IMPORT GOODS & SERVICE TAX
Terms used When we say: you, we mean you as a GST-registered business or organisation, and GST credit, we are referring to the GST term input tax credit. For more information about deferring GST on imports, phone 1300 130 915 or visit www.ato.gov.au Read "GST credit", we are referring to the GST term input tax credit.Generally, GST is payable before the goods are released by Customs. You as the importer pay at the same time, at the same place, and in the same manner as you would customs duty (if your goods are subject to customs duty).
How do you pay GST on imports?The Australian Customs Service (Customs) collects GST on taxable goods imported into Australia. The GST payable is 10% of the value of the imported product. The value of the product is the sum of: the customs value of the goods any customs duty payable the amount paid or payable to transport the goods to the port or airport of final destination in Australia (or the place in Australia to which goods are posted) the insurance cost for that transport, and any wine equalisation tax payable.
When do you pay GST on imports?
Generally, GST is payable before the goods are released by Customs. You as the importer pay at the same time, at the same place, and in the same manner as you would customs duty (if your goods are subject to customs duty).
Can you defer 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 eligibility criteria to participate in the schemeFor more information about deferring GST on imports, phone 1300 130 915 or visit Easy steps to the Deferred GST scheme Read (NAT 9558) and read all steps prior to submitting your application.
Are all importations taxable? Some goods imported into Australia are not subject to GST
- 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, and
- 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:
- Goods that qualify for certain customs duty concessions.
- Item 15 – goods imported by overseas travellers (provided the goods imported by travellers are not in excess of the duty free allowance)
- Items 17 and 17A – goods returned to Australia in an unaltered condition (conditions apply)
- Items 18A and 18B – goods returned after repair or replacement under warranty
- Item 18C – global product safety recall goods
- Item 21 – goods imported for repair, alteration or industrial processing, then exported
- Items 23A and 23B – certain bequeathed goods
- Items 25A, 25B, 25c – trophies, medals, etc (won or awarded), and
- Items 32A and 32B – 'low-value goods' or goods on which customs duty and taxes is $50 or less and which have a customs value of less than $1,000.
How do you claim GST credits?
Unless you have deferred, you pay GST when you import goods. If you are registered for GST, you claim GST credits on imported products in the activity statement you lodge for the tax period in which you pay the GST on that product.
Sam’s Sporting Goods (SSG) is a sporting goods wholesaler and is registered for GST. SSG imports golf clubs on 6 January.
- The customs value of the golf clubs is $20,000, the customs duty payable for the goods is $1,000 and the transport and insurance costs are $2,000.
- Therefore, the value of the importation is $23,000.
When SSG imports the golf clubs, it pays Customs GST of 10% of the value of the importation or $2,300 (10% x 23,000).
On 27 January, SSG sells the golf clubs to a retailer for $35,000 plus $3,500 GST. The GST-inclusive price of the golf clubs is now $38,500.
SSG offsets the $2,300 GST it paid when the golf clubs were imported against the $3,500 GST payable on the sale to the retailer. SSG pays $1,200 (that is, $3,500 - $2,300) to Australian Tax office.The retailer sells the goods to the public on 30 January. The retailer offsets the $3,500 included in the price he paid for the goods against the GST he has to pay to Australian Tax office when he sells the goods.
Do you need evidence of importation?
Before you can claim a GST credit, you must have documentation showing the goods have been imported and have entered Australia for home consumption (that is, GST has either been paid or deferred). Goods are entered for home consumption when Customs releases them for use in Australia.You are considered the importer of the goods if you have caused the goods to be brought to Australia for your own purposes and you have completed the customs formalities.If you use an intermediary (for example, a licensed customs broker), they can provide you with the documents from Customs, or they may 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.
What evidence is acceptable?
Apart from goods being transferred from one ship or aircraft to another that is engaged in international travel (transhipped), goods are either:
- initially entered for home consumption, or
- GST is payable when the goods are entered for home consumption.
The following are examples of acceptable documentation to show that the goods have been imported and entered for home consumption.
Participating in the deferred GST scheme
Customs requires an import declaration for goods intended to be entered for home consumption. There are two 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.
As an importer you 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 Customs (this document contains details of total amount paid).
For non-deferred imports
Customs provides an official receipt for payments received, including details of total payable GST.
- initially entered for warehousing and entered for home consumption when they are cleared out of the Customs licensed warehouse.
For further information on GST payments on imported goods refer to:
- GST for small business
- Easy steps to the deferred GST scheme (NAT 9558)
- GST credits for business (NAT 3019)