GST Threshold Just under $1000 AUD

Macgyver on 16/12/2021 - 21:05

Hi,

I have read a few forum posts about this but they are pretty old. I am going to buy an item and after currency conversion, it will be 994 AUD.

Then there's about 30 AUD for shipping. From these old posts, my understanding is if that the item is under the amount of 1000, GST won't be applicable.

Is that still the case?

Will my package be noticed because I am so close to 1000 AUD? The seller has said that the customs declaration/DHL waybill will state 994 AUD instead of that amount in JPY, so I should be clear of currency conversion tipping it over 1000 AUD.

Thanks,

General Discussion

Comments

  • b-t on 16/12/2021 - 21:15
    +8

    Correct me if I'm wrong, but as I understand, that law has already been superseded by a new law which taxes all "low value imported goods".

    Before, anything under 1K was considered low value and hence did not have the 10% GST slapped on. Then (relatively) recently, they've introduced a new law which would make literally anything imported from overseas to be taxed at the 10% GST.

    The only way (that I'm aware) of an item to not have the 10% applied is to label the item as a gift.

    • chcse on 16/12/2021 - 21:21
      +4

      My understanding is that low value imported goods is up to the overseas seller to charge and remit the 10% to the ATO, the buyer doesn't have to do anything (i.e. it's on a voluntary basis / honour system, if the seller is private or if they just don't want to, the 10% on low value goods won't be charged). Whereas if the goods are over $1k, then the overseas seller should not charge 10% as once it arrives in Australia, customs (or whoever is responsible) charges the GST and other taxes to the buyer before releasing the goods.

      • Amaris on 16/12/2021 - 21:28
        +2

        The value of the good includes shipping so the OP's item will be above $1000

        • DashCam AKA Rolts on 17/12/2021 - 00:50
          +1

          Correct, and as the total of the goods + shipping is >$1000, OP is up for GST + customs duty + customs processing charge of $90.

        • Butt Scratcher on 17/12/2021 - 10:54
          +1

          There are seriously a lot of bad info here, because people don't seem to understand that custom duty tax and GST are two different schemes (sorry to single you out).

          One does not override the other, but if a good has already paid taxes on GST then they won't/shouldn't get charged at the border/customs. It's important to make this distinction when we are talking about imported goods

          Custom duty tax is taxed on the value of the good only, whilst GST is charged on both shipping and the goods

      • AustriaBargain on 17/12/2021 - 01:10

        Most popular online sellers to Australia already automatically add the GST. But many businesses that ship to Australia that aren't quite the mainstream way of ordering stuff do not collect GST. Even mainstream online services are starting to charge GST.

    • apsilon on 16/12/2021 - 21:49
      +3

      That's a common misconception. The value doesn't matter, could be $10 for example, if the retailer is registered and collects GST (has to be doing over $70k pa of sales into Aust but as ATO has no idea I doubt they all bothered) however if the retailer does not collect GST then the $1k limit still applies. For those that don't believe it: https://www.abf.gov.au/buying-online/buying-online

      Bad news for OP is GST is calculated on the combined value of goods and shipping.

      • b-t on 16/12/2021 - 21:57

        Hang on…

        However, From 1 July 2018, the Goods and Services Tax (GST) may be collected by overseas vendors of such low value goods when imported from overseas by consumers in Australia. GST will be charged at the point of sale and not at the border.

        The keyword/phrase here that I'm not understanding is may be.

        Does that mean if I (hypothetically) collude with the overseas vendor to not charge the GST portion, and the goods are under $1000, then technically I shouldn't need to pay GST on the goods at all?

        In this case, I need to lodge a complaint because DHL forced me to pay import tax on some goods that I had shipped over from China…

        • apsilon on 17/12/2021 - 06:37

          Does that mean if I (hypothetically) collude with the overseas vendor to not charge the GST portion, and the goods are under $1000, then technically I shouldn't need to pay GST on the goods at all?

          Correct. The "may be" is because not all retailers/services are required to register for GST. As I said above they need to be doing yearly sales into Aust over $70k to be required to register and collect GST.

          In the case of DHL they would definitely be registered and therefore required to collect GST.

        • Butt Scratcher on 17/12/2021 - 10:28

          Does that mean if I (hypothetically) collude with the overseas vendor to not charge the GST portion

          Even before this, you could always collude by asking them to mark it as a gift to avoid tax. But I would imagine that large reputable sellers aren't too keen on colluding with purchasers because it's literally tax evasion

    • Butt Scratcher on 16/12/2021 - 23:56

      that law has already been superseded by a new law which taxes all "low value imported goods".

      Not at all the case. Even the source you provided explicitly says it doesn't on the first page…

      OP seems to get the general idea though

  • KaTst3R on 16/12/2021 - 21:23
    +4

    You pay GST on everything now (thanks Gerry Harvey). The only difference is where it is collected, by the supplier (like Aliexpress) or you declare and pay.

    • Stopback on 16/12/2021 - 21:25
      +1

      Wonder if Ali is just taking that GST as profit and not declaring

      • KaTst3R on 16/12/2021 - 21:27

        You did your part and that is all it matters. ATO cant accuse you of evading tax.

      • Macgyver on 17/12/2021 - 00:46

        I've always wondered that as well. Even some not so well known sites are forcing GST on Australians yet who knows if they are paying GST to the government or just pocketing it?

  • racer1234 on 16/12/2021 - 21:28

    Pretty sure shipping is included in the value as well. So 994 + 30 and you are over. Then you will get hit with charges from the courier companies to do GST collection. Approx $100 plus the GST so maybe $200 extra. This is only from my very limited experience and may well have changed and be subject to a bit of luck of the draw as to whether the parcel is checked.

    • Macgyver on 17/12/2021 - 00:45

      Yeah not sure really. Some people say shipping isn't included, some say they do.

      • DashCam AKA Rolts on 17/12/2021 - 00:53

        From recent experience, shipping is definitely included in calculating the GST.

  • raptormesh on 16/12/2021 - 21:40
    +1

    You'll get hit, the $1k threshold is obsolete.

  • foxmulder on 16/12/2021 - 22:05

    If the sender can declare the value of order at AUD 994 thus you should not pay any duties, govt charges, dhl admin fee (free for FedEx). If sender doesn't collect GST on your purchase, you don't pay GST either. Different stories if the shipment is declare at foreign currency as most likely it will be calculated at the time it was received by custom at its current exchange rate.

    • Macgyver on 17/12/2021 - 00:44

      So doesn't matter if the shipping is another $30 on top right? That's ignored?

      • foxmulder on 17/12/2021 - 07:29
        +1

        What's written in shipping form that's the order value. Normally only the item is specified in the form.

  • PissLUR on 16/12/2021 - 22:22

    Customs will assume that GST has been collected by the seller.

    The next question is whether it has exceeded the AUD $1,000 threshold or not as you will need to pay import duty.

  • Macgyver on 17/12/2021 - 00:42
    -1

    The website isn't paying GST, it's just some random Japanese site that sells watches and stuff.

    From the old posts I've read, they started if the price of your goods are under $1000 then you don't pay anything, postage doesn't matter.
    If your goods are over $1000, then you pay GST on the goods and the shipping.

    Just wanting to confirm. The item is being sent by DHL is that matters? Sounds like they are more likely to get you to pay for GST?

    • DashCam AKA Rolts on 17/12/2021 - 00:56
      +4

      As the total of the goods + shipping is >$1000, OP is up for GST + customs duty + customs processing charge of $90. If an agent handles the process for you, you will be charged additional fees on top of the government charges.

    • b-t on 17/12/2021 - 09:52
      +1

      As I mentioned in a previous comment, my experience with DHL is when the seller declares the value of the goods on the shipping slip, once it enters into the Australian border, they will withhold it and send you an SMS that looks like this: https://i.imgur.com/JCEQUgx.jpg

      You won’t get your parcel until you pay the tax using that link they provide.

  • Dumax on 17/12/2021 - 10:12

    There is an example on the ATO's website

    The customs value is the price the goods are sold for, minus freight and insurance from the place of export.

    …

    Noel buys one pair of jeans for A$350, including A$50 for shipping to Australia and insurance. The jeans are a low value good because they are less than A$1000. The customs value of the jeans is A$300.

    So I would interpret this to mean that the value of the goods, excluding shipping/insurance is used to determine if the goods are above/below $1000 (i.e. the scheme/legislation that is to be applied). Once this determination is made, GST is charged on the total value including shipping/insurance (+duties in the case of >$1000).

    The key distinction between the schemes is that goods under $1000 must have GST collected by the seller at the point of sale (i.e. not at the border), whilst goods over $1000 can be either collected by the seller or at the border.

    In your case, as the customs value of the item is <$1000, it is the responsibility of the seller to collect GST at the point of sale (if they are required). If the seller is not required to collect GST (i.e. has under $75,000 in GST turnover) then you will not be required to pay GST at all.

    • Baysew on 17/12/2021 - 11:14
      +1

      GST over $1000?

      Updated Border Force link from that post

      GST is payable on imported goods unless the goods are covered by an exemption. The A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) states that the importer shall pay GST at the same time and in the same manner as customs duty is paid. It also provides that the rate of GST applicable on taxable importations is 10% of the value of the taxable importation. The value of the taxable importation is the sum of:

      the customs value (CV) of the imported goods
      any duty payable
      the amount paid or payable to transport the goods to Australia and to insure the goods for that transport (T&I), and
      any Wine Equalisation Tax (WET) payable, if applicable.

      Better to be way under or way over the $1k threshold. My experience is that these charges are not consistently applied. Also customs can decide if the value on declaration is understated, so they will apply their own value to the item.

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