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  • Information for transporters and customs brokers

    As of 1 July 2018, GST will apply to sales of low value goods imported by consumers into Australia.

    Businesses treated as the suppliers of these goods will need to register if their sales of low value imported goods to consumers, plus any other sales connected with Australia (meaning sales to which Australian GST applies), are A$75,000 or more in a 12-month period.

    Sales are not counted towards this threshold if GST would not apply (for example, the purchaser is not a consumer or the goods are not low value goods).

    Businesses that are treated as the supplier for GST purposes and may need to register will be:

    • the operator of the electronic distribution platform (EDP) through which the goods are sold
    • the merchant who sell the goods
    • the re-deliverer who helps to bring the goods to Australia.

    Transporters are usually not re-deliverers, as they are typically engaged by the merchant or EDP operator, or they do not provide offshore mailbox or shopping services.

    Next step:

    On this page:

    Interactions with reporting and revenue collection at the border

    Under the new law for GST on low value imported goods, GST will be collected by the EDP operator, merchant, or re-deliverer through the vendor collection model. The A$1,000 threshold for GST, duty and reporting at the border will remain. Generally, this means that low value goods will still enter as non-taxable importations and their flow across the border will not be impacted.

    If goods are imported in a consignment:

    • with a customs value of A$1,000 or less, there is no duty or GST at the time of importation (with the exception of alcoholic beverages and tobacco products)
    • with a customs value over A$1,000, any GST, customs duty, and other taxes and charges will be paid by the importer at the border under existing processes. However, there is a way to prevent GST from applying again at the border, if GST has been charged on the sale.

    The new law is designed so that businesses will typically only charge GST on a sale when GST would not be charged at the border.

    Scenarios relating to GST being charged by businesses or paid at the border

    What is sold?

    Will a registered business charge GST to a consumer on the sale?

    Will GST be payable at the border?

    An item with a customs value of A$1,000 or less (the goods are not GST-free, or tobacco products or alcoholic beverages)

    Yes.

    There is one exception where GST does not need to be charged if it is clear that GST will apply at the border, as the goods will be shipped to Australia within a consignment where the total customs value of the items in the consignment exceeds A$1,000.

    GST is not payable at the border if the goods are imported in a consignment with a customs value of A$1,000 or less.

    If the goods are imported in a consignment over A$1,000, GST will not be payable at the border if GST was charged on the sale of the goods and the import declaration contains the required information.

    If this has not happened, GST will be paid at the border. The purchaser may seek a refund of GST charged by providing the supplier with a declaration or evidence that they paid GST at the border.

    See preventing GST from being charged again at the border.

    An item with a customs value over A$1,000

    No

    Yes

    Tobacco products or alcoholic beverages

    No

    Yes

    Goods that are GST-free

    No

    No

    See also:

    Impacts for transporters and customs brokers

    Businesses that are treated as the supplier of low value goods for GST purposes and are registered for GST are legally required to ensure that relevant tax information is included on the customs documents for low value goods.

    These businesses must also include information on receipts issued to customers when they charge GST on the sale.

    This requirement does not apply to goods that are not low value goods.

    This means the requirement will apply to either:

    • the operator of an EDP through which the goods are sold
    • the merchant who sells the goods
    • a re-deliverer.

    The business that is the supplier for GST purposes must also ensure that certain information is provided in the customs documentation for their supply.

    If your client is a business to which this legal requirement applies, it is likely that they will ask you to assist them to meet this requirement, for example, by providing this information to you for inclusion with the customs documentation for their supply. You should consider how you will capture and transmit this information. Additional fields have been added to the customs documents for this information to be included.

    Information to include on customs documents

    Information that businesses must provide

    Matching fields on the customs documents

    GST registration number of the business treated as the supplier for GST purposes.

    When the business registers, the ATO issues them with a unique identifier which, depending on what registration system they are using, will be either:

    • an ARN (ATO reference number) or
    • an ABN (Australian business number)

    The ARN is 12 digits and the ABN is 11 digits.

    This is the vendor ID in the Integrated Cargo System (ICS), which is a field on both the self-assessed clearance and import declaration.

    ABN of the purchaser, if the supplier for GST purposes has it.

    This is the importer ID in the ICS, which is a field on both the self-assessed clearance and import declaration.

    Whether GST has been charged on the sale of each of the goods.

    This will be captured on the import declaration as a GST-paid exemption code.

    If this information is unavailable or not provided to you, you do not need to take extra steps to source this information, you will continue to enter and clear goods as you do now.

    Any penalties for failure to take reasonable steps to meet this requirement will apply to the business that is the supplier for GST purposes.

    The fields in the ICS intended to capture this information (see table above) are not mandatory from your perspective. In some situations, you may still submit a cargo report or import declaration without this information. This is because there are legitimate situations where this information will not be provided, such as where the business does not meet the threshold to register for GST, or for gifts sent by a family member. However, where you have this information, you should include it.

    See also:

    Impacts for the self-assessed clearance

    For goods (except for alcoholic beverages, tobacco and tobacco products) that enter Australia in a consignment with a customs value of A$1,000 or less, a self-assessed clearance must be completed.

    The relevant fields on the self-assessed clearance are:

    • the vendor ID field, which captures the GST registration number (either an ARN or ABN) of the supplier for GST purposes
    • the importer ID field, which captures the Australian business number (ABN) of the purchaser (if applicable).

    Examples for completing the self-assessed clearance

    Example: electronic distribution platform (EDP) operator is responsible for GST on low value goods sold to a consumer

    Phoebe purchases a mobile phone with a customs value of A$600 from a merchant in China, through a website called Electronics Marketplace. She gets the mobile phone sent to her Aunt in Perth, Australia. Electronics Marketplace is registered for GST.

    Electronics Marketplace is an EDP operator which is responsible for GST on the sale made by the merchant.

    Electronics Marketplace charges GST on the sale to Phoebe, and pays it to the ATO in its return.

    Electronics Marketplace requires merchants who sell low value goods through its website to pass on relevant information provided on its commercial documentation through the logistics chain, which can be used to fill in the customs documents.

    For this sale, the relevant information is Electronic Marketplace's GST registration number (an ARN) and that GST was charged on the sale.

    The transporter receives this commercial documentation from the merchant. It completes the self-assessed clearance declaration on Phoebe's behalf.

    In completing the self-assessed clearance declaration, the transporter includes Electronic Marketplace's ARN in the vendor ID field.

    End of example

     

    Example: merchant is responsible for GST on low value goods sold to a consumer

    Jacob is a consumer who purchases a cake decorating kit with a customs value of A$200, from the website of a merchant in New Zealand called Cake Matrix. He gets the kit sent to an address in Melbourne, Australia. Cake Matrix is registered for GST in Australia.

    As the goods are low value goods sold to a consumer, Cake Matrix charges GST on the sale. It pays the GST to the ATO in its return.

    Cake Matrix provides its GST registration number, which is an ARN, to the transporter and informs them that it charged GST on the sale.

    The transporter cargo reports their incoming shipments, and completes the self-assessed clearance declaration on Jacob's behalf as a part of this, using the commercial documentation and/or information provided from Cake Matrix.

    In completing the self-assessed clearance, the transporter includes Cake Matrix's ARN in the vendor ID field.

    End of example

     

    Example: low value goods sold to a purchaser who is not a consumer

    Davor purchases a mobile phone with a customs value of A$600 from a merchant in China, through Electronics Marketplace's website. He gets it sent to his address in Brisbane, Australia. As he is registered for GST and will use the mobile phone for his business, he provides Electronics Marketplace with his ABN and states he is registered.

    Electronics Marketplace does not charge GST on the sale because Davor is not a consumer.

    Electronics Marketplace requires merchants who sell low value goods through its website to pass on relevant information provided on its commercial documentation through the logistics chain, which can be used to fill in the customs documents.

    For this sale, the relevant information is Electronic Marketplace's GST registration number (an ARN), Davor's ABN, and that GST was not charged on the sale.

    The transporter receives this commercial documentation from the merchant. It completes the self-assessed clearance declaration on Davor's behalf.

    In completing the self-assessed clearance declaration, the transporter includes Electronic Marketplace's ARN in the vendor ID field, and Davor's ABN in the importer ID field.

    End of example

    Impacts for the full import declaration

    For goods that enter Australia in a consignment with a customs value of more than A$1,000, a full import declaration must be completed.

    The relevant fields on the import declaration are:

    • the vendor ID field, which captures the GST registration number (either an ARN or ABN) of the supplier for GST purposes
    • the importer ID field, which captures the Australian business number (ABN) of the purchaser (if applicable)
    • the GST-paid exemption code, which is used to show if GST has been charged on the sale of each of the goods.

    The requirement to ensure that information is included on customs documents only applies for sales of low value goods. If the goods are not low value goods, this information will not need to be provided by businesses or included on the import declaration.

    Preventing GST from being charged again at the border

    As GST will be collected through two different models, it is important that there are clear rules on the interaction between the two models to allow users to avoid double taxation.

    For goods imported in a consignment:

    • with a customs value of A$1,000 or less, there is no duty or GST at the border (with the exception of alcoholic beverages and tobacco products)
    • with a customs value over A$1,000, the default rule is that GST will be paid at the border.

    However, GST will not need to be paid again at the border if:

    • GST was charged on the sale on low value goods (that is, items with a customs value of A$1,000 or less that are not tobacco products or alcoholic beverages) to a consumer, and
    • the import declaration has the required information, meaning
      • the vendor ID field contains the GST registration number of the supplier for GST purposes (either an ARN or ABN)
      • the GST exemption code 'paid' is included for the items where you have information that GST was charged on their sale.
       

    Where these requirements are satisfied, GST is not payable at the border for the items with the GST exemption code. However, any customs duty and clearance charges will still be paid by the importer under existing border process.

    If the commercial documentation shows that GST has been charged on only some of the items, these items need to be entered on separate lines in the ICS. This is because you can only use the GST exemption code when you have information that GST was charged at point of sale.

    You should not use the GST exemption code for an item that is not a low value good, because it was sold with a customs value over A$1,000 (for example, an A$2,000 computer). GST should not be charged on the sale of these items and the purchaser can seek a refund of GST charged on the sale.

    If the required information is not included on the import declaration, GST will still be payable at the border. The purchaser can seek a refund of GST charged on the sale by providing the supplier with a declaration or evidence that they paid GST at the border.

    More information for your clients is provided at Preventing GST from being charged twice.

    Examples for completing the import declaration

    Example: GST charged on sale of low value goods that are imported in a consignment over A$1,000

    Victoria is a consumer who buys four bridesmaids' dresses that each have a customs value of A$300 from Stewart Bridal's online store. She gets the dresses sent to her address in Alice Springs, Australia.

    Stewart Bridal is registered for GST and it is the supplier for GST purposes.

    The default rule is that Stewart Bridal would charge GST on the sale of the four dresses, as they are each low value goods. There is an exception where Stewart Bridal would not need to charge GST on the sale if it was clear the goods would be imported in one consignment over A$1,000.

    Stewart Bridal was unsure about how the items would be shipped because some sizes of the bridesmaid dresses were on backorder. Therefore, it had to apply the default rule and charge GST on the sale of all the items.

    It later turns out that all of the goods are shipped in one consignment over A$1,000. The customs broker completes an import declaration on Victoria's behalf.

    To do this, the customs broker enters the information provided on the commercial documentation that Stewart Bridal provided with the consignment. This commercial documentation is the same as the receipt that Stewart Bridal was required to provide to Victoria. This receipt contains the relevant information that Stewart Bridal has to ensure is provided on customs documents for the sale.

    On the import declaration, the customs broker puts Stewart Bridal's GST registration number, which is an ARN, in the vendor ID field, and it inputs the GST exemption code 'paid' for the whole consignment.

    As the notification requirements have been met, Victoria does not need to pay GST at the border. Victoria will pay any other applicable customs duty, taxes and clearance charges under existing processes.

    End of example

     

    Example: GST charged on sale of low value goods (but not on goods that are not low value goods) that are imported in a consignment over A$1,000

    If instead of the example above, let's assume that Victoria bought four bridesmaids' dresses that each have a customs value of A$300 and also a wedding dress with a customs value of A$1,500.

    As in the previous example, Stewart Bridal was unsure whether all dresses would be consigned together, so it charged GST on each of the low value goods in the transaction.

    Stewart Bridal would not charge GST on the wedding dress because this is not a low value good.

    The commercial documentation provided shows that GST has been charged on the four bridesmaids' dresses, and not on the wedding dress.

    When the customs broker is completing the import declaration, they ensure that the GST-paid exemption code is entered against the bridesmaid dresses, along with Stewart Bridal's GST registration number as the vendor ID.

    No exemption would be listed against the line recording the wedding dress. GST will be paid on this item by Victoria at the border.

    Victoria will pay any applicable customs duty, other taxes and clearance charges on all of the items under existing processes.

    End of example
    Last modified: 21 Sep 2017QC 53353