Do you import goods and services?
GST applies to most imports over $1,000. GST is 10% of the value of the goods you have imported. You generally need to pay this to the Department of Home Affairs before you can receive the goods.
There is a scheme where you can pay your GST later. This is called the deferred GST scheme (DGST), and there are eligibility requirements.
If you are registered for the deferred GST scheme, you don’t need to pay GST until after the goods are imported and you lodge your next activity statement.
If you’re registered for GST, you may be able to claim a credit for any GST paid on goods you import for your business.
What is the deferred GST scheme?
If you import goods and services, the deferred GST (DGST) scheme allows you to defer payment of GST on all taxable importations into Australia. This is subject to eligibility requirements.
- You need approval to participate in the DGST scheme, which you can get by applying to the ATO.
Am I eligible to participate in the deferred GST scheme?
To be eligible to participate in the deferred GST scheme, you must:
- have an ABN
- be registered for GST (you can register for GST and apply for an ABN on the one form if you don’t already have an ABN)
- lodge your activity statements online
- lodge your activity statements monthly (if you are lodging quarterly, you can elect to lodge monthly)
- make your activity statement payments electronically.
When am I not eligible?
You may not be eligible if:
- you are not up to date with your tax returns or payments – this includes members of GST groups, branches and joint ventures (see GST group members and representatives)
- you or anyone relevant to the application has, in the past three years, been convicted or penalised by a court for specific offences.
Imported goods under $1,000
Recently there were some changes so that GST now also applies to low value (under $1,000) imported goods, digital products or services.
If you’re registered for GST and you import low value goods for your business, you shouldn’t have to pay GST on these purchases.
- You need to remember to provide your supplier with your ABN and a statement that you’re registered for GST.
- If you’re charged GST incorrectly, seek a refund from your supplier. However, if the GST is less than $82.50, you can claim a GST credit on your next BAS without needing a tax invoice.
Read our complete November 2018 Taxwise Business Newsletter here