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  • Terms we use

    Some terms in this information may be new to you or have a specific meaning in GST law.

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    Consumer

    If the entity purchasing your goods is a consumer you need to charge GST on your sales of low value goods to them.

    Your purchaser counts as a consumer if they are either:

    • not registered for Australian GST
    • registered for Australian GST but do not purchase the low value imported goods for their Australian business use.

    You can be sure that GST does not apply to a sale if you obtain both:

    • your customer's Australian business number (ABN)
    • a statement or other information from them that they are registered for GST.

    If you have both of these, you do not need to consider whether the customer is purchasing the goods for use in their business.

    Example 1

    Technology Co, a United States company that is registered for GST, sells printers to Australia.

    Print Co, an Australian company that is registered for GST, imports an A$850 printer from Technology Co for business use. Print Co provides Technology Co with its ABN and states it is registered for GST.

    Technology Co does not charge GST on the sale, as Print Co is not a consumer.

    End of example

    This is different to the test for whether GST applies to imported services and digital products, which is whether the sale is made to an Australian consumer. Part of this includes considering whether the customer is an Australian resident.

    A residency test does not apply in determining whether GST applies to the sale of low value goods. This means GST can apply even if a consumer outside Australia buys a gift that is sent to Australia.

    There are tools to check an ABN is valid and belongs to a customer that is registered for GST.

    See also:

    Information not supplied by customer

    If you do not obtain the customer's ABN and they do not provide either a statement or other information indicating that they are registered for GST, you must treat the customer as a consumer, unless you can determine that they are both registered for GST and importing goods for use in their business in Australia.

    You can confirm they are registered for GST by searching for the customer on the Australian Business Register via the ABN Lookup tool. If your knowledge of a customer or past dealings with them indicates they are running a business in Australia and the purchase is relevant to that business, you can then decide that they are not a consumer.

    However, if the customer is not actually buying the goods for their business in Australia, they will meet the definition of consumer and you will still be liable for the GST on the sale.

    Low value goods

    Low value goods are goods (except for tobacco products or alcoholic beverages) that have a customs value of A$1,000 or less when the price is first agreed with the customer.

    Tobacco products and alcoholic beverages are excluded from the definition of low value goods because GST always applies at the border when these items are imported (regardless of their value).

    For a typical transaction where goods are sold in Australian dollars, the customs value is the price the goods are sold for, minus any amount included for freight and insurance from the place of export to Australia.

    Although you take out these amounts when determining whether the goods are low value goods, charges for freight and insurance will typically form part of the price when you are calculating the GST on the sale.

    If you sell goods in a currency other than Australian dollars and it may be unclear whether they are low value goods (with a customs value under A$1,000). To be certain about whether you should apply GST, you will first need to convert the amount into Australian dollars to determine the customs value.

    If multiple low value goods are sold together (for example, two goods that each have a customs value of A$600), the default rule is that you should charge GST. However, you can apply an exception if it is clear that the goods will be shipped in one consignment and taxed at the border.

    Example 2

    Bicycle Co, a United Kingdom company that is registered for GST, sells bicycles to consumers that are imported into Australia.

    Lin buys a bicycle that is A$900 (excluding GST), including A$50 for shipping to Australia.

    The customs value of the bicycle is A$850 (A$900 less shipping of A$50). Bicycle Co determines the goods are low value goods and it charges GST on the sale.

    Bicycle Co charges Lin a GST-inclusive price of A$990 (the GST is A$90, which is 1/11th of the price) at the checkout on its website.

    End of example

     

    Example 3

    Ted buys a bicycle from Bicycle Co for A$1,250, including A$50 for shipping to Australia.

    The customs value of the bicycle is A$1,200 (A$1,250 less shipping of A$50). Bicycle Co determines the goods are not low value goods and it does not charge GST on the sale to Ted.

    GST (plus any other customs duties) will apply when the bicycle is imported and this will be collected from Ted at the border.

    If Ted also bought a helmet for A$75 (excluding GST) in the same transaction, this would be a low value good. The default rule is that Bicycle Co would charge GST on the sale of the helmet (and not the bicycle).

    However, as the helmet and bicycle have a total customs value over A$1,000, Bicycle Co can apply an exception if it is clear that the goods will be shipped in one consignment.

    End of example

    See also:

    More information:

    Merchants

    When we use the term 'merchant' we mean any seller of low value imported goods. We use this term rather than 'supplier' because for GST purposes, an electronic distribution platform operator or re-deliverer can be treated as the supplier.

    Last modified: 03 Dec 2018QC 52552