Goods

1
Goods Services Tax

• A guide to the practicalities of
• ANTS
• (A New Tax System)

2
Content

• This presentation will cover
• Taxable Supplies vs Taxable Importations
• The GST treatment of imports and exports
• Importations through agents
• Reverse Charge supplies non-residents
• Transport and Insurance costs
• WET and LCT
• Tourist Refund Scheme

3
Taxable Supplies

• A supply is a taxable supply if
• It is made for consideration and
• It is made in the course of carrying on an
  enterprise and
• It is connected with Australia and
• The supplier is registered for GST or required to
  be registered.
• However, the supply is not a taxable supply to
  the extent that it is GST-free or input taxed

4
Supplies connected with Australia

• supplies of goods wholly within Australia
• supplies of goods from Australia
• supplies of goods to Australia if the supplier
• imports the goods into Australia or
• installs or assembles the goods in
  Australia.
• supplies of real property located in Australia
• supplies of anything else if
• the thing is done in Australia or
• the supplier makes the supply through an
  enterprise
• that the supplier carries on in
  Australia.

5
Input Taxed Supplies

• Financial Supplies
• Residential rent
• Residential premises
• Precious metals

6
GST-free Supplies

• GST-free supplies include
• Food
• Health
• Education
• Child care
• Exports of goods
• Transport and related matters
• Supplies through inwards duty free shops

7
Transport and Related Matters

• Transport to or from Australia
• Transport of goods within Australia
• Insurance
• Arranging Transport

8
Taxable Importations include

• importations into Australia of goods that are
  entered for home consumption and
• other importations for which the Customs Act does
  not require an entry and
• goods sold at inwards duty free shops.

9
Non Taxable Importations

• Goods covered by certain items in Schedule 4 to
  the Customs Tariff Act 1995
• Importations of ship and aircraft stores within
  the meaning of s130C of the Customs Act
• Goods imported or purchased by overseas
  travellers and are covered by item 15 to Schedule
  4 to the Customs Tariff Act 1995.
• Goods that would have been GST-free supplies or
  input taxed if they had been a supply.

10
Calculation of GST on Imports

• GST is calculated as 10 of the
• Value of the Taxable Importation
• VoTI is the sum of
• The customs value of the goods and
• The amount paid or payable to
• transport the goods to Australia and
• insure the goods for that transport and
• any customs duty payable.

11
Payment of GST on Importations

• GST is payable
• At the same time, at the same place, and in the
  same manner as customs duty is payable on the
  goods in question (or would be payable if the
  goods were subject to customs duty) or
• Within such further time specified in the
  regulations, and at the place and manner
  specified in the regulations.

12

HOW GST WORKS IMPORTED GOODS
Customs Value 870 Duty 30 Freight/Insurance
100
Importer Value of Taxable Importation 1000
Importer sells to retailer
Retailer sells to final customer
Final Customer
1650 incl. 150 tax
2750 incl. 250 tax
100 GST payable 100 GST paid
150 tax collected 100 credit claimed 50 GST
remitted
250 tax collected 150 credit claimed 100 GST
remitted
250 GST paid
Australian Taxation Office Total GST 250
Customs
13

IMPORTED GOODS Delivered Duty Unpaid
Customs Value 870 Duty 30 Freight/Insurance
100
Exporter sells DDU Value of Taxable Importation 1
000
Broker clears in Importers name, GST to
Importers account
Importer sells to retailer
Final Customer
1650 incl. 150 tax
2750 incl. 250 tax
Retailer sells to Final Customer
150 tax collected 100 credit claimed by
importer 50 GST remitted
100 GST payable 100 GST paid
250 tax collected 150 credit claimed 100 GST
remitted
250 GST paid
Australian Taxation Office Total GST 250
Customs
14

IMPORTED GOODS REVERSE CHARGE ON SUPPLIES S83-5
ANTS(GST)
Customs Value 870 Duty 30 Freight/Insurance
100
Exporter sells DDP Value of Taxable Importation 1
000
Broker clears in Importers name, GST to
Importers account
Importer sells to retailer
Final Customer
1650 incl. 150 tax
2750 incl. 250 tax
Retailer sells to Final Customer
150 tax collected 100 credit claimed by
importer 50 GST remitted
100 GST payable 100 GST paid
250 tax collected 150 credit claimed 100 GST
remitted
250 GST paid
Australian Taxation Office Total GST 250
Customs
15
Entry of goods

• A supply of goods where the goods are exported is
  GST-free, including
• goods - general
• goods that are to be consumed on international
  flights or voyages
• goods used to repair, renovate, modify or treat
  other goods
• goods exported by travellers as accompanied
  baggage

16
Exports

• A supply of goods where the goods are exported is
  GST-free, including
• goods - general
• goods that are to be consumed on international
  flights or voyages
• goods used to repair, renovate, modify or treat
  other goods
• goods exported by travellers as accompanied
  baggage

17
HOW GST WORKS EXPORT SALE
Timber Merchant
Furniture Maker
Furniture Retailer
Overseas Customer
1100 incl. 100 tax
1650 incl. 150 tax
2500 no tax
100 tax collected 100 GST remitted
150 tax collected 100 credit claimed 50 GST
remitted
nil tax collected 150 credit claimed 150 GST
credit
Nil GST paid
Australian Taxation Office Total GST nil
18
Australian Business Number

• Tax Commissioner is the Registrar of the
  Australian Business Register
• Objective is to make it easier for business to
  deal with government - single window concept
• entitlement to registration if entity is a
  company or an entity carrying on an enterprise in
  Australia

19
Wine Equalisation Tax

• Coverage
• Application
• Calculation
• Treatment at importation

20
Luxury Car Tax

• Coverage
• Calculation
• Application
• Treatment at importation

21
Tourist Refund Scheme

• Design
• Minimal Customs involvement
• Relationship with other schemes

22
Questions?

• aimed at practical applications of GST
  commercially
• allocation of composite charges
• inclusion of specific costs into VoTI
• incidental application in any import transaction
• GST on Exports
• GST exemptions
• exemption codes on import entry
• LCT/WET applications