If you are a consumer (not a GST registered business) and you buy imported services, digital products and low value imported goods, the price may include goods and services tax (GST).
GST applies at the point of sale in the same way as when you buy goods from businesses in Australia. You may notice the GST amount on your receipt for these purchases.
However, as with sales from businesses within Australia, some overseas suppliers may not be required to register for GST (because they do not reach the A$75,000 GST registration turnover threshold) and will not charge you GST.
When purchasing imported services, digital products and low value imported goods, you may notice that GST is:
- included in the advertised price
- added at the checkout
- included on your receipt or order confirmation.
When purchasing low value imported goods, shipping and insurance costs are part of the price of the delivered goods that GST is calculated on.
GST doesn't apply:
- when overseas suppliers and electronic distribution platform (EDP) operators don't reach the A$75,000 GST registration turnover threshold
- to goods that are GST-free, such as food items.
If you've been charged GST on an item you believe is GST-free, contact your supplier to request a refund of the GST charged.
Buying through an electronic distribution platform (EDP)
An EDP is a service (such as online marketplace) where you can buy goods from various merchants.
If an EDP operator offers a discount, GST is still calculated on the individual merchant's listed price. The discount the EDP operator offers is viewed as a part payment made by the EDP operator towards the cost of the good to you.
Example: GST and discount offered by an EDP operator
Gavin lives in Australia and buys a lens cover from a merchant in the US through an EDP. The individual merchant lists the lens cover for sale on the EDP at a price of A$66 (including GST and shipping to Gavin's Australian address).
The EDP operator is offering a 5% discount on all purchases made on the EDP in the week Gavin makes his purchase.
Merchant's price (GST exclusive)
GST (10% of merchant's price)
Less EDP discount (part payment made by the EDP operator)
The individual merchant's price of A$60 (GST-exclusive) isn't reduced by the discount offered by the EDP operator. The EDP operator is required to charge GST based on the merchant's price.
The discount offered by the EDP operator is part payment towards the cost of Gavin's purchase and doesn't reduce the GST payable or the A$60 that the merchant receives for the sale.End of example
You are using a redeliverer if you:
- purchase goods and have them sent to a mailbox or address in another country to be re-shipped to you in Australia
- use the services of an overseas business that buys goods on your behalf and then helps you bring those goods to Australia.
A GST registered redeliverer will charge GST on the cost of their services and the value of the goods when delivering goods to you.
The overseas business that makes the original sale shouldn't charge GST as they're not sending the goods to Australia.
When goods with a customs value of more than A$1,000 are imported into Australia GST is payable at the border to Australian Border Force.
If you purchase a number of low value imported goods from a supplier with a total customs value of more than A$1,000 and the goods are sent to you in one parcel, the supplier can choose to either:
- apply GST to each low value good at the point of sale and include sufficient information on the import documents to prevent GST being applied again at the border
- not apply GST at the point of sale and allow GST to be applied to the parcel at the Australian border.
You may also need to pay any customs duty and clearance charges applicable at the border.
The supplier must issue you a notice or receipt that includes:
- their GST registration number, either an Australian business number (ABN) or ATO reference number (ARN)
- if you have paid GST at the point of sale.
This will provide the information required to complete an import declaration.
If the supplier doesn't give this information and the import has a customs value over A$1,000, you'll be notified that you need to pay GST at the border before your goods will be released.
If you're charged GST at the border and at the point of sale, you must seek a refund of the GST paid at the point of sale from the supplier. Australian Border Force can't make refunds of GST paid at the border.
Before they refund the GST paid at the point of sale, the supplier will require proof of payment of the GST paid at the border.
See also Australian Border Force's Importing or buying from overseasExternal Link.
When you make a purchase of imported services, digital products and low value imported goods, the merchant may initially be unsure if GST will apply. In this circumstance, the merchant will advise that additional taxes may apply. As soon as the merchant knows GST applies, they should confirm the GST-inclusive price.
Generally, if GST is likely to apply to an item, the merchant should display a GST-inclusive price. This is a requirement of Australian consumer law, which is administered by the Australian Consumer and Competition CommissionExternal Link.
Example – GST applied to the sale of a digital service
Jo is an Australian resident and has a digital movie subscription from an overseas company, DigiTV. Jo receives a monthly invoice and notices that the invoice includes GST. As DigiTV is an overseas company that is required to register for Australian GST, GST is correctly included on the invoice. DigiTV will pay that GST to us.End of example
Example – Price of digital product
Yarran buys a digital songbook from a merchant in China. The merchant ‘World Music Online’ sells digital sheet music to customers worldwide and is registered for Australian GST.
Yarran selects the sheet music he wants to buy. The listed price is A$20, however a note states that ‘additional taxes may apply’. When Yarran enters his Australian credit card, the price changes to A$22.
The price now includes GST because Yarran’s Australian credit card information has allowed ‘World Online Music’ to confirm that Yarran is an Australian consumer.End of example
Example: GST applied to the sale of a low value good
Lucia lives in Australia and buys a clock from Stylish Times UK Co.
The clock is advertised at A$600 on their website including postage and handling. Stylish Times states that additional taxes may apply.
At the checkout Lucia notices that A$60 has been added, bringing the total price to A$660. Stylish Times added GST to the price as soon as they confirmed the item is being delivered to Australia.End of example
You're entitled to a refund of GST paid when you cancel or return low value imported goods; in the same way as when you return goods in Australia. This refund is paid to you by the supplier, not the ATO or Australian Border Force.
Second-hand goods purchased from overseas may be subject to GST if they are low value imported goods.
When second-hand goods are sold by GST-registered suppliers, GST will generally apply just like when second-hand goods are purchased from GST-registered businesses in Australia. Sales of low value imported goods, either new or second-hand, can be made by:
- a merchant who sells goods
- an EDP (such as an online marketplace)
- a redeliverer.
Sales of low value imported second-hand goods by a non-resident individual through an online marketplace are deemed to have been made by the EDP operator. Therefore, the price of the second-hand good will include GST if the EDP operator is GST-registered.
You may be charged GST when buying gifts from overseas valued at A$1,000 or less and delivered to an address in Australia if the supplier:
- helps to bring the goods to Australia
- is registered for GST.
GST applies to gifts regardless of whether you (the purchaser) are located in Australia or overseas at the time the gift is purchased.
Example: GST and gifts sourced from overseas
Kate lives in England and buys a teddy bear for her grandson who lives in Adelaide, Australia. Kate pays A$70 to Fluffy Bears, an online store in England and Fluffy Bears delivers the teddy bear direct to her grandson in Australia. Fluffy Bears charges A$20 for delivery.
Fluffy Bears is registered for Australian GST. As the teddy bear is delivered by the Fluffy Bears to an address in Australia, Kate will pay GST on the price of the delivered gift she purchased for her grandson.
Kate pays A$99 for the teddy bear for her grandson in Adelaide:
- advertised price of the teddy bear is A$70
- plus delivery of A$20
- plus GST of A$9
Kate's total payable is A$99.
This GST outcome would be the same if Kate lived in Australia. For a good to be taxed as a low value imported good it does not have to be delivered to the purchaser, but it does have to be imported into Australia with the assistance of the supplier.End of example