Did you know the Australian Taxation Office (ATO) operates a scheme that allows importers to defer GST on imported goods?
Before you get too excited The Deferred GST Scheme covers GST only. It doesn’t impact customs duty, which must still be paid at the time of importation.
What this means for businesses is that rather than having to incur the payment of GST on imported goods when they land in Australia, effectively this GST isn’t paid until the activity statement for the month is due to be lodged and paid, which helps clients cash flow.
Scope of the scheme
Deferral of GST on imported goods extends to all importations entered for home consumption (“home consumption” means the goods enter into the commerce of Australia), either at the time of importation or from a Licensed Customs Warehouse.
How does the scheme operate?
When goods are entered for home consumption, you are required to quote your ABN to Customs. If the owner is approved to defer payment of GST, the imported goods are released after customs duty and/or other charges are paid. Customs records the GST liability of each importation as it is finalised. This is then reported to the ATO and included automatically on your next activity statement.
Getting approved for the 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)
- have a good compliance record
- lodge your activity statements and communicate with Customs online
- lodge your activity statements monthly (if you are lodging quarterly, you can elect to lodge monthly)
- make your activity statement payments electronically.
Disqualification from the scheme
You may be removed from the Deferred GST Scheme if you:
- fail to lodge their Business Activity Statements by the due date;
- fail to pay their ATO obligations by the due date;
- are subject to administrative penalties under any Act administered by the Commissioner; or
- no longer meet the eligibility criteria on an ongoing basis.
The 542 experience
At 542 Partners we have a number of customs and freight forwarders clients utilising the deferred GST scheme. We have the expertise and experience to look after importing, shipping, trade and logistics businesses.
Are you in shipping, customs or logistics? We can help.
Talk to us to arrange an obligation free consultion.
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