Deferral of GST
The Australian Taxation Office (ATO) operates a scheme that provides for the deferral of GST on imported goods. The Deferred GST Scheme covers GST only; it does not impact upon Customs duty, which must still be paid at the time of importation.
Scope of the scheme
Deferral of GST on imported goods extends to all importations that are entered for home consumption, either at the time of importation (Customs Nature 10 entries) or from a Licensed Customs Warehouse (Customs Nature 30 entries). The scheme also covers Post Warrant Amendment entries where additional GST is payable (eg Nature 11 and 31 entries). Goods in the following categories are excluded from the scheme:
Goods imported under the TRADEX scheme that are diverted into home consumption;
Low value imports cleared on informal clearance documents
Goods imported temporarily under Customs Act s162 or s162A.
Admission to the scheme
Owners must be registered for GST and must apply to the ATO for approval to participate in the Deferred GST Scheme. Owners not admitted to the scheme will be required to pay GST and duty at the time the goods are entered for home consumption or otherwise dealt with under the Customs Act 1901.
Owners must lodge Business Activity Statements monthly
Owners may apply to participate in the Deferred GST Scheme if they elect to or are required to lodge their Business Activity Statements (BAS) monthly.
Owners must deal with the ATO and Customs electronically
Owners may apply to participate in the Deferred GST Scheme if they lodge their BAS via the Internet-based, e-commerce system operated by the ATO. Owners can deal electronically with Customs either directly, or through a licensed Customs Broker.
The Customs computer system does not permit deferral on entries that are lodged manually. Payments of GST on Informal Clearance Documents and debit notes cannot be deferred. It is a condition of the GST deferral scheme that owners must deal with Customs electronically. This condition is contained in regulation 33-15.06 of A New Tax System (Goods and Services Tax) Regulations 1999 and it is also stated in Australian Customs Notice 2000/14. Owners must either use the services of a licensed Customs brokers or arrange to connect to Customs computer system. To make arrangements for the connection you are advised to contact the Customs Systems Support Centre on 1300 558 099.
Owners must have a good compliance record
As a general principle, owners wishing to participate in the Deferred GST Scheme must not have any debt or returns outstanding with the ATO.
Disqualification from the scheme
Owners may be removed from the Deferred GST Scheme if they:
fail to lodge their Business Activity Statements by the due date;
fail to pay their ATO obligations by the due date; or
are subject to administrative penalties under any Act administered by the Commissioner; or
no longer meet the eligibility criteria on an ongoing basis.
Readmission to the scheme
Owners who have been removed from the deferral system may be readmitted if:
they satisfy the rules for admission to the deferral system; and
they obtain a bank guarantee in respect of any future liability for GST on imported goods.
How does the scheme operate?
When goods are entered for home consumption, ("home consumption" means that the goods enter into the commerce of Australia) the owner is required to quote their Australian Business Number (ABN) to Customs. If the owner has been approved to defer payment of GST, the imported goods can be released after payment of any customs duty or other charges. Customs records the GST liability of each shipment as it is finalised.
At the end of the month Customs advises the ATO of the aggregated liability for each owner.
The ATO includes on the next BAS the total amount of GST that was deferred during the previous month. The ATO then issues the BAS to the owner via the Internet.
The BAS is due to be lodged and paid by the 21st day following the month in which the GST was deferred. [If all the importations for the period are creditable importations, an input tax credit can be claimed in the BAS, which will effectively offset the deferred GST liability.]
How can I apply?
An application form for approval to defer GST on imported goods is available on the Australian Taxation Office website. Owners can apply to participate on-line at www.ato.gov.au.
How does Customs' computer system handle the deferral of GST?
If an entity has an ABN approved for deferral, the COMPILE system defers ALL GST payable on an entry automatically. The Customs computer system calculates the amount of GST to be deferred and this appears on the marks screen of the entry and the entry print.
You are not able to elect to defer GST on specific entries. If you are approved to defer, then GST is deferred on all lines for every entry. Customs Duty is not deferred; it is payable prior to the goods being delivered into home consumption.
The total amount of GST that has been deferred for an ABN is aggregated by Customs and passed to the ATO at the end of each month.
Which entries are captured in the deferred GST amount passed to the ATO at the end of each month?
Customs informs the ATO about all amounts of GST deferred on:
Entries for home consumption (ie. Natures 10 and 30) that were finalised* during the month.
Post warrant amendment entries (these correct errors on earlier entries for home consumption) that were finalised* during the month (provided that GST was deferred on the original entry).
Please note that, where a post warrant amendment entry reduces the amount of GST deferred, this deferral reduction will be reflected in your Business Activity Statement only if the PWA amends an entry that was finalised* in that same month.
* Entries are finalised when customs releases the goods. Note that this may be different from the date that funds were debited against the owner’s bank account for duty and/or other charges.
Do I have to be connected to Customs Electronic Funds Transfer system to participate in the Deferred GST Scheme?
No. As long as goods are entered for home consumption using Customs Computer system you can participate in the Deferred GST Scheme. Many owners are connected to the Customs EFT system to make importing a more seamless process. (In fact, 97% of electronic entries are paid using the Customs EFT facility). However, if goods are entered electronically and paid for using cash or cheque, then deferral is allowed.
Are Wine Equalisation Tax (WET) and Luxury Car Tax (LCT) included in the Deferred GST Scheme?
No, WET and LCT are not included in the Deferred GST Scheme; it only applies to GST.
Owners can quote for WET or LCT at the time of importation if they are registered for GST and meet the grounds for quoting.
How does GST deferral work for companies that have a branch/division structure with the branches electing to complete individual BAS's?
Each branch has an ABN and GST branch number. Each importing branch that wants to be on the Deferred GST Scheme must apply for GST deferral and be approved for GST deferral individually. The importing branch then uses its ABN plus GST branch number on the Customs entry.
How does GST deferral work for GST Groups?
It is not necessary for all members of a Group to apply for admission to the deferral scheme. If a Group member wishes to defer they must apply to defer and the Group representative must also apply. In others words, if a member is in the Deferred GST Scheme then the Group representative must also be in.
If another Group member does not want to defer, they pay GST at point of entry. The Group representative can claim an input tax credit for the GST paid at importation.
Once admitted to the Deferred GST Scheme, each Group member should use its own ABN on each customs entry. At the end of the month, Customs advises the ATO of the amount of GST deferred by each member of the Group. The ATO consolidates all of these amounts into one amount and inserts it as a liability on the Business Activity Statement for the representative member. This liability may be offset against the input tax credits available to the Group members for any creditable importations (or creditable acquisitions) they have made.
How can an importer obtain transaction details to reconcile with the aggregate figure included on their BAS by the ATO?
Owners requiring this information may apply by phone, letter, fax or e-mail to Mac Customs if we have cleared your cargo through Australian Customs, we don't charge a fee for this service if you are a regular Customer & we can email or fax you the required report.
Or you Can apply to Australian Customs as per below:
Commercial Support Applications
Australian Customs Service
5 Constitution Avenue
CANBERRA CITY ACT 2601
Phone: 02 6275 6640
FAX: 02 6275 5893
Requests should contain owner's ABN and the period the data is requested for. A billing address and contact details should also be provided. For data extractions by parties other than the owner, the request should include a letter of authority from the owner on whose behalf the request has been made.
What information is available?
Entry No., Owner Name, Owner Code, Date Entry Created, Date Entry Finalised, Supplier Name, Supplier Code, Agent Ref, Owners Ref, Customs Total Value Amt, Total Duty Amt, Total Deferred GST Amt and Total Amount Paid.
Is there a fee?
$66.00 (includes GST) for those requests with output fields as listed in the previous question and forwarded on by disk or e-mail. Requests with variations will be processed as per ACN 94/03.
Cheque payments (made out to the Australian Customs Service) may be taken to the Collector of Public Monies, at a Customs House in your state (if payment is made by this method, a copy of the receipt may be forwarded to this office with the data extraction request). Alternatively a cheque can be forwarded direct to this office with the data extraction request or an account will be forwarded to the billing address provided.
How long does it take?
The majority of data requests are currently being processed within 14 days. This turnaround time will be maintained.