News in: Changes to GST on low value imports to Australia

By Margaret Bux
clock 3 min

The Australian Tax Office (ATO) is removing the current exemption of GST on imported goods that are under $1,000 and from 1st July 2018, will charge GST to retail sales of low value goods (under $1,000) imported to Australia, when purchased by consumers.

For these low value goods, GST will be collected through the sale, instead of at the border.

For goods imported in a consignment over $1,000, any GST, customs duty and clearance charges will be charged to the importer at the border under existing processes.

Vendors, including merchants, electronic distribution platform operators and re-deliverers with sales subject to GST of $75,000 or more each year, (including on-line marketplaces like eBay, Asos and Amazon) will need to register with the ATO, collect GST at the point of sale and remit that GST to the ATO.

Businesses with an ABN will be able to quote an exemption code at the time of purchase and GST will either become payable at the time of delivery or simply transferred to a GST Deferred Account. This prevents the GST from being charged a second time at the border and if that happens, this charge is not refundable via the Department of Home Affairs and must be sought from the supplier.

Considerations for importers
While border processes will not change, you should consider whether changes to your business processes are necessary.

Considerations for Vendors
Vendors registered for GST need to ensure that relevant tax information is included on import documents for low value goods, otherwise penalties can apply.

What is not changing?
The $1,000 threshold for GST, duty and reporting at the border will remain.  The changes also do not apply to tobacco and tobacco related products or alcohol.  These will continue to be taxable at the border with customs duty and GST regardless of value.  There will be no changes to current border clearance processes or any impact to the flow of goods across the border.

This new law is designed so that businesses:

  • will not charge GST on a sale when GST will be charged at the border, because an item is either worth over A$1,000, a tobacco product, or alcoholic beverage;
  • will not need to charge GST on a sale if it is clear that multiple goods will be shipped to Australia in one consignment worth over A$1,000, GST will be charged at the border instead.

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