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  • Deferred GST

    From 1 July 2015, for GST, luxury car tax and wine equalisation tax purposes, where the term ‘Australia’ is used here, it is referring to the ‘indirect tax zone’ as defined in subsection 195-1 of the GST Act.

    The deferred GST (DGST) scheme allows you as an importer, to defer payment of GST on all taxable importations into Australia. You need approval to do this, which you can get by applying to us.

    Check the rules below to help work out if you are eligible to participate in the scheme.

    Apply for DGST status

    If you are eligible and want to apply for DGST status, you can complete the application online.

    Next step:

    Check whether you are eligible

    To be eligible to participate in the deferred GST scheme, you must:

    • have an ABN
    • be registered for GST (you can register for GST and apply for an ABN on the one form if you don't already have an ABN)
    • lodge your activity statements online
    • lodge your activity statements monthly (if you are lodging quarterly, you can elect to lodge monthly)
    • make your activity statement payments electronically.

    Additionally, you may not be eligible if:

    • you are not up to date with your tax returns or payments – this includes members of GST groups, branches and joint ventures (see GST group members and representatives)
    • you or anyone relevant to the application has, in the past three years, been convicted or penalised by a court for specific offences.

    Changing to monthly lodgment

    When you elect to shift from quarterly to monthly lodgment, the change will not take effect until the start of the next quarter. This means you will not be eligible to defer GST on your imports until the start of the next quarter.

    GST group members and representatives

    If you are a non-representative member of a GST group, you are not required to lodge an activity statement. However, you may be eligible to apply for the DGST scheme.

    Your nominated GST group representative will also need to apply for the DGST scheme and lodge monthly activity statements online.

    GST deferred by non-reporting GST group members will be accounted for on the GST group representative's activity statement.

    Court convictions or penalties

    You may not be eligible to participate in the DGST scheme if, in the past three years, you or anyone relevant to the application has been convicted or penalised by a court for offences in relation to:

    • taxation requirements
    • customs requirements
    • the inaccurate description of goods
    • trade practices
    • fair trading
    • defrauding the Australian Government.

    Persons relevant to the application include public officers, directors, office bearers, partners and trustees of the applicant organisation.

    In the application you must state if you or anyone relevant to the application has been convicted or penalised by a court for any relevant offences. We may ask you to provide additional information about the nature of the offence or penalty before making a decision about your application.

    This will help work out if you are eligible to use the deferred GST scheme when importing taxable goods into Australia.

    Deferred GST obligations

    If you participate in the deferred GST scheme, you must meet the following requirements.

    • Lodge and pay your business activity statements (BAS) online through  
      • the Business Portal
      • Standard Business Reporting (SBR)
      • your registered tax and BAS agent – lodging on your behalf using the Tax or BAS agent Portal
      • our online services for individuals and sole traders – using your myGov account.
    • Lodge on time – if you do not lodge on time, you risk being withdrawn from the deferred GST scheme.
    • Keep up to date with payments – if you default from a payment plan, you may be withdrawn from the deferred GST scheme.

    Note: The electronic lodgment service (ELS) can't be used for deferred GST activity statement lodgment.

    Deferred GST calculation

    If you have deferred the GST on a taxable importation and the goods will be used in your business, you are able to claim a GST credit for the amount of GST that has been deferred. On each monthly BAS, you should be claiming the full amount of the deferred GST – as advised by the ATO at label 7A – as a credit on your BAS at label 1B. The liability for deferred GST should always be offset on the BAS for the same month.

    Example:

    Sarah is a computer wholesaler who imports computers and then sells to computer retailers. She is approved for Deferral of GST on imports.

    June month

    Sarah imports some computers with a cost of $20,000 and the GST deferred on this shipment is $2,000. She made other business purchases in Australia of $16,500 which included a total of $1,500 GST. Sarah made $33,000 worth of computer sales to retailers during June, which included $3,000 of GST collected (these computers were a combination of existing and new stock).

    Sarah will complete her June monthly BAS as follows:

    Sarah's BAS for June

    BAS label

    Dollar amount

    BAS label

    Dollar amount

    Label G1 – total sales

    $33,000

    Label G11 – non-capital purchases

    $38,500

    Label 7A – deferred GST

    $2,000

    Deferred GST is pre-filled by the ATO

    Deferred GST is pre-filled by the ATO

    Label 1A – GST on sales

    $3,000

    Label 1B – GST on purchases

    $3,500

    Label 8A

    $5,000

    Label 8B

    $3,500

    Label 8A

    $5,000

    Label 9 – payment

    $1,500

    Sarah’s GST on purchases (Label 1B) is the total of the GST she paid on her Australian purchases and her claim for her deferred GST amount ($2,000 + $1,500).

    Sarah’s total purchases (G11) are the total of her Australian purchases and the importation, including GST ($16,500 + $22,000).

    End of example

    Note: Simpler BAS clients will not need to complete Label G11.

    Revoking the deferred GST scheme

    To continue to benefit from deferring your GST, make sure all of your tax obligations are up to date. If you don't, you'll no longer be part of the deferred GST scheme which means:

    • customs will keep your goods until you pay the GST
    • you'll have to register for the scheme all over again.

    See also:

    For more information on DGST, phone 1300 130 915 between 8.00am and 5.00pm EST/EDT, Monday to Friday.

      Last modified: 30 Aug 2018QC 17118