Common GST categories
Exports of goods
Exports of goods are goods sent out of Australia to overseas customers, and they are generally GST-free when the export conditions are met, which lets the seller claim credits on related costs.
Exports of goods are a key GST-free category. When an Australian business sells goods and sends them overseas, the sale is generally GST-free, which means no GST is charged to the overseas customer. The business can still claim GST credits on its related costs, such as raw materials, rent and equipment, so exporting is often a refund-generating activity.
The usual requirement is that the goods are exported within 60 days of the earlier of the day the supplier receives payment or the day the supplier issues an invoice. In some cases the ATO can approve a longer period. If the goods are not exported in time, or the export conditions are not met, the sale may be taxable and GST would need to be accounted for. There are also rules about the goods being exported from Australia to a place outside Australia.
Evidence of export is important. Typical records include export declarations, customs documents, airway bills or bills of lading, freight invoices, and records of payment. If the ATO reviews your claim, these documents help show that the goods left Australia in the right time frame and were delivered to the overseas buyer or their agent. Good export records also support your GST-free reporting on the BAS.
An export sale is included in your total sales at label G1 of the BAS but no GST is shown on it. In addition, businesses that export a large share of their production might find that their credits regularly exceed the GST they collect, so they may regularly receive a refund. This can bring attention from the ATO, so accurate records and correct coding are essential.
Common mistakes include treating a sale as GST-free simply because the buyer lives overseas when the goods are actually delivered in Australia, or because the buyer collects them personally and takes them abroad without documentation. Another error is forgetting that goods sold to a tourist who takes them home may need to go through the tourist refund scheme rather than being GST-free at the shop counter.
Exporters should also consider other regimes, such as customs requirements, export controls and the income tax treatment of foreign income. If you are new to exporting, ask your freight forwarder for the full set of export documents and keep them for at least five years. This content is general information only, so confirm your treatment with the ATO or a registered tax professional.
Worked example
A Brisbane manufacturer sells $22,000 of products to a customer in New Zealand and ships them within 20 days of invoicing. The sale is GST-free, so no GST is charged. In the same quarter it pays $3,300 including GST for materials ($300 GST) and claims the $300 credit, so it can have a net refund of $300 if no other sales are made.
Practical tips
- Keep export declarations, shipping documents and proof of payment for at least five years so you can show the goods left within the required time.
- If goods may not leave within 60 days, check with the ATO about an extension before treating the sale as GST-free.
- Agree early with your freight forwarder who will hold export documents, so you can produce them quickly if requested.