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GST on Low-Value Imported Goods

Written by: Institute Certified Bookkeepers

Category: GST Issues

GST on low value imported goods will apply to sales from the 1st July 2018.

This will only be relevant to those businesses that provide goods valued at $1,000AUD or lower.

The items that are relevant include:

  • Clothing
  • Cosmetics
  • Books
  • Electronics
  • Appliances

This GST will apply to those that are selling directly to the marketplace and those that are considered re-deliverers.

Transporters and Custom Brokers

Transporters and Customs Brokers commonly are not re-deliverers given that they are engaged by the merchant (or Electronic Distribution Platform – EDP Operator), or do not provide the offshore service as such.

When the new law comes into effect, the GST will be collected by the merchant (or EDP operator) via the vendor collection model. The low value imported goods threshold of $1,000AUD will remain relevant.

This means that these low-value goods will be treated as non-taxable importations and as they cross borders, will have no GST impact.

This requirement will apply to either:

  • the operator of an EDP through which the goods are sold
  • the merchant who sells the goods
  • a re-deliverer.

Goods on Consignment

When goods are imported on consignment and have a customs value of $1,000AUD or lower, there will not be any duty or GST applicable to the importation. The exception to this is on alcoholic and tobacco products.

When the goods exceed the low-value threshold, then any GST, customs duty and others taxes will be paid by the importer at the border. However, there is a way to prevent from being applied again when the goods reach the border. This will only be possible when the GST has been charged on the sale.

The new GST low-value implementation has been designed so that GST will only be charged on a sale and GST has not been charged at the border.

The Impacts and Implications

The businesses that are considered as the supplier of low-value goods for GST purposes, and are registered for GST, are required to ensure that their tax information is included on the customs documents specific to low value imported goods.

It is imperative that the businesses include details about the receipts that have been issued to their customers where GST has been applied to a sale. This will not apply to those goods that are not considered low-value goods.

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