Small Business

Importing

Customs Procedures for Importing and Exporting

Prohibited and restricted imports

Prohibited and restricted exports

Exchange rates

Guidelines for completing Tariff Advice applications (B102)

http://www.customs.gov.au/site/page4369.asp

http://www.customs.gov.au/site/page4381.asp

http://www.customs.gov.au/site/page4277.asp

http://www.customs.gov.au/webdata/resources/files/ta-guideline.pdf

GST on Impprted Goods

Terms we use

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.

Goods and services tax (GST) is payable on most goods imported into Australia.

GST is payable by businesses, organisations and private individuals, whether they are registered for GST or not. However, if you are a GST-registered business or organisation and you import goods as part of your activities, you may be able to claim a GST credit for any GST you pay on those goods.

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 scheme.

For more information about deferring GST on imports, phone 1300 130 915 or visit www.ato.gov.au

Are all importations taxable?

Some goods imported into Australia are not subject to GST.

These are:

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.

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:

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.

Example

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 us.

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 us 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

initially entered for warehousing and entered for home consumption when they are cleared out of the Customs licensed warehouse.

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:

1. 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.

2. 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.

Easy steps to the deferred GST scheme

What is the deferred GST scheme?

The deferred GST (DGST) scheme allows importers to defer payment of GST on all taxable importations into Australia. Importers need to apply to the tax office for approval to defer GST payments on the imported goods.

The following steps will help you work out if you are eligible to participate in the scheme.

Step 1

Do you have an Australian business number (ABN)?

You must have an ABN to participate in the DGST scheme.

Step 2

Are you registered for GST?

Only importers who have registered for GST are eligible to defer GST on imported goods.

Step 3

Do you lodge your activity statements online?

To participate in the DGST scheme, you must lodge your activity statement online.

GST group members and representatives

If you are a non-representative member of a GST group, you are not required to lodge an activity statement; however, you will still be eligible to apply for the DGST scheme.

Your nominated GST group representative will also need to apply for the DGST scheme and lodge their activity statement online.

Step 4

Do you lodge or intend to lodge your activity statement monthly?

To participate in the DGST scheme, you must lodge your activity statement monthly. If you currently lodge quarterly, you can elect to lodge monthly; however, this election will not take effect until the start of the next quarter. This means you will not be eligible to defer GST on your imports until the start of the next quarter.

Step 5

Do you have any outstanding tax-related returns or payments?

You may not be eligible to participate in the scheme if you are not up to date with your tax returns or payments. this includes all members of GST groups, GST branches and GST joint ventures.

Step 6

Do you make your activity statement payments electronically?

To participate in the DGST scheme, you must make payments to us electronically.

Step 7

Have you or any relevant persons been convicted or penalised by a court?

You may not be eligible to participate in the DGST scheme if, in the last three years, you or any persons relevant to the application have been convicted or penalised by a court for offences in relation to:

taxation requirements

customs requirements

the misdescription of goods

trade practices

fair trading, or

defrauding the Australian Government.

Persons relevant to the application include: public officers, directors, office bearers, partners and trustees of the applicant.

In the application you must state if you or any persons relevant to the application have been convicted or penalised by a court for any relevant offences. We may ask you to provide additional information about the nature of the offence or penalty before making a decision about your application.

If you satisfy the eligibility in steps 1–7 and you want to apply for DGST status, use the Application for approval to defer GST on imported goods on our website.

Lodge your activity statements online

Lodging your activity statement has never been so easy.

You can lodge and revise most types of activity statements through the Business Portal and you’ll receive instant confirmation by receipt that your activity statement has been lodged. You can also view, print and list previously lodged statements.

You can also use the Business Portal to view account details, request transfers and refunds of credit balances, view and update registration details and send and receive secure messages.

Requirements

You will need:

an Australian business number (ABN)

a free ATO digital certificate (register now), and

Internet access (see minimum computer requirements)

Accessing this online service

The Business Portal is a secure website and to access it you will need to register for a free ATO digital certificate. Once you have installed your certificate, you are ready to access the Business Portal and lodge your activity statement.

Lodging your activity statement

Once you lodge your activity statement online, we will no longer post activity statements to you. All future activity statements can be accessed via the Business Portal. You’ll receive notification by email that your activity statement is available to access and complete online.

BPAY online

You can pay your tax obligations online using BPAY.

BPAY allows you to transfer funds from your cheque or savings account using your financial institution’s phone or internet banking service.

You can pay at any time and set up your payments in advance to meet the due date. It’s fast and convenient.