GST on Imports to Australia: How the Tax Is Calculated and When You Need to Register

Import GST is payable on a taxable importation, not automatically on every consignment. An importer must separate whether the importation is taxable, how the value of the taxable importation (VoTI) is calculated, whether payment can be deferred, and whether the business must register for GST. Australian Border Force (ABF) administers payment at clearance and reports paid or deferred GST to the Australian Taxation Office (ATO). The governing law is *A New Tax System (Goods and Services Tax) Act 1999*; check the legislation and agency requirements in force when the entry is made.

How import GST is calculated

For a taxable importation, the rule is:

Import GST = 10% × VoTI.

VoTI is built from:

• The customs value of the imported goods.
• The amount paid or payable for international transport to the goods’ place of consignment in Australia and insurance for that transport, but only to the extent those amounts are not already included in the customs value.
• Any customs duty payable.
• Any Wine Equalisation Tax payable, if applicable.

The transport-and-insurance wording is decisive. If an amount is already included in the customs value, it must not be added again when calculating VoTI. The customs value is the starting point, but the taxable amount can also include statutory additions; it is not simply 10% of the supplier’s invoice.

These rules cover goods entered for home consumption under s13-5 of the GST Act and goods cleared without a customs entry under s114-5, including passenger and informal clearances. Crossing the border does not by itself settle whether GST is payable.

When import GST is payable

ABF says the importer pays GST at clearance, in the same time and manner as customs duty, unless approved for GST deferral. Without that approval, even an importer that is not GST-registered must pay GST on a taxable importation at clearance.

An importer must meet the deferral scheme’s requirements, including:

• Holding an Australian business number.
• Being registered for GST.
• Lodging a BAS through the ATO’s online electronic system each month.
• Paying BAS liabilities electronically.
• Interacting electronically with ABF.
• In principle, having no unpaid tax or unfiled returns.

Any customs duty remains payable before the goods are released. The deferred GST is included in the net-liability calculation in the BAS for that month, so approval changes the payment timing rather than the VoTI or rate. A registered entity must lodge its BAS within 21 days after the reporting period ends.

Why it is not always 10% on everything

The 10% rate applies only if the importation is taxable. The GST Act identifies three categories of non-taxable importations.

• Goods that would be GST-free or input-taxed if supplied in Australia, under s13-10 of the GST Act. ABF’s official examples include basic food, certain medical aids and appliances, cars for use by disabled people, and precious metals. Definitions matter: food and medical products are not automatically included merely by description, and precious-metal treatment concerns qualifying investment form rather than jewellery.

• Imports that qualify for specified customs duty concessions, under s42-5 of the GST Act. Examples in the Fourth Schedule to the *Customs Tariff Act 1995* include official use by foreign governments, the Status of Forces Agreement, passenger concessions, warranty or global product-safety recall repairs, repair or processing for re-export and TRADEX, donations and bequests, inheritances, low-value goods or samples, and certain export containers.

• Goods returned unaltered with unchanged ownership, under s42-10 of the GST Act. This concerns qualifying goods originally acquired in Australia, exported by their owners and then reimported. ABF describes qualifying importer histories involving an importer who manufactured the goods, a previous purchase on which the supply was taxable, or a previous taxable importation.

The appropriate GST exemption code must be identified on the home-consumption entry.

Why customs-duty-free does not mean GST-free

A nil customs duty does not automatically mean no GST. ABF states that regulations have not been made for s42-5(1C) of the GST Act, so imports under Items 1, 3, 7, 12, 13 and 29 of the Fourth Schedule to the *Customs Tariff Act 1995* are taxable importations even though customs duty is free. Check the concession and current law rather than inferring GST status from duty status.

Temporary imports can enter free of duty and tax for up to 12 months, but ABF describes this as a mechanism that delays payment, not an exemption. If the goods remain in Australia, duty and GST must be paid.

When GST registration is required

The registration threshold concerns GST turnover, not the value of an import consignment. For a business or enterprise, either rolling 12-month test can require registration:

• Current GST turnover: $75,000 or more across the current month and previous 11 months.
• Projected GST turnover: likely to be $75,000 or more across the current month and next 11 months.

Even if the current threshold is reached, registration is not required if the ATO is satisfied that projected GST turnover will be below the threshold. A new business must register within 21 days of being required to do so if it expects to reach the threshold in its first year of operation.

A non-profit organisation must register when its GST turnover is $150,000 per year or more.

GST turnover is based on gross income from businesses, not profit, less GST and specified exclusions. Those exclusions include input-taxed sales and sales not connected with Australia.

An ABN is required before GST registration. Once registration is required, it must be completed within 21 days of GST turnover exceeding the relevant threshold.

Does reaching the threshold rewrite earlier import history?

The official position on retrospective consequences needs precision. The ATO says that an entity that did not register when required may have to pay GST on sales made since the date it was required to register, even if GST was not included in the price. Penalties and interest may also apply.

That statement concerns sales and the registration date. It does not say that reaching the threshold automatically reopens and recalculates every earlier importation. A taxable importation was payable under the import rules when entered, while the cited position provides no basis for treating a later turnover event as automatically converting an earlier non-taxable entry into a taxable one.

Backdating a GST registration is generally limited to 4 years where fraud or evasion is not involved. That is a limit on backdating registration; it is not an instruction to recalculate four years of imports. A specific historic entry requires assessment under the current *A New Tax System (Goods and Services Tax) Act 1999* with Australian Border Force, while registration and BAS issues go to the ATO.

Common questions

Are goods in a warehouse or being transhipped taxable? No. Entries for warehousing and transhipment are not taxable importations. If warehoused goods are later released for home consumption, that release can make them a taxable importation.

What must an importer report in its BAS? Registered GST importers must report all imports in their BAS, whether taxable or not. For a non-taxable import, ABF says to use the actual amount paid for the goods plus international transport and insurance; for a taxable import, the BAS can reflect VoTI and GST paid or deferred.

Is voluntary GST registration available? Voluntary registration is available if the business or enterprise does not meet the mandatory categories. If chosen, it generally must remain registered for at least 12 months.

Can one GST registration cover several businesses? Yes. You only need to register for GST once, even if you operate more than one business.

Can a non-resident register for GST? A non-resident may need to register depending on its business activities. The ATO says different proof-of-identity requirements apply to non-residents.