Australian Steel News – Industry Insider February 2021
The payment of Customs Duty and the applicable Goods and Services Tax (GST) can impose a burden to your business cash flow. In most cases, these costs need to be paid prior to collection of cargo by the agent performing the clearance and in turn you will be asked to pay these costs at the same time so that the agent paying on your behalf is not out of pocket, however there is an avenue for you to defer the payment of GST.
In a previous Industry Insider article information was provided regarding Trusted Trader and deferring payments of Duty. The same can be done with GST which can be a much simpler process than becoming a Trusted trader and could be a quick win for importers looking to assist in Cash Flow pressures.
The Australian Tax Office (ATO) provides a mechanism for importers you defer their GST payments to their Business Activity Statement (BAS) period, this alleviating the need for upfront payment. The ATO Deferred GST Site provides the requirements for importers who hold an Australian Business Number (ABN) and lodge their BAS online and pay electronically.
GST is charged on the Value of the Taxable Importation (VOTI), which put simply if the sum of the value of the goods, International Freight and Insurance Charges plus any Duty Applicable. GST can add up quickly on higher value metal imports such as Stainless and Aluminium making the Deferral mechanism especially handy in these areas.
At the time of entry lodgement the GST costs will appear as deferred on the entry with a copy of the deferral amount being sent to the ATO from Border Force which then appears on your BAS statement for reconciliation and lodgement.
For importers who are responsible to pay their import entry charges, even when dealing with overseas suppliers on a Free into Store basis, can also take advantage of deferred GST as long as they meet the following eligibility requirements.
To participate in the deferred GST scheme, you must:
• have an Australian business number (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)
• lodge your activity statements online and pay electronically
• lodge your activity statements monthly (if you are currently lodging quarterly, this will be changed to monthly once we receive and approve your application)
• ensure the goods or excise-equivalent goods are for home consumption
• if you are a member of a GST group, ensure your nominated representative is registered for the DGST scheme.
Your company accountant may be able to give you more information on whether your company is eligible to participate.
Written by Simon Pepper
Director – Customs & Logistics
Published in Australian Steel News – Vol 4, Issue 6 – Feb 2021
If you would like any additional information regarding GST deferral please contact Simon Pepper at simon@sila.net.au