As of 1 July 2018, Australian goods and services tax (“GST“) will apply to sales of low value goods imported by consumers into Australia. Craig notes that the consequence of this will a significant administrative burden for small operators but this can be managed effectively through a good bookkeeping arrangement.
Businesses that meet the registration threshold of A$75,000 will need to:
- register for GST;
- charge GST on sales of low value imported goods (unless they are GST-free); and
- lodge returns to the ATO.
These businesses may be merchants who sell goods, electronic distribution platform operators or re-deliverers. For goods imported in a consignment over A$1,000, any GST, customs duty and clearance charges will be charged to the importer at the border under existing processes.
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
- an 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; and
- will not need to charge GST on a sale of low value imported goods to Australian GST-registered business if they provide their Australian business number (ABN) and confirmation that they are GST-registered.
Final guidance on currency conversion if sales aren’t in Australian dollars
If your sales of low value imported goods into Australia are not in Australian dollars we have published guidance so you may determine:
- whether goods are low value goods (for example, to work out if the goods have a customs value of A$1,000 or less); and
- the value of taxable supplies – as entities must report the GST payable on taxable supplies in Australian currency when lodging and paying GST.