Department of Immigration and Border Protection

On 1 July 2015, the new Department of Immigration and Border Protection (DIBP) was established, bringing together the functions of the existing Department of Immigration and the disestablished Australian Customs and Border Protection Service into one department. Its operational enforcement arm, the Australian Border Force, is responsible for the collection of customs duty on imported goods at the border as well as GST, luxury car tax and wine equalisation tax. It also administers the deferral of GST on imported goods for registered importers of the GST Deferral Scheme. Its role is to control, detect, deter and treat non-compliance for both imports and exports of goods.

DIBP achieved the following results:

  • collected $3.53 billion gross GST and $24.67 billion deferred GST on imported goods
  • cleared 4.0 million import declarations and self-assessed clearance declarations
  • processed 37.9 million import lines with an import value of $270.61 billion
  • cleared 1.4 million export declarations
  • processed 4.3 million export lines with an export value of $257.08 billion
  • administered 746,811 claims under the tourist refund scheme (TRS), approving 96.1% of the claims resulting in refunds of $167.6 million of GST and wine equalisation tax
  • compliance activities resulted in the rejection of refund claims with a GST value of $6.3 million.

DIBP works collaboratively with other key agencies to ensure that all revenue liabilities on imported goods are payable and collected. They do this by providing assurance that revenue, including customs duty and indirect taxes, are correctly paid and deferred.

Pre-clearance intervention and post-transaction verification functions

Pre-clearance intervention (PCI) and post-transaction verification (PTV) functions are key treatments for a wide range of border risks, including revenue leakage. Revenue leakage can occur through undervaluation, misclassification and non-declaration of goods, false claims for GST exemptions, preferential treatment under free trade agreements, duty refunds and concessions.

DIBP conducts PCI activities before the release of the goods from customs control and PTV activities, including audits, after the release of goods from customs control.

In 2014–15, DIBP compliance activities identified a total of $130.1 million in GST understatements. This is an increase of 62% or $50.0 million compared with the previous year. The increase this year includes a voluntary disclosure of $52.1 million; without this disclosure, 2014–15 results would be similar to those in 2013–14.

Table 25: GST understatements 2011–12 to 2014–15

GST understatements










Traditional revenue risk areas will continue to be a focus of attention in 2015–16 including undervaluation, misuse of origin and concessions and misclassification, and the links to serious organised fraud and other crimes. However, integration and interconnection between markets is continuing apace, which means patterns of trade are becoming less predictable with goods sourced and delivered through increasingly complex chains of supply and ownership. Both trade liberalisation in the form of regional and bilateral trade agreements, and trade protectionism, increase complexity. Economic integration and complexity mean more opportunity to obscure sources, origins, destinations and actors. This has an impact because we assess the risk associated with trade, including revenue leakage, from this information.

Analysis of the GST risk is that the landscape is relatively stable and that an effective compliance program is in place that is proportionate to the GST risk at the border. This is supported by revenue leakage estimates. However, a range of matters, including changes to policy and legislative settings, can impact the GST risk within a short period.

The compliance activities undertaken by DIBP (and previously by the ACBPS) provide a level of assurance on revenue receipts for the purposes of DIBP financial statements, with a level of confidence in reporting compliance by importers that would not normally be subject to any form of compliance activity. DIBP applies Australian Accounting Standards (AASB 1031), which specifies 5% as the materiality level for measurement of revenue leakage. This standard is accepted by ANAO.

Table 26: GST leakage 2010–11 to 2013–14

GST leakage*









Not available





Note: The figures above reflect the estimated maximum errors (both overstatements and understatements) at the 95% confidence interval. At time of publication, the 2013–14 GST leakage estimate was not available.

Pre-clearance intervention activities

The customs value of imported goods assessed through pre-clearance intervention activities was approximately $21.7 billion (this does not include the value of imported goods subject to compliance activity).

Targeted activities resulted in checks on 130,342 import documents (import declaration, self-assessed clearance declaration, air cargo report and sea cargo report), which identified GST understatements of $6.9 million and GST overstatements of $65,718.

Random sampling activities resulted in checks on 6,032 import documents that identified GST understatements of $220,537 and GST overstatements of $280,459.

Post-transaction verification activities

PTV – Formal audit

  • The customs value of imported goods assessed through formal audit activity was approximately $18.9 million
  • DIBP conducted 115 targeted revenue audits, which identified GST understatements of $4.2 million and GST overstatements of $25,310.

PTV – Non-audit

  • PTV non-audit activities include assessment of complex voluntary disclosures, desktop activities, profiles, leverage exercises and revenue adjustments resulting from cargo control checks of premises
  • The customs value of imported goods assessed through non-audit activities was approximately $3.36 billion
  • Non-audit activities identified GST understatements of $104.0 million and GST overstatements of $151,590
  • These non-audit activities included assessment of 79 complex voluntary disclosures, which identified GST understatements of $91.6 million.

CASE STUDIES: Tourist refund scheme

Lodgment of false TRS claims resulted in a taxpayer being issued with assessments of $75,508 for overpaid GST and a penalty amount for intentional disregard of the law. Prior claims lodged by the taxpayer were initially accepted in good faith as being true and correct but officers at the Tourist Refund Office became suspicious when another associated individual was investigated for presenting identical tax invoices. The supplier of the alleged goods confirmed that the tax invoices used to make the TRS claims by the taxpayer over a number of years were all false. Further investigation revealed identical tax invoices by two other associated individuals.

Another TRS case completed during 2014–15 found a number of staff at a restaurant involved in lodging TRS claims for purchases they did not make. Assessments of $107,181 for overpaid GST, wine equalisation tax and penalty amounts were raised on one of the taxpayers who admitted to lodging false claims from 2007 to 2014.

The taxpayer admitted to not buying the goods that were paid for by a person residing overseas who also paid for the taxpayer’s airfares and travelling costs in taking those goods overseas.

End of example
    Last modified: 14 Dec 2015QC 47462