goods and your name appears on the import declaration as 'owner', you are the importer.

Example: More than one entity causes the goods to be brought to Australia

A non-resident supplier causes goods to be brought to Australia to fill an order and complete the sale of the goods to an Australian manufacturer. The Australian manufacturer also causes the goods to be brought to Australia to use in its manufacturing process, by placing the order with the non-resident supplier. The causing of the goods to be brought into Australia does not, in itself, identify the entity that imports the goods.

If the Australian manufacturer is named as the 'owner' on the import declaration, then they are the importer and not the non-resident supplier.

The Australian manufacturer would be entitled to the GST credit if they are registered or required to be registered for GST and imported the goods for a creditable purpose.

End of example

Where an agency arrangement exists

If you authorise an agent to act on your behalf and the agent is named as 'owner' on the import declaration, you must be able to clearly demonstrate that you have an agency arrangement for you to be accepted as the importer.

If you are a:

  • resident principal, you are entitled to the GST credit if you are registered or are required to be registered for GST and you imported the goods for a creditable purpose
  • non-resident principal, a resident agent is entitled to the GST credit if you are registered or required to be registered for GST and you imported the goods for a creditable purpose
  • non-resident principal and your agent is also a non-resident, you are entitled to the GST credit if you are registered or are required to be registered for GST and you imported the goods for a creditable purpose.

Glossary

Agent

A third party you have appointed to enter into transactions on your behalf. The term agent in this context does not extend to the usual service of customs brokers attending to your customs formalities, as they would be acting as a facilitator and not an agent.

Creditable purpose

The purpose for which the goods are imported, that is, goods imported for use in carrying on your enterprise but not for the purpose of a private or domestic nature or that relates to making input taxed supplies.

Customs

The Australian Customs and Border Protection Service.

Taxable importation

Goods that are imported and entered for home consumption (within the meaning of the Customs Act 1901).

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