The following information explains:
- how and when GST is payable on imports
- circumstances where a GST payment on imported goods can be deferred
- when a taxable supply of goods that are imported can be made
- how to claim GST credits and the importation evidence required.
Goods and services tax (GST) is payable on most goods imported into Australia (taxable importations).
GST on a taxable importation is payable by businesses, organisations and private individuals, whether they are registered for GST or not. However, if you are a GST-registered business or organisation and you import goods as part of your activities, you may be able to claim a GST credit for any GST you pay on those goods.
- GST definitions – GST credit
The Department of Home Affairs collects GST on taxable importations. The GST payable is 10% of the value of the taxable importation.
The value of taxable importation is the sum of:
- the customs value of the goods
- any customs duty payable
- the amount paid or payable to transport the goods to their place of consignment in Australia
- the insurance cost for that transport
- any wine tax payable.
Generally, GST is payable before the goods are released by Home Affairs. If you are not registered under the deferred GST scheme then the GST is payable at the same time, at the same place, and in the same manner as you would customs duty (or would be payable if the goods are subject to customs duty).
Deferring the payment of GST on imported goods
If you are an importer and are registered for GST, you may be able to defer the payment of GST by participating in the deferred GST scheme.
The scheme allows you to defer the payment of GST on taxable importations until the first activity statement you lodge after the goods are imported. You will have to meet certain criteria to be eligible to participate in the scheme.
When an assessment is made on imported goods
For taxable importations made on or after 1 July 2012, an assessment of GST, luxury car tax (LCT) or wine equalisation tax (WET) payable is made when the declaration has been received by Home Affairs and they have provided a declaration advice. Together these documents form the assessment notice.
Similarly, activity statements for tax periods starting on or after 1 July 2012 are treated as assessments when you lodge them. A period of review in which amendments can be made applies for these assessments.
If the payment of GST on importation is deferred to the next monthly activity statement, it does not form part of the net amount on that activity statement.
The deferred GST amount forms part of the assessment made on the importation of the goods. The period of review applies from when the assessment on importation is made, not the assessment for the period in which the deferred amount is payable.
Some goods imported into Australia are not subject to GST.
These are goods that:
- would have been GST-free or input taxed if supplied within Australia such as basic food, certain medical aids and appliances, cars for use by certain people with disabilities and precious metals
- qualify for certain customs duty concessions.
Subject to any relevant by-laws, goods that qualify for certain customs duty concessions and are also non-taxable for GST include the following items from schedule 4 to the Customs Tariff Act 1995:
- item 4 – calendars, catalogues, overseas travel literature, overseas price lists or other overseas printed matter
- item 10 – goods that are owned by the government of a foreign country, for the official use of that government, and are not to be used for purposes of trade
- item 11 – goods that are for use by or for sale to persons who are the subject of a Status of Forces Agreement between the government of Australia and the government of another country
- item 15 – goods
- imported by passengers, ship or aircraft crew; goods that are the property of a person who has arrived in Australia on an international flight; goods purchased by persons from an inwards duty free shop
- brought or sent into Australia by members of the Defence Force stationed outside Australia
- imported by members of the New Zealand, Canada or United Kingdom forces
- passengers' personal effects, furniture or household goods
- item 18 – goods returned to Australia after repair or replacement, free of charge under warranty or supplied as part of a product safety recall
- item 21 – goods imported for repair or alteration then exported
- item 21A – goods imported by the holder of a Tradex order under the Tradex Scheme Act 1999
- item 23 – certain donated or bequeathed goods by an entity or organisation outside Australia to an organisation established in Australia
- item 24 – will or intestacy goods that are not for sale
- item 25 – trophies won outside Australia; or decorations, medallions or certificates awarded outside Australia; trophies or prizes sent by donors resident outside Australia for presentation or competition in Australia
- item 26 – goods, other than tobacco, alcohol and bulk orders, with a value less than an amount prescribed by by-law (currently at or below $1,000)
- item 27 – samples of negligible value (value as prescribed by by-law).
Sales of goods that are to be imported into Australia that have a customs value at or below $1,000 can be non-taxable importations (see item 26).
However, the supply of low value goods into Australia can be a taxable supply if the supply is connected with Australia.
Supplies of imported goods
If you are the supplier of imported goods, your supply will be connected with Australia if one or more of the following applies:
- you import the goods
- you install or assemble the goods in Australia
- your agreement to sell the goods occurs after the goods have been imported
- you have purchased the goods that you are selling from the importer of those goods and on-sell the goods within Australia.
The following example looks at imported goods supplied under a trial period, where it is a non-taxable importation but it is likely to be a taxable supply.
Hot Gadgets, an Australian supplier registered for GST, offers a new 'Magic Sweeper' at an introductory price of $259 through its call centre.
Hot Gadgets are offering customers a 30 day trial period to try the magic sweeper before purchase. Under the terms and conditions the prospective customer is under no obligation to purchase the sweeper until the 30 day trial period has expired. If the sweeper is returned before the end of the trial period, no payment is required.
Hot Gadget's factory and warehouse are based in Hong Kong and all orders are processed and posted directly to prospective customers from overseas. The goods have a value of less than $1,000 and; therefore, will be a non-taxable importation unless ordered in bulk.
At the end of the 30 day trial period, if the goods have not been returned, Hot Gadget's customer has then purchased the goods and Hot Gadgets will charge the customer's credit card.
The purchase of the goods has occurred after the goods were imported; therefore the supply is connected with Australia. Hot Gadgets makes a taxable supply if all the other elements of the taxable supply rules are met.End of example
If the customer pays at the time of order then this will indicate that the supply has
been committed to at the time of making the order. This would not be a trial period arrangement even if the customer is entitled to return the goods within 30 days.
- GSTR 2000/31 – Goods and services tax: supplies connected with Australia
- Taxable sales – Sales connected with Australia
Importers of low value goods
You are the importer of low value goods if both of the following apply:
- you have caused the goods to be brought to Australia for your own purposes.
- you or your agent have completed the customs formalities or would be responsible for the customs formalities.
Generally you will be regarded as the importer of goods when you order goods either via a website, phone, or in-store from an Australian retailer; you accept the retailer's terms and conditions to be responsible for any customs formalities; and the goods are sent from overseas to you in Australia.
You have caused goods to be brought to Australia if the goods were brought to Australia for application to your own purposes after importation.
You use goods for your own purposes if you sell, lease or hire the goods, use the goods as trading stock or use the goods in the manner consistent with their design or nature.
If goods are sent to Australia by international post, the addressee on the low value goods will generally be the entity that Home Affairs is authorised to release those goods to. In this instance, the addressee will be the entity who would complete the customs formalities or be responsible for doing so.
If low value goods are sent to Australia by air or sea cargo arrangements, the goods would generally be released to the ultimate consignee.
A freight forwarder or logistics company would not normally be the ultimate consignee. The ultimate consignee would normally be the purchaser unless the seller nominates themselves as the ultimate consignee. In this instance, the ultimate consignee will be the entity who has completed the customs formalities or would be responsible for doing so.
You are entitled to claim a GST credit if all of the following apply:
- you make a taxable importation
- are registered for GST
- you import the goods for a creditable purpose.
You can claim GST credits on imported goods in the activity statement relevant to the tax period in which you pay the assessed GST on the import of those goods.
Evidence of GST paid on importation
Before you can claim a GST credit, you must have documentation showing the goods have been imported and GST was either paid or deferred at the time the goods were entered for home consumption.
Goods are entered for home consumption by completing an import declaration and submitting it to Home Affairs. When the customs duty and GST has been paid, Home Affairs release the goods for use in Australia.
If you use an intermediary to complete the customs formalities – for example, a licensed customs broker – they can:
- provide you with documents from Home Affairs, or
- agree to keep the documents on your behalf and provide them when needed.
You must not claim a GST credit if you do not hold relevant documentation or have ready access to that documentation.
The following are examples of acceptable documentation to show that the goods have been imported and entered for home consumption.
Home Affairs requires an import declaration for goods to be entered for home consumption. There are two types of import declarations that can be used to enter goods for home consumption – they are both relevant for GST credits:
- Import Declaration: N10
This document provides details of values and charges for the imported goods that are initially entered for home consumption, and includes details of deferred GST and total payable amount.
- Import Declaration (out of warehouse): N30
This document provides details of values and charges for the imported goods that are entered for home consumption when they are cleared out of a customs licensed warehouse. This document also includes details of deferred GST and total payable amount.
Home Affairs provides an official receipt for payments received, including details of total payable GST.
As an importer either you or your customs broker/agent need to keep the relevant import declaration. The status of the declaration needs to be 'finalised'. You also need to keep the related matching official receipt from Home Affairs (this document contains details of total amount paid).
See also:Describes how and when GST is payable on imports, payment deferral, how to claim GST credits, and importation evidence.