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  • When to charge GST

    You are only required to charge GST on a sale of low value imported goods if it is a taxable sale. A sale is taxable if:

    • it is connected with Australia
    • you are registered or required to be registered for GST
    • it is made for payment and is part of conducting your business (or it is treated as being part of your business because you are an electronic distribution platform operator or a re-deliverer)
    • the good sold is not GST-free or input taxed.

    From 1 July 2018, a sale is connected with Australia if the:

    GST does not apply to sales of low value imported goods made to Australian GST-registered businesses making the purchase for business use.

    The entity that charges GST on these sales can be the merchant who sells the goods, an electronic distribution platform operator, or a re-deliverer. If more than one of these entities is involved in the sale, you will need to work out who charges GST.

    Sales of imported goods are connected with Australia under existing rules if the merchant is the importer.

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    Australian GST

    The GST rate in Australia is currently 10%, meaning GST is 1/11th of the amount you charge for sales of low value goods imported by consumers. However, if you are a re-deliverer, special rules apply.

    Some sales don’t include GST (for example, GST-free sales, which are known as 'zero-rated' sales in some other countries).

    If you sell low value imported goods to consumers (or you are an EDP operator or re-deliverer that is treated as the supplier for GST purposes), you may need to:

    • register for GST and meet reporting, payment and record-keeping requirements
    • include GST in the price of low value imported goods
    • ensure that correct information is provided to customers and included on customs documents.

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    Converting to Australian dollars to determine whether goods are low value goods

    If goods are sold in a currency other than Australian dollars and it is unclear whether they are low value goods, you will need to convert the amount into Australian dollars. This conversion is only needed if the customs value of the goods is going to be close to A$1,000. Goods are low value goods if their customs value is A$1,000 or less.

    You can convert these amounts using the Department of Home Affairs (PDF 497KB)This link will download a file for the day when the price for the goods is first agreed with the customer.

    You can also use the following exchange rate options:

    • the Reserve Bank of AustraliaExternal Link (RBA) rate, or a reference rate published by another central bank (such as the European Central Bank)
    • an exchange rate that is consistently higher than the RBA rate in terms of units of foreign currency per Australian dollar provided by a foreign exchange organisation – this includes an exchange rate offered to buy Australian dollars from an organisation that provides exchange rates publicly
    • a rate published by a foreign exchange organisation (for example, a commercial bank)

    You must use your particular exchange rate consistently.

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    Exception for multiple goods that total over A$1,000

    The law is designed so that GST is only charged once. If multiple low value goods are grouped together in one consignment, GST can be charged when they are imported instead of when they are sold.

    To apply the exception and not charge GST on a sale, you must reasonably believe that a number of low value goods will be shipped to Australia as one consignment with a total customs value over A$1,000. This means they will be taxed at the border.

    If you sell multiple goods with a total customs value of more than A$1,000 in one transaction:

    • you do not need to charge GST on the sale if it is clear that the goods will be sent to Australia in one consignment (and therefore the GST will be paid at the border)
    • you will need to charge GST on the sale if you are unsure whether the goods will be sent to Australia in one consignment.

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    Example

    Jewellery Co, a United Kingdom company that is registered for GST, sells jewellery that is imported into Australia by consumers.

    Nancy buys two necklaces for A$750 each, including A$50 for shipping to Australia and insurance. Each necklace is a low value good.

    However, under Jewellery Co's standard business processes, it is clear that the necklaces will be shipped in the same package to Australia. Therefore, the necklaces will be shipped in one consignment with a customs value over A$1,000.

    Jewellery Co does not charge GST on the sale to Nancy because it applies the exception.

    If Jewellery Co was unsure whether the necklaces would be shipped in one consignment, it would have charged GST on the sale to Nancy.

    End of example

    Preventing GST from being charged twice

    Processes have been established to prevent double taxation of goods that are imported in a consignment with a total customs value over A$1,000. This is to prevent GST being charged twice (charged once on the sale of goods and then charged again at the border).

    If you are registered for GST and sell low value imported goods (or are treated as the supplier) you must ensure that the relevant information is provided on the customs documents – for example the self-assessed clearance or import declaration.

    An import declaration is required if goods have a customs value over A$1,000 when they are imported. If the relevant information is provided on the import declaration, showing that GST was correctly applied to the sale of low value goods, then GST will not apply at the border.

    To prevent GST applying at the border you will need to ensure the following information is included on the import declaration:

    • your GST registration number (this is either your ARN or ABN)
    • the customer's ABN (if you have it and if they are a GST registered business)
    • information indicating which goods you charged GST on (displayed by using the GST-paid exemption code).

    You also need to provide a receipt that the consumer could use to show to their customs broker that GST has been charged on the sale.

    If this information is not provided on the import declaration, GST will be charged at the border. In this situation, the customer will have paid GST twice.

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    GST refunds – when GST is charged twice

    GST may be charged twice if:

    • information is not included in the customs documents, resulting in GST being charged at the border
    • GST was charged on the sale of goods that were not low value goods, resulting in GST still being payable at the border.

    In these situations the customer can seek a refund of the GST you have charged them. This applies if you charged GST on the sale of goods:

    • that are not low value goods (such as an item with a customs value exceeding A$1,000 or tobacco products or alcoholic beverages)
    • to a GST registered business.

    You can reimburse the customer for the GST you charged if they provide you with a declaration or evidence that they paid GST at the border.

    Once you have reimbursed the customer for the GST you charged, you will not need to pay GST on that sale to the ATO. If you have already paid GST to the ATO on that sale, you will be entitled to make an adjustment to reduce the GST payable in your next GST return.

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    Sales that were made before 1 July 2018

    GST will generally apply to sales of goods where the invoice is issued or payment is received on or after 1 July 2018. It will not apply to sales made earlier (unless GST applies under existing rules) even if the goods do not reach Australia until after 1 July 2018.

    However, in an event where goods were purchased from an international supplier before 1 July 2018, but the services of a re-deliverer are used to bring the goods to Australia the invoice date of the re-deliverer will count as the sale date. Therefore, if the re-deliverer does not process or invoice you until after 1 July 2018 then GST will apply to the sale.

    Last modified: 03 Dec 2018QC 52553