Sunday, Feb. 26, 2017

Applying GST to low value goods imported by consumers

By Paul Zalai - FTA · November 24, 2016

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Freight & Trade Alliance (FTA) yesterday engaged with representatives from Treasury, the Department of Immigration and Border Protection (DIBP) and the Australian Taxation Office (ATO) in relation to the 2016-17 Budget measure to apply the GST to low value goods imported by consumers.
The draft legislation aims to treat low value goods imported by consumers in Australia with an equivalent GST treatment to goods that are sourced domestically.
The changes in a ‘nutshell’  

  • If passed, the legislation will take effect from 1 July 2017, meaning that overseas vendors, electronic distribution platforms and goods forwarders will have to account for GST on sales of low value goods to consumers in Australia if they have GST turnover of $75,000 or more.
  • Do not be alarmed by the term ‘goods forwarders’ as this does NOT refer to international freight forwarders (refer to the Explanatory Memorandum for more detail).
  • The vendor collection model will provide a simplified registration option for overseas entities responsible for payment only of GST with the ATO to issue a unique Vendor Registration Number (VRN).
  • An Integrated Cargo System (ICS) enhancement will be provided for Self Assessed Clearance (SAC) Declarations that do not include the capacity to pay GST (including the Sea Cargo Report SAC and Air Cargo report SAC) to capture two new data items at the header level. 
  • The new data items will be the VRN (or ABN if the overseas business chooses to register for an ABN instead of a VRN) and the recipient ABN (to be used if a purchaser in Australia quotes an ABN to the overseas vendor to seek a GST exemption). Similarly, a GST exemption code indicating GST has already been paid will be provided for use at the line level on a Full Import Declaration (FID) and some SACs where GST can be payable. A VRN field will also be added to the FID for use in exemption circumstances.
  • Compliance on vendor reporting will be managed by the ATO with the Australian Border Force to continue to manage accuracy of SACs.

Where to from here?

  • We encourage FTA members and importers of low value consignments to familiarise themselves with the exposure draft legislation and associated explanatory material.
  • The closing date for submission is 2 December 2016. To have your views incorporated into the FTA submission, please send comments to by this Friday, 25 November 2016.
  • FTA has given a commitment to work collaboratively with the government agencies on the legislative reform processes through to the target 1 July 2017 implementation.

As a part of this process, DIBP and ATO will produce regular updates / notices and the ATO will also provide a Law Companion Guide with further detail. FTA will maintain a Frequently Asked Questions section on our web site to underpin a formal training program which will be available in the new year – enquiries can be directed to

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