Claim GST on Exported Goods, What's The Catch?

yummypinacolada on 09/07/2025 - 01:21

Sorry if this is a dumb question. I'm looking to partner with my friend's overseas business—he runs a freight forwarding company and needs someone in Australia to manage and pack goods that will be sent overseas. His clients will mostly be buying new items from Australian retailers or suppliers, with proper invoices.

He mentioned that there's money to be made by claiming the GST on these goods in Australia, since customs duties will also be paid when the goods arrive in the destination country. The idea is that GST should only be charged once. My friend is already experienced in this field, but I’m not.

For example, if a client buys $10,000 worth of goods with $1,000 GST, and I send those goods overseas, would I be able to claim the $1,000 GST back without it affecting my income tax? That seems too good to be true. What if a client spends $100,000—could I really claim $10,000 in GST with no catch?

I'm not registered for GST yet, but I’m currently reading up on the pros and cons. Does anyone here know what I should be looking out for?

Financial GST

Comments

  • AustriaBargain on 09/07/2025 - 01:57
    +1

    When you pay for things as a business expense you earn GST credits, which yes you can claim back at tax time. Minus the GST that you collect yourself when you sell things as a business. Most businesses make more money than they spend though.

    • yummypinacolada on 09/07/2025 - 02:26
      -1

      That's the thing, all examples I found online is that claiming GST is part of the business expenses but they still pay more to ATO through products or service they sell to the end customers. But what if my main source of income is through claiming GST from what the overseas client has bought here?

      • bluesky on 09/07/2025 - 02:44
        +6

        I think you may have a misconception.

        But what if my main source of income is through claiming GST from what the overseas client has bought here

        When you collect GST from selling, you are basically helping ATO collect a tax, which you have to submit back to ATO. Claiming GST as a source of income is not a legitimate business per se.

        • yummypinacolada on 09/07/2025 - 03:21

          Its a freight forwarder business, there's lots of cost involved when the goods reaching the destination. So I guess, this business model just make it easier for my business partner to share profit. Rather than him paying me, he just let me claim the GST for myself.

          But, I'm worried myself because if my income is basically from ATO, I also agree that its not legitimate business from ATO perspective

          • pjetson on 09/07/2025 - 12:57
            +7

            @yummypinacolada: Did you pay the GST on the items? If not, how will you be able to claim it?

            • xavster on 09/07/2025 - 22:19

              @pjetson: he is probably doing daigou (personal shopper)

          • OhNoUShiz on 10/07/2025 - 08:22
            +3

            @yummypinacolada: Sounds like you are very likely going to be cheated standing at the end of the plank. If things go south, your friend can simply blame on you for claiming the GST not him, while he continues to earn the profit through selling the goods overseas without paying you a single cent.

          • gromit on 10/07/2025 - 12:22

            @yummypinacolada: Effectively what you are doing is charging the customer in the example of a $10,000 item is a $1000 fee for the service. I would think you would need to declare that is income to be taxed. This is all assuming you are purchasing it on their behalf otherwise what you are doing is simply straight out tax fraud.

  • bluesky on 09/07/2025 - 02:12

    For example, if a client buys $10,000 worth of goods with $1,000 GST

    If the overseas client is buying, exported goods are GST-free. Client won't have to pay this GST, and you do not collect this GST on behalf of the ATO. If you are making these products for export, then you can claim the GST included in the inputs you use to make these products.

    From ATO website

    Exports of goods and services from Australia are generally GST-free. If you're registered for GST, this means you:

    don't include GST in the price of your GST-free exports

    can still claim credits for the GST included in the price of purchases you use to make your exported goods and services.

    In any case, even if you are selling these goods locally, and you are collecting the GST - it is not yours to keep. You are collecting it on behalf of ATO - and need to give it to ATO.

    • yummypinacolada on 09/07/2025 - 02:22

      From what I checked overseas clients are mostly just buying through retails store. So they buy stuff with GST, one example is they want to buy Lorna Jane clothing in bulk(not from direct supplier for export, but from online retail store), these comes with tax invoice with GST paid.

      I'm not selling anything, I'm basically just shipping the stuff my client has bought out of Australia. From what I've read, goods that are bought in Australia and exported within 60 days should be GST free. Now these clients don't care paying extra GST in Australia, now the questions is what if I claim those GST back for myself?

      • bluesky on 09/07/2025 - 02:33

        If your tax invoice lists the GST paid, then technically, that is GST you collected for ATO, which you eventually have to pay to ATO.

        Are you thinking perhaps to create two parallel invoices - one with GST for the client, and collect the GST, and then another without GST for legal purposes in case ATO check - as if it were exported goods which you don't need to collect GST, and then keep the GST yourself? If so, this practice seems a bit dodgy and may land you in trouble with ATO.

        • yummypinacolada on 09/07/2025 - 02:52

          No, I'm not creating two parallel invoices, I only create one for the purpose of exporting the items(without the GST paid). So lets say, client A has bought 5 iphones from Jb hifi for $11k, now JB hifi will provide me a tax invoice with $1k worth of GST paid, right?

          These 5 iphones will be exported within 60 days, with JB hifi as the supplier. I will claim those $1k back. Next, I will create an invoice worth of $10k for the 5 iphones like I'm selling to my partner's business. So from ATO perspective, I bought $10k worth of iphones(with my clients money) from an Australian supplier, then sell it back overseas for $10k. I got the money of $1k from collecting GST.

          In my opinion, those GST credits should be for the clients who paid for the goods, right?

          • bluesky on 09/07/2025 - 03:13
            +1

            @yummypinacolada: If you are a business that buys from Australian store, and sells it overseas, then it would seem reasonable that you can claim the GST as input tax credit. Perhaps check with an expert/accountant also, just to be sure.

            • yummypinacolada on 09/07/2025 - 03:18

              @bluesky: Thanks for your input at this hour. Yes, I will discuss this with an accountant to be on the safe side.

          • bluesky on 09/07/2025 - 04:19
            +1

            @yummypinacolada:

            So lets say, client A has bought 5 iphones from Jb hifi for $11k

            I just noticed the figures in your example. I assume the client hands over $11K to buy the goods, but you invoice the client for $10K. ATO could consider the additional 1K as undeclared income.

            Transaction trails (e.g., funds transfer, etc) are bound to exist, so if you want to stay above board, the safer thing to do would be to invoice $11K, the same amount you get from the client to buy the goods. Then, you pay tax on the profit of $1K - which is $250 (for small businesses). If you receive an input tax credit of $1K, you are still $750 ahead.

      • gromit on 10/07/2025 - 12:24
        +1

        If it is not your tax invoice and they have not authorised you to claim that GST on their behalf you are effectively commiting tax fraud and theft(it isn't your money to claim). you can't just take other peoples receipts and claim the tax back.

      • Muppet Detector on 10/07/2025 - 12:27

        You can't claim the GST, you didn't pay it! It is not your money.

  • jizmo on 09/07/2025 - 04:17
    +8

    His clients will mostly be buying new items from Australian retailers or suppliers, with proper invoices.

    They're the ones who will be looking for tax free exemption if any on the products.
    You can only claim operational costs associated with the business as you are only a freight forwarding company.

    Do you think DHL are opening parcels and are trying to claim GST on everything they send overseas.

    • apsilon on 09/07/2025 - 06:55
      +4

      This is how I read it and that's definitely not how it works OP. You can't claim the GST on something you didn't buy just because you're dropping it in a box and posting it OS

    • furyou on 09/07/2025 - 20:32

      Exactly, seems like OP is trying to take GST that the clients paid for. Talk to a shady accountant.

      Probably one of those things we'll hear about in 5 years on A Current Affair how you made millions and paid for three houses tho

  • JIMB0 on 09/07/2025 - 07:01
    +2

    You could make even more money from cashback and discounted gift cards.

  • mskeggs on 09/07/2025 - 07:24
    +1

    You will never own the items and have a GST invoice with your name and details on it for you to claim the GST back for yourself.
    There are tourist tax refund businesses that organise the refund of VAT/GST etc. overseas that might be a model for you to act as the agent for your forwarding customers.
    Give the ATO a call and instead of asking how you can get rich, ask them how you can act as an agent for your customers in this example.

  • joka on 09/07/2025 - 07:34
    +1

    Just tell them you are a Nigerian prince and take their money

  • brendanm on 09/07/2025 - 08:44
    +7

    I can see this business venture going well.

    • SBOB on 09/07/2025 - 08:51
      +13

      Next post
      I've been conned by someone overseas who I thought was my friend in a money laundering scam

  • djsweet on 09/07/2025 - 08:51
    +2

    I think the way this would need to work is for the client to pay you $11k for 5 iPhones. You issue an invoice to the client for 5 iPhones. You go to JB Hifi and buy 5 iPhones and JB Hifi issues an invoice to your business. You claim a GST credit which would be offset against any GST collected (which in this case would be zero since you are selling overseas). I used to work in a business which operated in an area which did not attract GST for its services, and to my memory, we frequently received GST refunds from the ATO for business expenses which had included GST (such as stuff from the supermarket - most b2b sales are ex-gst).

    • yummypinacolada on 09/07/2025 - 09:45

      Yep, that's right. Do you know any potential issue with the ATO?

      • djsweet on 09/07/2025 - 10:13

        If its a legitimate business expense and you are registered for GST, then you can claim the GST back. But as a business you would usually not pay the GST in the first place. B2B sales don't normally include GST.

        • Ponsonby on 09/07/2025 - 12:38

          Of course B2B sales include GST. It is just that GST paid by a business for inputs to that business's goods and services can be claimed back from ATO.

      • bluesky on 09/07/2025 - 13:02

        Please refer to the my comment above, to avoid potential issue with ATO. To stay above board, the invoice you create should be in the same amount you actually receive from the other party.

      • Muppet Detector on 10/07/2025 - 12:29

        YES. GST literally belongs to the ATO.

        It is not yours. You can't keep it.

  • Gunnar on 09/07/2025 - 09:06
    +5

    Does anyone here know what I should be looking out for?

    Your friend’s crappy advice

  • pegaxs on 09/07/2025 - 09:26
    +8

    Money first, then buy the goods. NEVER buy these goods with your own funds. It just sounds like a long-con scam in the making.

    Them telling you you can “make money” claiming the GST sounds like a bullshit arrangement, as “claiming GST isn’t a “real job” and even if you were doing it this way and keeping the GST for “services rendered” you would still need to claim this as income.

    Getting the GST back on goods you are sending on a commercial quantity and your kickback on the deal is to just “keep the GST” would amount to you basically working on a commission basis and you would need to declare this payment as income.

    You are 100% being set up.

    • Jimothy Wongingtons on 09/07/2025 - 09:39
      +5

      my favourite part was where op said

      So I guess, this business model just make it easier for my business partner to share profit. Rather than him paying me, he just let me claim the GST for myself.

      • DashCam AKA Rolts on 09/07/2025 - 11:10
        +3

        How very dare you! Impugning the reputation of Nigerian royalty!

        • Protractor on 10/07/2025 - 12:32

          Is it really possible to impugn a Nigerian prince?

    • yummypinacolada on 09/07/2025 - 09:59

      Ofc, I wouldn't use my own money to buy the goods. Also yes, I will declaring this GST credits as income, but at the moment I'm just looking at the right way to do it.

      My partner has done these with lots of his partner from overseas, but each countries has different regulation which he doesn't know. So I'm the one who needs to do my diligent to make sure i don't get into any trouble doing business with him.

      • Protractor on 09/07/2025 - 11:05
        +4

        Then you should cover your arse. Rather than hunting for a shortcut (on a forum) to fulfil the other guys business model.
        you need to find out the tax laws in this country first and foremost, and follow them. Because he won't be breaking rocks on your behalf,in his country, if you cross the line here.
        Also if you think the ATO doesn't have thousands of active algorithms scouring the internet at any given time, you underestimate their work ethic.

      • bluesky on 09/07/2025 - 13:19
        +3

        I will declaring this GST credits as income

        You cannot declare this as income once you also claim it as input tax credit.

        So using your example, you are running a buying from local and selling overseas business.
        The other party gives you $11K. You buy iphones for $11K (GST-inclusive)
        You invoice the client for $11K (ex GST).
        Your profit is $1K ($11K revenue -10K cost).
        You pay income tax on 1K (which is $250).
        And you also claim the input tax credit of $1K.
        The net amount to you is $750.

        This is the most legitimate way to do this. And even so, there may be more issues - which an accountant can provide advice on.

        • yummypinacolada on 09/07/2025 - 20:56
          +1

          Hi, I just spoke to an accountant today. Yep what you said basically summarise it. However the net profit sales doesn't always needs to be same value as GST, might be more or less. The higher the net profit, the more tax income I need to pay. The key takes is that I can't just be claiming GST credits without having any income.

          For example buying $11k worth of goods
          claim $1k GST from the $11k
          so total expenses $10k
          then sell it overseas for $10k
          so practically the business runs with no income - this will attract ATO attention eventually

          Also the accountant highly advise not to register for GST until total projection of annual sales is $75k or more, otherwise it won't be worth the hassle.

          • xavster on 09/07/2025 - 22:30
            +1

            @yummypinacolada: Your accountant is correct, for a business that makes no money and continues to claim GST credits, is highly suspicious and gives Plutus payroll vibes.

            Best of luck with your tax scam business.

            • apsilon on 10/07/2025 - 05:26

              @xavster: The accountant also said not to register for GST which will make claiming GST rather difficult.

              • yummypinacolada on 10/07/2025 - 11:59

                @apsilon: No I can't claim GST if I don't register for GST, what he's saying is I should wait to register for GST once my projected annual sales reach $75k rather than now.

          • terlalu on 10/07/2025 - 09:34
            -1

            @yummypinacolada: OK, so buy $11k worth of goods — sell to your client for $12k.
            Ship the $11k goods + $1k cash to your 'client', so in reality they've paid you $11k.

            Claim back $1k GST.

            ozb and reddit… both are great sources of financial advice.

          • bluesky on 10/07/2025 - 16:35

            @yummypinacolada: Thanks for the update about the accountant's advice. Think carefully about how you structure this partnership. All the best.

  • Protractor on 09/07/2025 - 10:11
    +1

    Sounds like a great OS money laundering model.Especially if you drag in dirty money at one end, or crypto, in the process. Making money from thin air. WCPGW?

    PS Get your RADAR checked.

  • djsweet on 09/07/2025 - 10:30
    +1

    You are phrasing this really weirdly or you are trying to do something dodgy. If you are just buying and selling goods as many businesses do, then the regular rules apply. Collect GST on sales within Australia, do not collect GST on sales overseas. If you pay GST when buying the items you are selling this is offset against GST collected and the balance is squared up at tax time or quarterly with BAS (can't recall exactly). How much you charge the customer is up to you. If a customer buys an iPhone they are buying it from you - not JB Hifi. You can charge them what JB Hifi's sticker price is if you want. But that is up to you. If you do this then the customer pays well over cost since the JB price includes GST and you aren't collecting GST from them because its an overseas sale. This extra money is your profit margin. Its not like they are paying GST and you are claiming it back or whatever your post makes it sound like.

  • jv on 09/07/2025 - 10:59

    Sounds dodgy.

  • radicalvin on 09/07/2025 - 11:32

    Sounds like your friend is a daigou, if that's correct then yeah you should be able to claim the gst, as your friend will probably upsell the products to his customers and profit on them.

    Are you going to be buying the goods on their behalf and ship them overseas?

    Unsure on the process on claiming them though, you'll probably need a business accountant

  • foxmulder on 09/07/2025 - 12:57

    If you copy and paste your original post to Gemini, it gives out great reading and seems accurate.

    Some of the comments it made:

    GST (and VAT in other countries) designed to ensure that the tax is ultimately borne by the consumer in the country where the goods are consumed, and to avoid "double taxation" or making exports uncompetitive.

    GST isn't considered taxable income.
    My comment: Thus if you purchase $11,000 and get the same money from your, you usually claim $10k as your expense, $11k as your income, with $1k as GST credit. In your personal income tax it should be under small business section.

    To claim GST credits, you must have a valid tax invoice for any purchase over $82.50 (including GST). Ensure the Australian retailers or suppliers you buy from provide these.
    My comment: For any purchases over $1k you need to have your name and details in the receipt.

    Nature of the Business Relationship. The GST rules will apply differently depending on the exact nature of the transaction. If you are the one making the supply (selling the goods) to the overseas client, then your supply would be GST-free. If your friend's company is the importer/purchaser and you are providing a service to them (packing, managing), that service could also be GST-free if the recipient is outside Australia and the service is used outside Australia. It's important to clarify this with your friend and potentially seek professional advice.

    This type of arrangement (claiming GST on exported goods) is a common and legitimate practice for businesses that export. The "catch," if you want to call it that, is ensuring you comply with all the ATO's requirements for GST registration, record-keeping, and export documentation.

  • Davo1111 on 09/07/2025 - 15:39

    ive been taking gas from my apartment, re-compressing it back into cylinders and then reselling.

    • Nalar on 09/07/2025 - 16:04
      +2

      This guy knows how to profit good! Do you run the compressor from power plug in a common area?

      • Davo1111 on 09/07/2025 - 19:49

        how did you know….

        • Nalar on 09/07/2025 - 21:33

          The force is strong in this one

  • GachaGamer on 09/07/2025 - 17:24

    You are either trolling or seriously confused. As a business if you register for GST it's because you want to claim back the portion of GST you paid for goods/services involved in running that business. GST others (those overseas) pay (which they shouldn't be) would not be yours to keep, as they belong to the ATO and you must pay the ATO whatever GST your business has collected from sales via your quarterly or annual BAS (since you probably aren't earning over 20m to be doing it monthly, if you are asking such a dumb question).

    In this case (which doesn't really make sense), two essential main instances where you could claim GST if you as a business register for it are: 1) for any goods and services paid for/incurred by the business that is not GST free/input taxed; 2) taxable importation that is for a creditable purpose.

    What you are trying to describe in the example appears to me to be attempted fraud, the business is trying to charge GST where it shouldn't be and is doing so in order to claim said GST back from the ATO as "free money" (which is not how it even works since the business would be collecting and paying that amount to the ATO in that example). Not to mention how muddy things seem to be from how unclear your situation is. Are you selling items on his behalf? Or are you simply organizing packaging/freight out of Australia?

  • CodeXD on 09/07/2025 - 17:27

    Yes ATO this post right here.

  • dirtydealdog on 09/07/2025 - 19:54
    -1

    The catch is you have to let John Howard into your friend circle. He’s a lonely guy just looking for some company. Fair warning, he does go on about GST.

  • OZBargain 2019 on 09/07/2025 - 22:44
    +5

    You can’t claim GST because you haven’t paid GST, you’re not registered for GST, and the invoice is not in your name. Also, the expense is not related to your business.

    The actual purchase was made by the client, so you have no right to claim anything from it. If your friend is telling you otherwise, they are misleading you.

    What you’re trying to do is considered tax fraud, and if the ATO finds out, you could be forced to pay back the amount along with heavy fines.

  • BartholemewH on 10/07/2025 - 12:37
    +1

    If you are personally buying the items and reselling/exporting the items, then of course you can claim the input tax credit and charge the total out as GST free for export. But why would you take on associated risk for less than 10% of the total? (The GST claimed less the tax on the extra income you have declared). You need to consoder the costs of running a business, even if they are only on paper. You also need to get the goods exported and complete the associated paperwork for the shipments. You also need to take forex gains/losses into account.

    • bluesky on 10/07/2025 - 16:22
      +1

      Yes, the margin of this operation (as the OP describes it) seems a bit too slim to be worth the effort.

  • OpenAI on 10/07/2025 - 14:04

    The catch is nothing raise more red flags for the ATO to audit your ass than a $$$ worth of GST credits. Normal businesses have both expenses and revenue and good luck on the lawyer fees fighting the ATO on legitimacy of these credits. The only way to fly under the radar is to take these goods out physically and claiming TRS.

  • UFO on 10/07/2025 - 19:59
    +1

    If your clients are buying the item directly THEY are the ones that can claim the GST refund, not you.

    If YOU are buying it for the client and then on-selling it to them (for an increased price because you're handling and shipping the item overseas), the GST you are paying is claimable back as a credit.

    But you can't claim GST that someone else is paying… that's tax fraud. "Your friend giving it to you" is rubbish.

    The items you buy for your clients need to be paid by you, invoiced to you, and tax paid by you.
    You need to register for GST, and allow a method of payment to you by these clients (credit card fees!)
    What you charge the clients for those products (the GST inclusive price plus additional shipping) is your business and your profit… of which you would of course pay tax on.

    That's where you make your "10% profit"… but its not directly the GST credit, it's the profit you make from the sale- which is then assessed as income and taxable after costs.
    After tax, after shipping costs, your labour and time to buy the original items, you're making very little… far less than 5%.

    Unless you can sell these items for much greater mark up, you aren't profiting on this venture.

  • Antikythera on 10/07/2025 - 20:54

    step one: buy goods with stolen credit cards
    step two: deliver goods to local patsy.
    step three: patsy forwards goods internationally.
    step four: patsy claims GST as payment.
    step five: place bets on ATO, AUSTRAC or Police being first to knock on door.

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