GST

IMPORTS TO AUSTRALIA FROM CHINA - GOODS & SERVICE TAX

GST for Imports to Australia from China, India, South East Asia, Europe, USA, Canada or Russia

Please note some of the terms used in this article:

When we say you, we are referring to you as a GST-registered business or organisation. GST credit pertains to the GST term input tax credit. If you would like further information regarding GST, please feel free to call 1300 130 915, or visit www.ato.gov.au.

How do you pay GST on imports?

The Australian Customs Service (Customs) collects GST on taxable goods imported into Australia. This GST is 10% of the total value of the imported goods. The complete value of the product is the sum of:

  • Customs value of the goods

  • Customs Duty amounts

  • Transport amount (paid or payable) to the port, airport or final destination of the goods within Australia

  • Insurance costs of transport

  • Wine equalisation tax payable

When do you pay GST on imports?

In most cases, GST is payable before the goods are released by Customs. As an importer, you are still able to pay in the exact same manner as you would pay customs duty (in the case your products are subjected to customs duty).

Can you defer the payment of GST on imported goods?

Yes, it is possible to defer GST. If you are an importer and are registered for GST, you may be eligible to defer the payment by taking part in the deferred GST scheme. The scheme gives you the ability to defer the payment of GST on taxable importations up until the first activity statement you lodge after the goods are imported. This scheme requires that you meet certain eligibility criteria before you are able to participate and defer GST on taxable imports.

If you would like to find out more regarding GST on imports and the deferring scheme, phone 1300 130 915 or visit Easy steps to the Deferred GST scheme. Please read (NAT 9558) and read all steps prior to submitting your application.

Are all importations taxable? There some foreign goods which may not be subject to GST when imported. These are:

  • Any goods that would have been GST-free or input taxed if supplied within Australia. This might include some basic foods, certain medical aids and appliances, cars for use by certain people with disabilities, and precious metals.

  • Any 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?

If you have not applied to defer, you are required by law to pay GST when importing foreign goods. If you are registered for GST, you will be able to claim GST credits on any imported goods in the activity statement you lodge for the tax period in which you pay the GST on the particular item(s).

Example

Joe's Fishing Supplies (JFS) is a fishing supply wholesaler. The business is regesitered for GST in imported goods. JFS imported new fishing rods on 8th March.

  • The customs values of the imported fishing rods is $17,000. The customs duty that is applied to the goods is $1,200. The transport and subsequent insurance costs are $3,500.

  • The total  value of the importation of the fishing rods is $21,700.

10% GST is added onto the total value. This amount is $2,170 (10% x $21,700).

On 19th March, JFS sells the imported fishing rods to a local retailer for $29,000. A 10% GST charge of $2,900 is added to this amount. Therefore, the resulting GST-inclusive value ofthe imported fishing rods is now a total of $31,900.

JFS offsets the $2,170 GST that was paid when the fishing rods were initally imported into Australia against the $2,900 GST payable to the retailer. As a result, JFS pays a total $730 to the Australian Tax Office ($2,900 - $2,170).

The retailer that purchased the imported fishing rods from JFS sells them to the general public on 24th March. This retailer offsets the $2,900 that was included in the price paid for the goods against the GST that will be paid to the ATO when the goods are sold.

Do you need evidence of importation?

Before you are eligible to claim GST credit, you are required to present legal documentation outlining that the foreign goods have been imported 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.

If you have been the cause of the goods entering Australia for your own purposes, and you have completed the necessary customs formalities, then you are legally considered the importer of the foreign goods.

If you employ the use of an intermediary (for example, a licensed Brisbane customs broker), they will be able to provide you with the documents from Customs. They may also arrange 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.

Below are some examples of the acceptable documentation that is required to show that the goods have been imported and entered Australia for home consumption.

Participating in the deferred GST scheme

It is required by customs to present an import declaration for any goods intended to enter into Australia for home consumption. The two specific declarations that may be used for this purpose and 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.

If you are an importer, you are required to keep the relevant import declaration. The status of the declaration must be ‘Finalised’. You must also keep the related matching official receipt from Customs, as this document will provide details concerning the total amount paid for the imported goods.

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.

More information

For further information on GST payments on imported goods refer to:

If you need more information about deferring GST payments on imported goods, you can:

  • GSTR 2003/15 Goods and services tax: importation of goods into Australia.

  • visit the ATO website at www.ato.gov.au

  • phone 13 28 66

  • phone Customs on 1300 363 263

  • phone the dedicated tax practitioner line on 13 72 86, or

  • If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call. If you are calling from overseas, phone +61 3 9203 4027.

  • If you have a hearing or speech impairment and use a TTY or modem, phone the National Relay Service on 13 36 77. For 1800 toll-free numbers, phone 1800 555 677 and quote the number you need. If you are calling from overseas, phone +61 7 3815 7799.

  • If you have a speech impairment and do not use a TTY or modem, phone the Speech to Speech Relay Service on 1300 555 727. For 1800 toll-free numbers, phone 1800 555 677 and quote the number you need. If you are calling from overseas, phone +61 7 3815 8000.

  • Write to ATO at PO Box 9935 in your capital city. (NAT 3014)

 

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