GST on imported electronics - Page 1
Forum section: electronics / general

author: VK3DRB
author_rank: Super Contributor
timestamp: October 29, 2021, 07:13:45 am
content: Hi.I ordered some electronics parts costing $70.90 for testing and evaluation from Digikey. It is only recently Digikey has asked when you order electronic parts, "Are these goods to be on-sold to someone else?" I was not charged the $7.09 GST (ie: 10%) as these were not originally intended to be on-sold. However later on I did charge the client, so I needed to pay GST. I contacted Digikey who subsequently charged me the GST. Fine, no problem.My understanding is if I import electronic goods under $1000 for the business, I don't need pay GST; but if I on-sell the goods, GST is payable. (So, what happens if I on-sell half of the goods, eh?) But if I am a consumer, GST is payable in all cases. So if I import a $900 oscilloscope it can be completely GST free if it is used solely for the business. If it is used for both business and personal use, that would complicate things.I did ask the Australian Taxation Office for clarification on this GST. The bloke at the ATO seems confused about the GST. He literally said if the foreign company does not have an office or registered business in Australia, GST is not payable. I believe he is wrong... Wrong... WRONG!Maybe other Aussies here know more than the ATO and I on GST when importing electronics for a business. Am I right, or is this bloke from the ATO right?Admittedly, Australia has the reputedly the world's most complex taxation system thanks to successive bureaucratic governments making a bigger mess whenever they try to simplify things. As they say, you can't have your cake and eat it too! This famous interview about the GST on a birthday cake was the nail in the coffin regarding the interviewee's hope as becoming Prime Minister...

author: johnboxall
author_rank: Unknown
timestamp: October 29, 2021, 07:20:52 am
content: If you import items for any purpose under A$1000, no extra fees. If it's over AU$1000, you pay the fees, duty, etc.You sell anything to a customer in Australia - you charge them GST and pay that to the ATO.However- The ATO has started requiring foreign companies and marketplaces who sell to Australia to voluntarily collect and remit GST. Some businesses abroad are doing this now. For example, if you buy something from Aliexpress, they're now charging GST. As a business with an ABN you can claim that GST back as an input tax credit.

author: jeremy
author_rank: Super Contributor
timestamp: October 29, 2021, 08:09:12 am
content: For digikey, I just always pay them GST and then claim it back. If it’s over $1000 you get hit for it (plus about $80 for clearance) by the logistics carrier. Digikey use DAP incoterms.Mouser is different though, they ship their packages with DDP incoterms. So you only ever pay GST to mouser and then they cover the duties/taxes (even over $1000). Worth keeping in mind if you are ever doing a big order. I personally always try to do my big orders through mouser so I don’t have to deal with the courier nonsense (or directly pay the clearance fee). Never had a problem with the mouser/DHL combo in this regard.Note: I have no idea if this applies outside Australia.

author: Ed.Kloonk
author_rank: Super Contributor
timestamp: October 29, 2021, 09:34:50 am
content: Quote from: VK3DRB on October 29, 2021, 07:13:45 amYou need to get a ruling. It has to be in writing from the tax office. Phone calls to/from the tax office won't cut it if they go though you.

author: Someone
author_rank: Super Contributor
timestamp: October 29, 2021, 11:47:58 am
content: You seem to have it back to frontQuote from: VK3DRB on October 29, 2021, 07:13:45 amRegardless of where you obtained the goods you need to collect GST on a sale (unless in a GST exempt situation....). A scope bought for a business is not GST free, any GST paid becomes a credit:https://www.ato.gov.au/business/gst/claiming-gst-credits/The $1000 threshold for low value imports applies in fewer and fewer situations since 2018 when the government required offshore businesses and platforms to start collecting GST.Since you don't seem to understand the basics its likely you are an individual and not registered for GST (you're in a world of hurt if you are registered and cant do these basics) which makes it a GST exempt sale so you can't and must not collect GST on sales.https://www.ato.gov.au/Business/Starting-your-own-business/Before-you-get-started/Are-you-in-business-/

author: jeremy
author_rank: Super Contributor
timestamp: October 29, 2021, 11:53:02 am
content: To be fair, some businesses will sell you items as GST-free if they have an ABN on file (ex: digikey and mouser). Though to be honest I have never used this (I would rather just claim it on the BAS).

author: Shock
author_rank: Super Contributor
timestamp: October 30, 2021, 06:52:09 am
content: Not a tax advisor but aren't business importation gst and duties just mandatory? Since they made the consumer law change large business overseas have to charge gst selling to Australians (including below $1000). Best to my knowledge there was never a duty or tax obligition free under $1000 for business.However if you buy something overseas and arrange the importation yourself under $1000 and the foreign company thinks you are a domestic buyer or have no gst registration (i.e. they aren't big enough to) then no gst will be collected. When you import there is a declaration "is this for business etc". The shipper will either typically be registered and charge you or it's collected at our border electronically if anything is left owing. If you managed to dodge duties and tax you should be able to submit it after the fact, but of course avoidance doesn't override liability.If you use half those goods in your product it's fine as gst is based on the sale value (if you are gst registered). So you may collect more than you have paid. You pay other expenses with gst like services/utilities etc so they are credits. It just ends up being a way for government to skim a quick 10% profit from gst applicable goods that end up with a consumer. The other half of the goods can also later be sold and collecting gst on them still applies. If not and written off that is dealt with separately depending on circumstances.For consumers we aren't obligated on gifts or private transactions. What sucks is ebay slaps tax on everything including broken old secondhand goods (even if it's a gift). Then you get taxed on the shipping. Where all this falls over is many overseas companies can curtail the system (creative book keeping) and it's free easy money for them. Gov is happy though they just palmed off the tax collecting work to overseas business and don't care about cost of living.

author: VK3DRB
author_rank: Super Contributor
timestamp: October 31, 2021, 06:20:06 am
content: Quote from: Shock on October 30, 2021, 06:52:09 ameBay has a flag for used/new. Hence they should be able to handle this. I agree that companies should be charging a small percentage fee to collect GST on every transaction. As for cost of living, ever wondered why the cost of housing (mortgages, council rates etc) is not included in CPI? The real inflation is much higher that what is published, as is the unemployment rate.