Private ruling: GST and low value importations
Published: November 2012

Ruling: Q1: Is an Australian company (you) making a taxable importation when it purchases goods (with a total value less than AUD$1000 for each order) multiple times over a course of a year or several years from the same supplier and imports the goods into Australia? | A1: No, the importation of the goods shipped on different dates is not a taxable importation where each consignment is AUD$1000 or less, even if the cumulative total amount of all the shipments over a course of a year or several years, will be more than AUD$1000.

Relevant facts and circumstances: You are a company in Australia that is registered for goods and services tax (GST). You will import certain equipment into Australia from time to time from an overseas supplier. The import will be via international post. Some of the importations will have values above AUD$1000, but others may be less than AUD$1000. You are aware that GST will be collected by the Australian Customs and Border Protection Service ('Customs') on importations with values above AUD$1000. You advise that Customs has verbally informed you that importation less than AUD$1000 are not subjected to customs duty or GST, and that Customs will not collect the GST. Customs will not amalgamate consignments unless they physically leave the overseas country the same day. Additional information received: The goods ordered from the overseas supplier are certain equipment. These goods are ordered from the supplier as needed to on-sell to your customers. You would estimate the required stock for a relevant period and place an order. The orders are not part of one single contract with the overseas supplier. You order the goods (stock) as and when needed for the business. The goods are sent to you via post. You had several shipments on different dates, all under AUD$1000 each. This private ruling relates to these low value imports. You provided an example of an order with a value of approximately AUD$XXX, and the order came in one box with about XX different products. You are aware that when you on-sell the goods to your customers in Australia, the supply is treated as a taxable supply.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999, Section 13-5

Reasons for decision: Summary: An entity must pay the GST payable on any taxable importation that it makes. Subsection 13-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states: 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. (* denotes a defined term under section 195-1 of the GST Act) All the requirements in subsection 13-5(1) of the GST Act must be satisfied to be a taxable importation. Where goods are entered for home consumption, the 'owner' of the goods must pay any customs duty to the Australian Customs and Border Protection Service (Customs) at the time of entry of the goods. There are certain situations where Customs entries are not required. The most common are 'low value importations' - goods imported through Australia Post or other than by post that have values not exceeding specified limits (paragraph 25 of Goods and Services Tax Ruling GSTR 2003/15) Section 68 of the Customs Act 1901 (Customs Act) requires the entry of imported goods into home consumption or warehousing. However, paragraphs (e) and (f) of subsection 68(1) of the Customs Act provides that this section does not apply where: (e) goods, other than prescribed goods: i. that are included in a consignment consigned through the Post Office by one person to another; and ii. that have a value not exceeding $1,000 or such other amount as is prescribed; and (f) goods, other than prescribed goods: i. that are included in a consignment consigned otherwise than by post by one person to another; and ii. that are all transported to Australia in the same ship or aircraft; and iii. that have a value not exceeding $250 or such other amount as is prescribed; … For subparagraph 68(1)(f)(iii) of the Customs Act, regulation 31AC of the Customs Regulations 1926 prescribed an amount of $1000. Where multiple packages arrive in Australia to the same consignee sent from a single consignor overseas on the same ship or aircraft, the value of all packages may be combined for duty and tax assessment purposes. For further information on the definition of 'consignment', refer to the Australian Customs Notice No. 2006/59 which is available at the Customs website at www.customs.gov.au. You have advised that you import the equipment into Australia which is purchased from an overseas supplier. The importations will be via international post. These goods are ordered from the same supplier to on-supply to your customers. The multiple orders are not part of one single contract with the overseas supplier, but are ordered as and when needed for your business. Although over the course of a year or several years, the cumulative total amount of all the shipments will be more than AUD$1000, each shipment on different dates made is/will have a value of AUD$1000 or less. You are aware that GST will be collected by Customs on importations with values above AUD$1000. Accordingly, on the basis of these facts, where each 'consignment' is AUD$1000 or less, the importations of the goods shipped on different dates are not taxable importations even if the cumulative total amount of all the shipments over a course of a year or several years, will be more than AUD$1000.

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