Short Answer
Introduction
For Australian sole traders, small business operators, bookkeepers, and importers, understanding how GST applies to imported goods is essential for accurate compliance and cash flow management. The Australian Taxation Office (ATO) and the Australian Border Force (ABF) administer a system that hinges on a key threshold: the A$1,000 low value threshold (LVT). Goods valued at or below A$1,000 are generally free of GST at the border, while goods above that amount attract GST, customs duty, and other charges. This pillar article explains the mechanics of the threshold, how to calculate import GST, the deferred GST scheme, and common pitfalls. Whether you import physical products, digital services, or act as a bookkeeper for clients, this guide provides the foundational knowledge you need.
FAQ
Do I have to pay GST on goods under A$1,000 imported from overseas?
Generally, no. Goods valued at A$1,000 or below are not subject to GST at the border. However, if the goods are part of a larger consignment or if you are GST-registered and import for business, you may still need to account for GST under the reverse charge rules for services or if the goods are subject to excise.
How is the A$1,000 threshold calculated – is it the purchase price or including shipping?
The threshold is based on the customs value, which includes the cost of the goods, insurance, and freight (CIF) to Australia. If the total CIF value is A$1,000 or less, the goods are below the threshold. Shipping costs are included.
Can I claim back GST paid on imported goods if I am GST-registered?
Yes, if you are registered for GST and the goods are used in your enterprise, you can claim an input tax credit for the GST paid on importation. You must hold a valid import declaration or a tax invoice from the supplier (if reverse charge applies).
What is the deferred GST scheme and who can use it?
The deferred GST scheme allows GST-registered importers to defer payment of GST on imported goods until their next BAS lodgement. It is available to businesses that are registered for GST, have a good compliance history, and import goods for their enterprise. You must apply to the ATO and use a deferred GST account.
Do I need to pay GST on imported digital services or software?
Yes, if you are a GST-registered business importing digital services (e.g., cloud software, online subscriptions) from overseas, you may need to self-assess GST under the reverse charge mechanism. The supplier may also charge GST if they are registered in Australia. The A$1,000 threshold does not apply to services.