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Edited version of your private ruling
Authorisation Number: 1012455306502
Ruling
Subject: GST and importation
Question
Is the cost of development work included in working out the GST payable on the importation?
Answer
Australian Customs and Border Protection Service (Customs and Border Protection) determines the value of the imported goods. The ATO is not able to advise on customs matters.
Relevant facts and circumstances
You are registered for GST.
You contracted the development of software and hardware with a company overseas. The software is incorporated into an electronic product for industrial use and the product is manufactured overseas and you import it to Australia.
You are aware that GST is applied on the imported goods.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 13-5.
A New Tax System (Goods and Services Tax) Act 1999 Section 13-20.
A New Tax System (Goods and Services Tax) Act 1999 Section 195-1.
Reasons for decision
Customs and Border Protection collects GST on taxable importations.
Subsection 13-20(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that the amount of GST payable on the taxable importation is 10% of its value.
Subsection 13-20(2) of the GST Act provides that the value of the taxable importation is the sum of:
· the customs value of the goods
· the amount paid or payable for the international transport
· the insurance for the transport, and
· any customs duty or wine tax payable on the importation.
The customs value of imported goods is defined in section 195-1 of the GST Act by reference to Division 2 of Part VIII of the Customs Act 1901.
You may wish to contact Customs and Border Protection, by phone on 1300 363 263, by email at information@customs.gov.au, or on their website at www.customs.gov.au to ascertain the processes they use in determining value.
The ATO is not able to advise on matters administered by Customs and Border Protection.