indirect tax - importers
Goods and Services Tax (GST) is payable on taxable supplies and taxable importations.This web page focuses solely on taxable importations because the Australian Customs and Border Protection Service (ACBPS) has no role in the administration of taxable supplies. For information on taxable supplies you should look at the web site of the Australian Taxation Office (ATO): (http://www.ato.gov.au).
Some more specific information for importers is available on other pages of this site.
The ACBPS is responsible for calculating and collecting GST on imported goods and administering all matters concerning taxable importations. This role includes ensuring that:
- GST exemptions claimed by importers are correct;
- The value of the taxable importation is correctly calculated; and
- GST payable on taxable importations is paid to the ACBPS or appropriately deferred for payment on the next Business Activity Statement.
GST is payable on imported goods unless the goods are covered by an exemption. The A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) states that the importer shall pay GST at the same time and in the same manner as customs duty is paid. It also provides that the rate of GST applicable on taxable importations is 10% of the value of the taxable importation. The value of the taxable importation is the sum of:
- the customs value of the imported goods; and
- the amount paid or payable;
- for the international transport of the goods to their place of consignment in Australia and;
- to insure the goods for that transport;
to the extent that the amount is not already included in the customs value; and
- any customs duty payable in respect of the importation of the goods; and
- any wine tax payable in respect of the local entry of the goods.
Goods that are entered for warehousing are not liable for GST until such time as they are cleared from the warehouse for "home consumption" ("home consumption" means that the goods enter into the commerce of Australia).
There is provision for certain importers to defer GST on imports. (more)
The ATO has issued a GST ruling on the importation of goods into Australia. You can access GSTR 2003/15 at http://law.ato.gov.au/atolaw/index.htm
Imported goods cleared by the ACBPS are taxable importations pursuant to GST Act:
- s13-5 - goods entered for home consumption
- s114-5 - goods cleared without a customs entry (eg goods imported by passengers and other goods cleared on informal clearance documents)
Note that entries for warehousing and entries for transhipment are not taxable importations (although warehoused goods would subsequently become taxable importations if they were entered for home consumption ex warehouse). More information about warehousing imported goods is contained in: Customs Warehouses - Deferment of Duty Fact Sheet (27kb)
There are three categories of non-taxable importations:
- importations of goods the supply of which is GST-free (Division 38, GST Act) or input-taxed (Division 40, GST Act) - [s13-10 GST Act];
- goods that qualify for certain customs duty concessions - [s42-5 GST Act]; and
- goods returned to Australia in an unaltered condition and with unchanged ownership - [s42-10 GST Act].
Goods that are imported and would have been treated as GST-free if they had been supplied within Australia are non-taxable importations.
Goods that are imported and would have been treated as input-taxed if they had been supplied within Australia are non-taxable importations.
Imported goods that qualify for certain customs duty concessions are non-taxable importations.
Goods returned to Australia in an unaltered condition and with unchanged ownership are non-taxable importations.
Owners and Customs Brokers use "GST exemption codes" on entries for home consumption to identify non-taxable importations.
Imports of goods that would be GST-free or input taxed if supplied within Australia
Goods that are imported and would have been treated as GST free if they had been a supply, are not subject to GST. Examples include:
- basic food
- certain medical aids and appliances
- cars for use by disabled people
It is important to note that there are numerous definitions and criteria that apply to the treatment of food and medical aids and appliances under GST legislation. Reference to the legislation must be undertaken to determine whether a specific commodity is taxable or exempt. Alternatively you may contact Customs for further clarification.
Goods that are imported and would have been treated as Input Taxed if they had been a supply, are also not subject to GST. Examples include:
- precious metals
The GST legislation provides definitions and criteria that apply to the treatment of precious metals. Precious metal for the purposes of GST is:
- gold (in an investment form) of at least 99.5% fineness; or
- silver (in an investment form) of at least 99.9% fineness; or
- platinum (in an investment form) of at least 99% fineness; or
- any other substance (in an investment form) specified in the regulations of a particular fineness specified in the regulations.
(No regulations have been made to specify any substance other than gold, silver or platinum. To be precious metal for the purposes of GST, the metal must therefore be gold, silver or platinum).
Jewellery does not meet the definition of 'precious metal' because it is not in an investment form.
The ATO has issued a GST ruling that discusses: What is a 'precious metal' for the purposes of GST? You can access GSTR 2003/10 at http://law.ato.gov.au/atolaw/index.htm
Imports that qualify for the following customs duty concessions are not subject to GST
Customs duty concessions that are also non-taxable comprise the following items from Schedule 4 to the Customs Tariff Act 1995:
Item 10* - goods for the official use of a foreign government
Item 11* - goods for a person the subject of a Status of Forces Agreement
Item 15* - goods imported by overseas travellers ('the passenger concession'). The following goods are covered by this duty concession:
- A$900 worth of goods (A$450 for people under 18) including gifts (given to you or intended for others), souvenirs, cameras, electronic equipment, leather goods, perfume concentrates, jewellery, watches and sporting equipment. Alcohol and tobacco products cannot be included in this concession.
- 2.25 litres of alcoholic beverages for each passenger aged 18 years or over.
- 50 cigarettes, or 50 grams of cigars or tobacco products for each passenger aged 18 years or over. One opened packet containing 25 cigarettes or less is also allowed.
- most personal items such as new clothing, footwear, and articles for personal hygiene and grooming (but not fur or perfume concentrates).
- personal goods owned and used by you for at least twelve months.
NOTE: HOWEVER, if you exceed any of the concession limits set out above, the ACBPS will charge you duty and tax on the entire importation or purchase within that group of items.
Items 18* - goods returned after repair or replacement under warranty and global product safety recall goods
Item 21* - goods imported for repair or alteration and to be exported
Item 21A* - TRADEX goods
Item 23* - donated and bequeathed goods
Items 24* - goods imported under a will or intestacy
Item 25* - trophies, medallions or prizes
Item 26* - goods of insubstantial value
Item 4* - calendars, catalogues and certain printed matter
Item 27* - samples of negligible value
Item 22* - certain containers (not shipping containers) that will be exported from Australia without being put to any other use.
* The description of the items listed above is only a summary. Reference to the legislation must be undertaken to determine whether a specific commodity is taxable or exempt. Alternatively you may contact the ACBPS for further clarification.
Note: Regulations have not been made for the purpose of 42-5(1C) of the GST Act. As a result, 4th Schedule Items 1,3,7,12,13 and 29 are taxable importations. Goods imported under these items are free of customs duty but are subject to GST.
Importers must quote an exemption code when entering exempt goods for home consumption.
Goods reimported into Australia in unaltered condition and with unchanged ownership
Goods, originally acquired in Australia, that were exported by their owners and subsequently reimported with unchanged ownership are a non taxable importation. (Section 42-10, GST Act)
The provision only applies applies where:
- the importer is the manufacturer of the goods; or
- the importer has previously acquired the goods and the supply by means of which the importer acquired the goods was a taxable supply; or
- the importer has previously imported the goods and the previous importation was a taxable importation.
The provision also applies to goods acquired prior to 1 July 2000 that would have been subject to the sales tax regime at the time of their acquisition.
Click here to see a full list of GST Exemption Codes.
Goods imported temporarily may be brought into Australia without the payment of customs duty or taxes for a period of up to twelve months. Some general information on temporary importations.
The GST legislation states that GST is not payable on a taxable importation while the temporary importation provisions of the Customs Act 1901 cover the goods in question. It is important to note that this provision is not an exemption, but merely acts as a mechanism to delay payment of GST. In the majority of circumstances, goods covered by temporary importation provisions are re-exported and payment of the customs duty or GST is not required.
If the goods imported temporarily remain in Australia, the duty and GST must be paid.
Payment of GST on taxable importations
You must pay the GST to the ACBPS at the time of clearance unless you are approved for GST deferral (see below). At the end of the month, the ACBPS advises the ATO of the amount of GST paid or deferred by each importer.
How much GST do I have to pay?
You must pay 10 per cent of the value of the taxable importation (VoTI). The VoTI is the sum of:
- the customs value of the imported goods; and
- the amount paid or payable for the international transport of the goods to their place of consignment in Australia and to insure the goods for that transport, to the extent that the amounts are not already included in the customs value; and
- any customs duty payable in respect of the importation of the goods; and
- any wine tax payable in respect of the local entry of the goods.
What does international transport and insurance include?
The VoTI includes the amount paid or payable to transport goods from the place of export to the place of consignment in Australia and to insure the goods for that transport. The place of consignment in Australia is defined as:
- importations by air or sea - the port or airport of final destination as indicated on the transportation documentation (eg bill of lading or air waybill);
- importations by post - the place in Australia to which the goods are addressed.
Note: "Importations by post" is not restricted to goods carried by Australia Post. The ATO has ruled that goods weighing less than 31.5 kgs that are transported to Australia and delivered door-to-door by an international express courier service or similar door-to-door courier are goods posted to Australia.
What costs or charges incurred in the origin country form part of the "international transport of the goods"?
In essence, the international transport and insurance includes all costs to get the goods to Australia that are not already included in the price of the goods.
Australian Customs Notice 2000/35 provides more detailed information about transport and insurance issues.
The GST deferral scheme
The ATO operates a scheme that provides for the deferral of GST on imported goods. Customs duty is still payable before the goods are released from Customs control.
Importers are qualified to apply to the ATO for admission to the scheme if they satisfy certain eligibility criteria including:
- having an Australian Business Number;
- being registered for GST;
- lodging their Business Activity Statement (BAS) monthly, via the internet-based e-commerce system operated by the ATO;
- paying their Business Activity Statement (BAS) liabilities electronically;
- dealing with the ACBPS electronically; and
- not having any debt to or returns outstanding with the ATO, as a general rule.
What is the scope of the Deferred GST Scheme?
Deferral of GST on imported goods extends to all importations that are entered for home consumption (Nature 10 and 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.
How does the deferral scheme operate?
Importers quote their Australian Business Number to the ACBPS when they enter goods for home consumption. If the importer has been approved to defer GST, the ACBPS releases the goods after payment of any customs duty or other charges. The ACBPS records the deferred GST liability of each shipment as it is cleared. At the end of the month, the ACBPS advises the ATO of the total deferred liability of each importer who deferred GST.
The ATO includes the amount of deferred GST on the Business Activity Statement (BAS) before its is issued to each participant. In this way, the amount of deferred GST liability is included in the calculation of net liability in the BAS for the month.
Click here for more detailed information about the GST deferral scheme.
Reporting importations on the Business Activity Statement
All entities registered for GST purposes must lodge a BAS with the ATO within 21 days of the conclusion of their reporting period. Importers registered for GST purposes are required to report all importations, whether taxable or non-taxable, at BAS item numbers G10 and G11.
- For non-taxable importations the amount shown should be the actual amount paid for the goods plus the cost of the international transport and insurance.
- For taxable importations you can record either the value of the taxable importation plus the amount of GST (paid or deferred), or if that information is not available, the GST (paid or deferred) x 11.
These amounts should be included in the totals for capital acquisitions or other acquisitions.
Deferral importations and the BAS
If an importer is approved by the ATO to defer GST at the time of importation, additional BAS procedures apply.
At the end of each month the ACBPS advises the ATO of the aggregate liability (GST deferred) for each importer.
The ATO pre-populates the importers BAS with the amount of GST that was deferred during the month at item 7A on the statement. It then issues the BAS to the registered importer electronically.
Registered importers who participate in the Deferred GST Scheme need to acquit their liability by completing items G10 and G11 on the BAS (see above), with details of all taxable and non-taxable importations made during the reporting period.
Click here for information on how to obtain deferral transaction details to reconcile to the deferred GST liability amount at item 7A on your BAS.
The Australian Business Number (ABN)
The ABN is a single identifier that is used for dealings with the ATO and other government departments and agencies, including the ACBPS. The aim of the ABN system is to simplify the way businesses deal with government by providing a single key to registration services across government, thereby offering a one-stop shop.
An ABN is available to:
- all companies registered under the Corporations Law in Australia;
- government departments and agencies;
- business entities; and
- other entities that are required to be registered for GST purposes (eg charitable and religious institutions).
It is not mandatory for a business entity to have an ABN; however an entity needs an ABN to register for GST purposes. Being registered for GST allows business entities to claim back the GST they have paid on business inputs, through the input tax credit system.
For companies, the ABN is based on the nine-digit Australian Company Number (ACN) with two leading digits added. Entities without an ACN receive an eleven-digit ABN. For GST purposes, the ATO is able to register ABN holders in a number of ways, including groups and branches. For more information on groups and branches, contact the ATO.
Customs use of the ABN
For the purposes of the ACBPS, importers and exporters are required to use their ABN to identify themselves on import entries. Importers who are not entitled to an ABN will continue to be identified by Customs owner codes. Australian Customs Notice 2000/13 provides advice on linking ABNs to owner codes.
The ATO administers the registration of ABNs for business entities. Please contact the ATO if you require application details or further information.
Wine Equalisation Tax
Wine and other similar fermented beverages are subject to a value-based tax called Wine Equalisation Tax (WET). WET applies to grape wine, fruit and vegetable wine, cider, perry, mead, sake, and grape wine products such as marsala, vermouth, wine creams and cocktails.
The WET rate is 29 per cent and is levied at the wholesale level. For the Australian domestic market, the WET liability is remitted to the ATO. For imports, the WET liability is remitted to the ACBPS.
Luxury Car Tax
A luxury car tax (LCT) is payable on imports of luxury cars in addition to any GST payable unless the luxury cars are covered by an exemption.
The LCT threshold is the car depreciation limit for income tax purposes. For the 2013/2014 financial year the LCT threshold is $60,316.
Cars with a GST-inclusive value above the LCT threshold are subject to LCT. In general, the LCT value of a car includes the value of any parts, accessories or attachments supplied or imported at the same time as the car.
LCT does not apply to fuel efficient cars below the fuel efficient luxury car threshold of $75,375 for the 2013/14 financial year. Further information on Fuel Efficient Luxury Cars is available in Australian Customs Notice 2013/35.
Registered entities are generally able to quote their ABN in relation to the supply or importation of a luxury car where they intend holding the car as trading stock (other than for hire or lease), carrying out research and development for the car manufacturer, or exporting the car where the export is GST-free. The quotation system is designed to prevent LCT becoming payable before the car is sold or imported at the retail level.