A guide to Australian goods and services tax (GST)
Global shipping can be a tricky business. Every country has its own rules and regulations on what can and can’t be imported, the taxes and duties that are owed and the companies that can or can’t ship to them. At forward2me we’re experts in global shipping, particularly for shipping from the UK to countries around the world.
We’re experts on shipping goods from the UK to Australia and this guide will cover everything you need to know about the process and Australia’s Goods and Services Tax (GST).
What is the goods and services tax (GST)
Australia’s GST is a broad-based tax of 10% that’s applied to all goods and services that are sold within Australia. It’s very similar to the UK’s value added tax (VAT) in that the money made from the tax is then used to pay for public services and infrastructure.
Businesses are responsible for collecting the goods and service taxes for the government when they sell their products and services, then they pay that to the Australian Tax Office in turn. GST is generally incorporated into the price of the items or services that businesses provide.
The Australian Government introduced new laws that came into effect on 1 July 2018 that require what they call re-deliverers to collect Goods and Services Tax (GST) on low-value goods imported to Australia. This means we are obliged to collect GST on goods with a value of AUD $1,000 or less. The GST we collect is paid to the Australian Tax Office (ATO).
Goods with a value greater than AUD $1,000 will be taxed at the border by Australian Customs as they have always been in the past. In this instance we do not collect any GST on the value of the goods.
What does GST apply to?
GST applies to the sale of most goods and services, while there are exemptions. In terms of goods, they generally fall into the following categories:
- The goods are delivered to or made available within Australia to the buyer
- The goods are being removed from Australia
- The goods are being brought into Australia
The supply of low value imported goods now takes GST into account, after it was introduced in 2018. For forward2me that means that it can apply to imports.
Are imports included in GST?
The short answer is that yes, imports are included in GST. As of July 2018, GST was introduced by the Australian government to low value imports.
This applies to all imported goods that are under $1,000 in value. In terms of what this means for forward2me it’s as simple as this:
- forward2me, as the importer, is responsible for registering and collecting GST on behalf of the Australian Tax Office
- Shipments with a value under $1,000 will be subject to GST. This includes individual items or else the cost of any items that have been collated. I.e. if an order is grouped and the overall cost is less than $1,000
- While forward2me is responsible for the registering and collecting of GST, it’s the buyer who is responsible for paying it
Any shipments where the value is over $1,000, whether it’s a single item or a grouped order, do not require the business to pick up the GST. In these instances, the tax is picked up at the border and it will be on the buyer to pick these up. Other items that fall within this restriction, regardless of value include:
- Tobacco products
- Alcohol products
What products and services are exempt from GST?
While the Australian goods and services tax covers a wide range of items, there are a number of things that are exempt. While a number of these aren’t relevant for importation as they cover services rather than goods, exempted items include:
- Most basic food items
- Some menstrual products
- Some medical equipment
- Some medicines
- Precious metals
- Some telecom items
While these are all included in the list of exemptions supplied by the Australian government, it’s worth double-checking. It’s also worth noting that a number of items that may fall under this category are ones that are on the forward2me prohibited items list. Always check these lists for dangerous goods and prohibited items before creating an order.
How is GST calculated and charged?
GST is calculated as 10% of the value of any applicable goods, plus any shipping or service charges.
In terms of GST for imported low-value goods, GST must be collected on the shipping cost from the retailer to forward2me and the international shipping cost from forward2me to Australia. The GST will be added to your shipping invoice as long as the order is $1,000 or below. If it’s above $1,000 you will have to pick up the GST at the border.
Why must we ask you for your purchase invoices?
We are required by the ATO to collect copies of the original purchase invoices or receipts for your goods so that we can prove that we charged you the right amount of GST.
We ask you to upload scans of your invoices as soon as you have them. It typically takes one business day for us to process the invoices and only then can we accept your instructions, ship, take payment and dispatch the goods.
Are Australian GST registered businesses exempt from the GST charge?
Customers who provide us with a valid Australian Business Number (ABN) and state that they are registered for GST will not be charged GST.
However at this time we are still implementing the functionality in our system to allow for this. It is coming soon, but until then we ask you to claim back the GST charge on your GST return.
Australian External Territories
Christmas Island, the Cocos (Keeling) Islands and Norfolk Island are Australian external territories and they are not considered part of Australia for GST purposes.
Shop online in the UK and ship to Australia with forward2me
Shop with confidence online at UK providers and have your goods shipped to Australia with forward2me. Sign up today to get your free UK forwarding address and start shopping on the UK’s best sites.
You can shop with confidence at any UK retailer, including Amazon UK and have it shipped to Australia. To find out more, and get a quick estimate on how much it costs to ship from the UK to Australia, check out our Australia pricing page.
Access to our shipping address is free and you only have to pay for the courier from our warehouse to your own address. We can even hold orders for a short time and collate several into one larger order. Check the how it works page for more information.