If your business imports goods or buys stock from overseas suppliers, understanding how Goods and Services Tax (GST) works at the border is essential. Importing can unlock new products, better margins and wider choice, but it also brings tax and compliance steps you can’t afford to miss.
In this guide, we break down when GST applies to imported goods, how it’s calculated and paid, what’s changed for low value goods and online purchases, and the practical steps to stay compliant. We’ll also highlight the key legal documents that help you manage supplier risk and keep your eCommerce operations running smoothly.
Important: Sprintlaw is a commercial law firm. We don’t provide tax or accounting advice. The information below is general in nature - always speak with your accountant or registered tax agent about GST calculations, eligibility and reporting for your specific circumstances.
What Is GST On Importation?
GST is a 10% tax on most goods, services and other items sold or consumed in Australia. When you import goods, GST generally applies when the goods are brought into Australia (unless a specific exemption applies). GST on importation helps ensure imported goods are taxed in a similar way to locally supplied goods.
At a high level:
- GST usually applies to consignments over $1,000 at the border (assessed during customs clearance).
- Since 1 July 2018, GST also applies to most low value goods (A$1,000 or less) sold to Australian consumers by overseas suppliers - but for these sub-$1,000 purchases, GST is generally collected by the registered overseas supplier, online marketplace or redeliverer at checkout, not at the border.
- If you’re registered for GST and the goods are used in your business, you can usually claim an input tax credit - provided your records and import documents are in order.
This means GST will likely be part of your import process whether you’re a wholesaler bringing in inventory or a small online store buying samples or equipment from abroad.
When Does GST Apply To Imported Goods?
Consignments Over A$1,000 (Typical Business Imports)
- For consignments with a customs value over A$1,000, GST is typically assessed at the time of import by Australian Border Force (ABF) and the Department of Home Affairs.
- You’ll lodge an import declaration and pay any customs duty, import processing charges and GST before the goods are released (your customs broker often handles this on your behalf).
- If you’re GST-registered and the goods are acquired for a creditable business purpose, you can usually claim an input tax credit in your BAS for the GST paid on importation.
Low Value Goods (A$1,000 Or Less) Sold To Australians
- For low value imported goods, the GST rules operate differently. If the overseas seller, online marketplace or redeliverer is registered for GST in Australia (because they meet the A$75,000 registration threshold for supplies to Australia), they generally collect 10% GST at checkout and remit it to the ATO.
- In these cases, GST is usually not collected at the border on arrival for those low value consignments (tobacco and alcohol are treated separately and different rules apply).
- If GST wasn’t charged at the point of sale and the goods aren’t covered by the low value rules (or an exception applies), speak with your broker about what will occur at import - your specific facts matter.
Special Cases And Exemptions
- Certain goods can be GST-free (for example, some medical aids, basic food in specific circumstances, or goods covered by particular concessions). There are also scenarios where goods are brought in temporarily and re-exported.
- Eligibility is technical and documentation-sensitive, so confirm with your customs broker and accountant before you ship.
How Is Import GST Calculated And Paid?
The Value Of The Taxable Importation
For imports assessed at the border, GST is calculated on the “value of the taxable importation.” In simple terms, this is generally made up of:
- the customs value of the goods (often related to the purchase price)
- plus any customs duty payable
- plus the cost of transporting and insuring the goods to the place of importation
GST is then 10% of that total. Depending on the product, other taxes (such as Wine Equalisation Tax) can also be relevant.
How You’ll Typically Pay
- At the border: Your customs broker or freight forwarder will usually lodge the import declaration and arrange payment of customs duty, processing charges and GST before release.
- At checkout for low value goods: If the overseas supplier or marketplace is GST-registered, they’ll add 10% GST to the price and remit it to the ATO. Your invoice should reflect the GST collected.
- Via monthly BAS (deferred scheme): Some businesses may be eligible to defer payment of import GST and instead report it on their monthly BAS under a deferred GST arrangement. Ask your accountant whether you meet the criteria and whether it suits your cash flow.
If you’re GST-registered and the goods are for use in your business, you can usually claim the import GST back as an input tax credit. To do that, you’ll need strong records - tax invoices (where relevant), import declarations, customs payment evidence and transport documents. Keep everything organised in case the ATO reviews your BAS.
Many importers will also interact with the formal import declaration - for example, an Import Declaration (N10) - so your customs paperwork aligns with your BAS claims. Your broker can guide the declarations, and your accountant can help reconcile the numbers.
Practical Steps To Stay Compliant
- Confirm your GST position: Speak with your accountant about whether you need to register for GST and whether a deferred GST arrangement makes sense for your cash flow.
- Map your supply chain: Clarify who is selling to you (overseas supplier vs marketplace), the typical consignment values, and who will collect GST (supplier at checkout vs border).
- Use a capable broker: A reputable customs broker can help you classify goods, prepare the correct import declaration, and ensure duty and GST are paid correctly.
- Tighten your contracts: If your business depends on overseas vendors, use a clear Supply Agreement to set quality, delivery, risk transfer and invoicing terms. Align your commercial terms with your GST and logistics processes.
- Standardise your terms: If you resell the imported goods, set firm Terms of Trade with your customers so everyone understands pricing, delivery, title transfer and GST treatment.
- Get the paperwork right: Keep invoices, purchase orders, import declarations, payment evidence and shipping documents. Make sure business names and ABNs are consistent across records.
- Review your eCommerce setup: If you sell online, ensure your Online Shop Terms and Conditions, Privacy Policy and Website Terms and Conditions match your actual sales and tax processes.
Common Pitfalls (And How To Avoid Them)
Assuming GST On Sub-$1,000 Consignments Is Collected At The Border
Under the low value goods regime, GST for sub-$1,000 goods sold to Australian consumers is typically collected by the GST-registered overseas supplier, marketplace or redeliverer at the point of sale. Don’t plan your costs on the assumption border agencies will add GST for low value parcels - check your invoice and supplier status upfront.
Undervaluing Goods To Reduce GST
Intentionally undervaluing consignments, misclassifying goods or splitting shipments to avoid thresholds is unlawful and can lead to penalties, delays or seizure of goods. Work with your broker to correctly value and classify shipments from the outset.
Missing Documentation To Support BAS Credits
If you claim input tax credits for import GST, you’ll need the records to match. Ensure your import declaration (e.g. an N10), supplier invoice and payment evidence align with your BAS period.
Not Aligning Contracts With Logistics Reality
If your contracts are silent on when risk and title pass, you can get stuck with disputes around damage in transit or who pays duties and taxes. Use a tailored Supply Agreement to allocate responsibility clearly (e.g. Incoterms, delivery terms, title and risk transfer).
eCommerce Policies That Don’t Match Practice
If you’re collecting customer data and selling online, make sure your Privacy Policy and Website Terms and Conditions reflect how you actually sell, ship, charge taxes, handle refunds and communicate with customers.
Overlooking Brand Protection When Importing Branded Goods
If you’re building your own label or importing branded products, consider registering your brand as a trade mark to reduce the risk of copycats and make enforcement easier if counterfeit goods surface in the market.
What Legal Documents Will Help Your Importing Business?
The right contracts and policies won’t calculate GST for you, but they will reduce disputes, clarify who is responsible for what, and keep your online store compliant.
- Supply Agreement: Sets product specs, quality checks, delivery terms, Incoterms, pricing, invoicing and remedies with your overseas vendor. A robust Supply Agreement can prevent expensive miscommunications across borders.
- Terms of Trade: Standard terms for selling to your wholesale or retail customers in Australia. Clear Terms of Trade cover price, delivery, title and risk transfer, returns, warranties and GST.
- Online Shop Terms and Conditions: If you sell online, your Online Shop Terms and Conditions should explain pricing (including tax), shipping, returns and consumer guarantees.
- Privacy Policy: If you collect personal information (orders, enquiries, marketing lists), you’ll need a compliant Privacy Policy that reflects your data practices.
- Website Terms and Conditions: Your Website Terms and Conditions set acceptable use, IP ownership and liability limits for your site or app.
- Non-Disclosure Agreement (NDA): Use an NDA if you share product designs, pricing or supplier details with third parties while you negotiate.
- Trade Mark Registration: Protect your brand name and logo with a trade mark, especially if you’re importing your own label or private brand products.
You may not need every document on day one, but most importers benefit from at least a supply-side agreement and customer-facing terms. The key is to tailor them to how your business actually buys, imports and sells.
Key Takeaways
- GST on importation usually applies when goods enter Australia; for low value goods sold to Australians, GST is generally collected by the registered overseas supplier or marketplace at checkout.
- For border-assessed imports, GST is 10% of the value of the taxable importation (customs value plus duty and transport/insurance), paid before release or via a deferred GST arrangement if eligible.
- If you’re GST-registered and the goods are for your business, you can usually claim import GST back as an input tax credit - accurate records and import declarations are critical.
- Avoid common pitfalls like undervaluing goods, relying on border collection for low value parcels, or having contracts that don’t match your logistics and tax processes.
- Protect your position with clear supplier contracts, customer terms, online policies and brand protection, including a Supply Agreement, Terms of Trade, Privacy Policy and trade mark registration.
- Tax settings can be complex - confirm your GST approach with your accountant and work with a capable customs broker to keep shipments moving smoothly.
If you would like a consultation on handling GST on importation for your business (and the legal documents that support your supply chain), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
