GST on Imported Goods and Services

An invoice from an overseas supplier usually shows no GST - and that is where the confusion starts. Some businesses assume imports are GST-free and claim nothing; others claim 1/11 of a foreign invoice that never contained GST. Both are wrong, and both show up quickly in a BAS review.

GST on imported goods

Goods imported into Australia are generally taxable importations. GST of 10% is calculated on the value of the taxable importation - broadly the customs value of the goods plus any customs duty plus the cost of international transport and insurance. This GST is collected at the border through the customs process, usually paid via your customs broker or freight forwarder, and it applies whether or not you are registered for GST.

For goods valued at $1,000 or less, the rules moved to the checkout: overseas sellers, platforms and re-deliverers with Australian sales of $75,000 or more a year are required to charge GST at the point of sale on these low value imported goods. If you are GST-registered and buying for business use, you can generally provide your ABN and confirm your registration so the overseas seller does not charge GST - otherwise you risk paying GST twice, once at checkout and potentially again through the import process, and unwinding that is painful.

GST on imported services and digital products

Overseas suppliers of services, software subscriptions and digital products are required to charge GST on sales to Australian consumers. Sales to GST-registered businesses buying for business use are generally not meant to carry this GST, which is why suppliers ask for your ABN. Separately, a reverse charge can apply, making the Australian recipient account for GST on imported services - broadly where the purchase is not fully creditable, such as businesses making input-taxed supplies. This area is technical, so treat any reverse charge position as one to confirm with your adviser.

How import GST credits work

If you are registered for GST and imported the goods for a creditable business purpose, you can generally claim the GST paid at the border as a credit on your BAS, like GST on a local purchase. Two practical points matter:

• The evidence is the import declaration, not the supplier invoice. The overseas invoice shows no GST; the customs import declaration and your broker's documents show the GST actually paid, and that is what supports the claim.
• The claim belongs to the importer of record. If your broker paid the GST on your behalf, it is still your credit - but if the goods were imported in someone else's name, the credit is theirs.

Businesses importing regularly can apply for the deferred GST scheme, which lets approved importers who lodge monthly BAS electronically defer the border GST to their BAS instead of paying it at the wharf - a genuine cash flow difference, though eligibility conditions apply.

What we commonly see go wrong

• Claiming 1/11 of an overseas invoice that contained no GST.
• Missing the credit for border GST because the broker's paperwork never reached the bookkeeper.
• Paying GST at checkout on low value goods despite being registered, then not noticing the double-up at the border.
• Coding overseas software subscriptions as GST-inclusive when no GST was charged.

When to get advice

Talk to your accountant before your first significant import, before applying for deferred GST, or if reverse charge might apply to services you buy from overseas. Import GST is mechanical once the paperwork flows are set up - most problems we see are bookkeeping plumbing, not tax law.

Can I claim GST credits based on the overseas supplier's invoice?

No - if the invoice shows no GST, there is no GST in it to claim. Your credit for imported goods is based on the GST shown on the customs import declaration and broker documents for GST actually paid at the border.

What is the deferred GST scheme?

An ATO scheme that lets approved importers defer paying import GST at the border and instead account for it on their BAS. It requires, among other conditions, lodging your BAS monthly and electronically - check the current ATO eligibility criteria.

Why does my overseas software supplier ask for my ABN?

Overseas suppliers must charge GST on sales of services and digital products to Australian consumers. Providing your ABN and confirming you are GST-registered tells them the sale is business-to-business, so GST generally should not be charged at the point of sale.