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GST on low value goods

GST on low value goods Australia will be the first country to introduce a GST on low value goods purchased from overseas retailers, but this might prove complicated for businesses who supply or process foreign goods into Australia.

From 1 July 2018, GST will be included on goods valued AU$1,000 and under supplied to Australian consumers by overseas retailers. The Australian Government has declared this tax will be collected by the vendor at the time of sale.

A number of provisions will affect how and when this GST is collected, so it is important for businesses to have an awareness of their supply chain and where it is appropriate for the tax to be applied.

If you are a supplier, online marketplace or redeliverer who transacts low value goods into Australia, it is recommended you:

- Identify supplies of low value goods expected to be imported to Australian consumers
- Assess pricing changes required for imposition of GST
- Review agreements to ensure appropriate GST clauses are included
- Update customer communications
- Check that systems can account for GST on relevant sales from 1 July 2018
- Consider how prices and GST will be displayed
- Implement processes to identify B2B supplies separately from B2C and low value supplies separately from high value supplies

Goods will also be included in a supplier’s GST turnover, which may trigger a need to register for GST in Australia if they now anticipate exceeding the AU$75,000 turnover threshold.

In Sybiz Vision, businesses can manage the complexities of GST obligations and customise their sales process, whether an item is sold internationally or domestically.

You can find out how to set up and apply new tax codes in the Sybiz Vision help file, or if you require further assistance you can consult your Business Partner to discuss your business processes.

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