GST is payable on most goods imported into Australia. However, if you are a GST-registered business or organization and import goods in the course of your business, you may be able to claim a GST credit for the GST you pay on the import. The Australia Customs Service (customer) collects GST on taxable imports. The GST is 10% of the value of a taxable import. The value of a taxable import is the sum of:
- the customs value of the goods
- the customs duties payable
- the amount paid or payable for transporting the goods to Australia
- the insurance costs for that transport; and
- the wine equalization tax, if any, payable.
Example: Jane Doe imported $100,000 worth of iPhone accessories from America and was charged as follows:
- Customs duty $20,000
- Freight charges $1,000
- Insurance $800
So the total cost of importing the goods for Jane Doe would be:
- Customs duties: $20,000
- Freight charges: $1,000
- Insurance: $800
- iPhone accessories: $100,000
- Subtotal: $121.80
- GST on purchases: $12,180
- Total purchases: $133,980
If I have to pay GST on my imported goods, how and where do I pay it? Generally, GST on goods is paid to Customs before the goods are released from Customs. The good news is that some imported goods are GST-free, namely:
- Goods that are GST-free or input tax-free within Australia.
- Goods that qualify for certain duty reliefs; these include but are not limited to the following.
- Goods imported by overseas travelers that do not exceed the allowance, which is the amount of goods that may be carried in carry-on baggage on board an aircraft or ship, including tobacco and alcohol
- Goods that are being returned to Australia in an unaltered condition
- Goods returned after repair or replacement under warranty
- Goods returned as part of a global product safety recall
- Goods imported for repair or industrial processing and subsequently exported
- Certain goods bequeathed (goods left in a will), including goods donated by a person, company or organization based outside Australia to a company based in Australia for the purpose of carrying out humanitarian work
- Trophies, medals, etc.
- Goods of low value subject to duties and taxes of $50 or less and a customs value of less than $1,000
Some examples of the above GST-exempt goods are:
- 275 liters of alcohol carried on board an aircraft
- Frozen vegetables
- Returned plasma television purchased on eBay Australia
When can I claim back the GST? You can claim GST credits if the following three rules apply:
- You imported the goods solely for the purpose of carrying on your business
- The importation is a taxable import, meaning it is not an exempt import as described above, and
- You are registered for the GST.
You can apply for GST credits only after you have paid GST on the goods to Customs as described above, and then apply for GST credits in your BAS. You apply for GST in the quarter or period in which you paid GST on the import. You must have proof of importation before you can claim GST credit, otherwise you cannot claim GST credit for importation of the goods. Accounting Consulting Firms in Australia