Australian GST on low-value imported goods

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In 2017, the Australian government passed new legislation on the Goods and Services Tax (GST). The legal reforms, coming into effect on July 1, 2018, aim to ensure that both Australian goods and foreign low-value products are subject to the same tax regime.

This article is based on the Australian Taxation Office (ATO) documentation and includes our recommendations only. To ensure that your business is 100% compliant with the new Australian GST regime, please consult your tax lawyer.

Please read through the following questions to understand how the new GST law may affect your online sales.

In this article:

What has changed?

As of July 1, 2018, GST on low-value goods applies to the products with a customs value of less than or equal to AUD 1,000 that are sold to the customers from Australia.

Sellers that are subject to the new law will need to:

  • register with the Australian Taxation Office (ATO),
  • charge and collect GST on sales of low-value products to Australian customers (unless they are GST-free or sales of alcoholic beverages and tobacco products),
  • lodge returns with the ATO and make payments to them.

Who is impacted?

The new tax regime affects overseas businesses that sell low-value goods to Australian consumers (B2C sales).

The new tax legislation does not apply to sales of low-value imported goods made to Australian GST-registered businesses (B2B sales).

What do you need to do?

If you sell to Australian consumers (B2C):

  1. You need to register your business with the Australian Taxation Office (ATO) and meet reporting, payment and record-keeping requirements.
  2. You need to charge 10% GST on sales of low-value goods.
    To do that in your Ecwid Control Panel → Settings → Taxes, you need to set up a manual 10% GST rate on low-value products for Australian zone. The option Include tax in product prices should be enabled.
  3. You should lodge returns to the ATO.
You do not need to charge GST in case:
  • An item you sell is a tobacco product, an alcoholic beverage or is worth over AUD 1,000.
  • You sell multiple goods with a total customs value of more than AUD 1,000 in a single order.

If you sell to Australian GST-registered businesses (B2B):

  1. You need to collect Australian Business Numbers (ABN) at checkout in your store to confirm that the purchase is made by a GST-registered business.
    To do that you can either rename an existing field in the address form or add a custom one with the help of Checkout Questions application for Ecwid.
  2. You do not need to charge GST on sales made by GST-registered businesses.
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