Edited version of your private ruling

Authorisation Number: 1012503042602

Ruling

Subject: GST and importation of goods in to Australia

Question

Is an importation of goods, purchased whilst you were a passenger on an overseas cruise ship on international waters, subject to GST?

Answer

Yes, your importation of goods, purchased whilst you were a passenger on an overseas cruise ship on international waters, is subject to GST under section 13-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Relevant facts and circumstances

You purchased goods at a cost of $x approximately (including postage fee) whilst a passenger on board a cruise ship whilst in the ocean.

The goods were too bulky for you to store in your room and carry off the cruise ship when you disembarked in Australia. Therefore the cruise ship line undertook to return the goods to the overseas country on the ships return journey.

The cruise ship line arranged a customs broker to transport the goods to Australia for a postage fee. The customs broker prepared the necessary customs information on your behalf and lodged the customs entry form under your name.

You have imported the goods into Australia for your own use. Furthermore, you (through your customs broker/agent) have entered the goods for home consumption when completing the customs formalities.

You have provided us a copy of the:

· Customs entry form; and

· an invoice for purchase of the goods.

Your customs broker did not use any GST exemption code on the entry to identify this as a non-taxable importation.

Customs have treated the importation as a taxable importation and have collected the GST.

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 13-10

A New Tax System (Goods and Services Tax) Act 1999 Section 42-5

Schedule 4 to the Customs Tariff Act 1995

Reasons for decision

Taxable importation

Under section 13-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you make a taxable importation if:

(a) goods are imported, and

(b) you enter the goods for home consumption (within the meaning of the Customs Act 1901).

However, the importation is not a taxable importation to the extent that it is a non-taxable importation.

Goods and Services Tax Ruling GSTR 2003/15 provides guidance on the operation of the provisions in the GST Act which apply to the importation of goods into Australia. (GSTR 2003/15 is available at the Australian Taxation Office website at www.ato.gov.au).

Goods are typically imported into Australia when they are brought to Australia to be unloaded or landed here. 'Imported' in this context has its ordinary meaning.

If you lodge an import entry in your name as the 'owner' of the goods, you enter the goods for home consumption within the meaning of the Customs Act; and you are liable to pay GST on that importation if the importation is a taxable importation.

From the facts provided, you satisfy the requirements of the taxable importation under paragraphs 13-5(a) and 13-5(b) of the GST Act as follows:

(a) you have imported the goods into Australia for your own use, and

(b) you (through your customs broker/agent) entered the goods for home consumption when completing the customs formalities.

As the goods were imported and entered for home consumption, the importation of the goods are a taxable importation unless the circumstances of the importation make it a non-taxable importation.

Non-taxable importation

Under section 13-10 of the GST Act, an importation is a non-taxable importation if:

· it is a non-taxable importation under Part 3-2 of the GST Act, or

· it would have been a supply that was GST-free or input taxed if it had been a supply.

There are three categories of non-taxable importations:

· Goods that are imported and would have been treated as GST-free if they had been supplied within Australia or goods that are imported and would have been treated as input-taxed if they had been supplied within Australia;

· goods that qualify for certain customs duty concessions; and

· goods returned to Australia in an unaltered condition and with unchanged ownership.

Based on the facts, there are no provisions in the GST Act that provide for the importation of the goods to be GST-free or input taxed.

The next step is to consider Part 3-2, Division 42 of the GST Act in order to establish whether the importation will be a non-taxable importation.

Part 3-2 of the GST Act, particularly section 42-5 of the GST Act, deals with importation of goods that are non-taxable importations in accordance with the Customs Tariff Act 1995. The Customs Tariff Act 1995 is administered by Customs and Border Protection Service (Customs); it is a matter for Customs to determine if an importation is covered by items referred to in section 42-5 of the GST Act.

Subsection 42-5(1) states:

(1) An importation of goods is a non-taxable importation if the goods are covered by item 4,8,15,18A,18B,21,21A,23A,23B,24,25A,25B,25C,32A,32B,33A,33B, or 64 in Schedule 4 to the Customs Tariff Act 1995.

Owners and Customs Brokers use "GST exemption codes" on entries for home consumption to identify non-taxable importations.

Of relevance to your situation is Item 15 of Schedule 4 to the Customs Tariff Act 1995 (Item 15).

Item 15 deals with goods imported by overseas travellers under the certain passenger concessions. Imported goods that qualify for certain customs duty concessions are non-taxable importations.

Item 15 states:

Goods, as prescribed by by-law, that are:

(a) goods imported by passengers or members of the crew of ships or aircraft;

(b) goods that:

(i) at the time they are approved for delivery for home consumption, are the property of a person who has arrived in Australia on an international flight within the meaning of section 96B of the Customs Act 1901; and

(ii) were purchased by that person in an inwards duty free shop within the meaning of that section; or

(c) goods brought into, or sent to, Australia by such members of the Defence Force stationed outside Australia as are prescribed by by-law; or

(d) goods imported by members of the forces of Canada, New Zealand or the United Kingdom; or

(e) passengers' personal effects, furniture or household goods

The following goods are covered by this duty concession:

· A$900 worth of goods (A$450 for people under 18) including gifts (given to you or intended for others), souvenirs, cameras, electronic equipment, leather goods, perfume concentrates, jewellery, watches and sporting equipment. Alcohol and tobacco products cannot be included in this concession.

· 2.25 litres of alcoholic beverages for each passenger aged 18 years or over.

· 50 cigarettes or 50 grams of cigars or tobacco products for each passenger aged 18 years or over. One opened packet containing 25 cigarettes or less is also allowed.

· most personal items such as new clothing, footwear, and articles for personal hygiene and grooming (but not fur or perfume concentrates).

· personal goods owned and used by you for at least twelve months.

However, if you exceed any of the concession limits set out above, Customs will charge you duty and tax on the entire importation or purchase within that group of items.

However, it is a matter for Customs to determine if an importation is defined under Schedule 4 of the Customs Tariff Act, as this is legislation administered by Customs and not the Tax Office.

Based on the information provided, Customs did not identify your importation of goods as non-taxable under item 15 or any other items under Schedule 4 of the Customs Tariff Act. Furthermore, your customs broker did not use any GST exemption code on the entry to identify this is as a non-taxable importation. Therefore, the Customs treated the importation of goods as a taxable importation and included GST on the goods.

You may wish to contact Customs, by phone on 1300 363 263, by e-mail at information@customs.gov.au, or on their website at www.customs.gov.au to ascertain if your importation meets the provisions of item 15.