Private ruling: GST and importation of a second-hand yacht
Published: July 2012

Ruling: Q1: Under Division 13 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), will your importation of a yacht to Australia be subject to GST? Decision Yes, your importation of a yacht to Australia will be subject to GST.

Relevant facts and circumstances: You are an employee working for another entity. You are not registered for GST. You intend to go overseas, purchase a yacht and sail back to Australia in the yacht. You will import the yacht for private use. You have checked the Customs website for consequences of importation of a yacht to Australia. The website states that you have to pay customs duty at the rate of 5% and GST at the rate of 10%.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 - Section 13-5 Reasons for the decision | Division 13 of the GST Act defines taxable importations, states who is liable for the GST and describes how to work out the GST on importations. This division applies whether or not you are registered for GST. | Section 13-1 of the GST Act states that GST is payable on taxable importations. | Subsection 13-5(1) of the GST Act provides that: | You make a taxable importation if: | · goods are imported; and | · you enter the goods for home consumption within the meaning of the Customs Act 1901 . However, the importation is not a taxable importation to the extent that it is a non-taxable importation. | There is no registration requirement for taxable importations and the importer need not be carrying on an enterprise. | You will import the yacht by sailing it into Australia and satisfy paragraph 13-5(1)(a) of the GST Act. Paragraph 95 of Goods and Services Tax Ruling GSTR 2003/15 - Importation of Goods into Australia (GSTR 2003/15) states: | 95. The second requirement for a taxable importation is that goods are entered for home consumption. This is achieved by the lodgement of an entry of imported goods for home consumption with Customs. An entry for home consumption is the specified format in which Customs requires information to be provided in respect of imported goods. When it is processed and approved, the entry for home consumption allows the goods to be removed from Customs control. Imported goods can be entered for home consumption, entered for warehousing or entered for transhipment, within the meaning of the Customs Act. Only entries for home consumption are relevant for the purposes of section 13-5. | As you will import the yacht for your own use, you will have to lodge the relevant forms with Customs for home consumption of the yacht. Once the yacht is removed from Customs control after paying the relevant taxes and duties, the yacht will be considered as having entered for home consumption. At that point, you will satisfy paragraph 13-5(1)(b) of the GST Act. You should refer to the Customs to ascertain the exact procedures involved in entering the yacht for home consumption. | Paragraphs 14 - 16 of GSTR 2003/15 state: | 14. The entity that makes the taxable importation must pay the GST payable on the taxable importation. | 15. The amount of GST is 10% of the value of the taxable importation. The value of the taxable importation is essentially the value of the goods plus the cost of bringing the goods to Australia, including insurance, plus customs duty and wine tax (if any). | 16. GST on a taxable importation is usually paid to the Australian Customs Service ('Customs') before goods are released from Customs control….. | You will be required to pay GST at the rate of 10% of the importation value of the yacht. The importation value of the yacht will be determined by Customs.


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