International
GST on imported goods
GST on imported goods is 10% of the value of the taxable importation, collected at the border or reported on the BAS, and registered businesses can generally claim it back as a credit.
When goods are brought into Australia, GST is generally payable on the importation, in addition to any customs duty. The rate is 10%, charged on the value of the taxable importation. This puts imported goods on the same footing as goods supplied locally, which carry GST at the point of sale. The charge is imposed on the importer, not the overseas seller, unless a special arrangement for low value goods applies.
The value of the taxable importation is made up of several parts. It generally includes the customs value of the goods, the cost of international transport and insurance to Australia, and any customs duty payable. Some other taxes, such as wine equalisation tax or luxury car tax where relevant, can also be included. GST of 10% is then calculated on the total.
For most imports, the GST is paid to the Australian Border Force when the goods are cleared, before they are released. A registered business that imports regularly can apply to use the deferred GST scheme. Under this scheme the GST is not paid at the border, and instead is reported on the BAS and offset by the credit claimed for the same amount, so there is generally no cash cost in the period.
A business registered for GST can usually claim an input tax credit for the GST on imported goods used for a creditable purpose, using the import declaration as evidence rather than a tax invoice. The credit is claimed in the BAS for the period when GST was paid or reported. A person who is not registered, such as a private individual, cannot claim the GST back, and the GST becomes part of their cost.
Special rules apply for low value goods bought online by consumers, where the overseas seller or platform may charge the GST at the point of sale, instead of GST being collected at the border. Some imports are not taxable, including certain goods that would be GST-free if supplied in Australia. Whether GST applies to your goods depends on their nature and value.
Common mistakes include forgetting that GST is charged on the freight and duty as well as the goods, failing to claim the credit, and keeping poor import records. This is general information only, so confirm your situation with the Australian Border Force, the ATO or a registered tax professional.
Worked example
A registered business imports machinery with a customs value of $30,000, freight and insurance of $2,000 and customs duty of $1,500. Value of the taxable importation is $30,000 + $2,000 + $1,500 = $33,500. GST is 10% x $33,500 = $3,350. Under the deferred GST scheme the business reports $3,350 GST payable and claims a $3,350 credit in the same BAS, so net cash effect is nil.
Practical tips
- Remember GST is calculated on the customs value plus freight, insurance and duty, not just the invoice price.
- Registered businesses should consider the deferred GST scheme to avoid paying GST at the border.
- Keep the import declaration, because it is the evidence you need for the GST credit.