Import GST explained: the A$1,000 line that changes everything

Almost every GST mistake we see from Australian importers comes back to one thing: not knowing which side of the A$1,000 line a shipment sits on, and assuming the rules are the same on both sides. They are not.

This is general information, not tax advice for your situation. Every business is different — talk to your accountant or a registered tax agent before acting on it.

Below A$1,000: the seller collects

Since 1 July 2018, GST applies to low value imported goods — consignments valued at A$1,000 or less. The important part is who collects it. Not the border. The supplier, the electronic distribution platform (think Amazon, eBay), or the re-deliverer charges the 10% at the point of sale and remits it to the ATO.

For a dropshipping model this is the whole ballgame. If you are the one selling to the Australian customer and your turnover crosses the registration threshold, the obligation to register and remit is yours — even if you have no Australian entity and never touch the goods.

There is no customs duty and no import processing charge at the border for these consignments. They clear as low value goods.

Above A$1,000: the border collects

Once a consignment is valued above A$1,000, a full import declaration is required. Duty (if any) and GST are both payable at the border, plus an import processing charge.

The GST is 10% of the value of the taxable importation, and this is where the arithmetic bites. VoTI is not your invoice total. It is:

• the customs value of the goods, plus
• any customs duty payable, plus
• the cost of international transport and insurance to the place of consignment in Australia

So if you paid the factory A$40,000 FOB and freight and insurance cost A$4,000, your GST is calculated on A$44,000 — not A$40,000. That is an extra A$400 you did not budget for, on one container.

The rule that catches people: splitting consignments

If you are thinking “I will just split the order into four consignments of A$900 each” — Australian Border Force has seen it. Consignments that are artificially split to get under the threshold can be treated as a single consignment. It is not a loophole, it is a red flag.

Deferred GST: the scheme worth knowing about

Here is the one that genuinely helps cash flow, and that a surprising number of small importers have never had explained to them.

Under the Deferred GST Scheme, an approved importer defers the GST payable at the border and accounts for it on their next BAS instead — where it shows as both a liability and, usually, an equivalent input tax credit. Net cash effect: close to nil.

The catch is the eligibility conditions. Broadly, you need to be registered for GST, hold an ABN, lodge your BAS monthly and electronically, pay electronically, and be up to date with your ATO obligations. That monthly-lodgement requirement is the trade-off — more frequent reporting in exchange for not fronting the GST at the border.

For an importer bringing in a container every month, this is often the difference between comfortable and stretched. Run the numbers with your accountant.

Claiming the credit

If you are registered for GST and the goods are for your business, the import GST you pay is generally claimable as an input tax credit on your BAS. Two conditions people trip over:

You must be the importer. If your freight forwarder or a customs broker is named as the importer on the declaration rather than your entity, the credit may not be yours to claim.

You need the documentation. Keep the import declaration, the commercial invoice and the evidence of payment. “The forwarder has it somewhere” is not a record-keeping system.

The three-item checklist

Before your next shipment leaves China:

1. Confirm which side of the A$1,000 line each consignment sits on, and who is collecting the GST
2. Check the entity named as importer on the declaration is the entity that will claim the credit
3. If you import regularly, ask your accountant whether deferred GST is worth the move to monthly BAS

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ExploreChina Pro is run by a CPA and Registered Tax Agent, which means the compliance side of your import is not an afterthought here. Book a free 30-minute chat if you want to talk through how your shipments are structured.