GST on imported goods: how it's worked out, when it's paid and getting it back

How is GST on imports calculated?

The single most common surprise for new importers is that import GST is more than 10% of the supplier’s invoice. That’s because it’s calculated on a larger base, which the ABF calls the value of the taxable importation (often shortened to VoTI). It’s made up of:

1. the customs value of the imported goods,
2. plus any customs duty payable,
3. plus the amount paid or payable to transport the goods to Australia and insure them for that transport,
4. plus any wine equalisation tax, if the goods are wine.

GST is 10% of the total. The customs value is expressed in local currency using the exchange rate prevailing on the day the goods were exported, according to the ABF’s guidance on exchange rates.

Can you show a worked example?

Illustrative only.

Line	Amount
Customs value of goods	$40,000
Customs duty at an illustrative 5%	$2,000
International freight to Australia	$3,200
Cargo insurance	$200
Value of the taxable importation	$45,400
GST at 10%	$4,540

GST on the goods alone would have been $4,000. The extra $540 comes from GST on the duty, freight and insurance. On larger orders, the difference adds up — so it’s worth modelling properly in the landed cost calculator.

When do I have to pay it?

The ATO says GST on imported goods is generally payable before the goods are released. In practice, your customs broker lodges the import declaration, duty and GST are calculated, and the goods are cleared once they’re paid. That means the cash has to be available at the moment the container lands — often only weeks after you’ve paid the supplier’s balance.

If that timing is a squeeze, there are two ways to ease it: the ATO’s deferred GST scheme, if you’re eligible, and a funding facility that covers border costs along with the rest of the order. See funding duty and GST at the border. If you’d like to talk about the second option, a quick enquiry is the way in — no credit check to ask.

Who pays import GST?

The ATO notes that GST on taxable importations applies to businesses, organisations and private individuals, whether they’re registered for GST or not. The difference is on the way back: only a registered business importing for a creditable purpose can claim it as a credit.

How do I claim it back?

According to the ATO, a registered business importing goods for a creditable purpose can claim GST credits, provided it holds documentation showing the goods were imported and the GST was paid or deferred. For most importers, the broker’s entry details or import declaration summary is the key document. Make sure it reaches your bookkeeper so the credit is claimed on the right BAS.

Two points to watch:

• Who’s named as importer. Generally the business named as the importer on the declaration is the one that can claim. If a supplier or forwarder imports on your behalf, check the paperwork.
• Timing. The credit comes back when you lodge your BAS. For a quarterly lodger, that can be months after paying at the border.

What about goods worth $1,000 or less?

The ATO states that consignments with a customs value of $1,000 or less don’t have customs duty or GST payable at the time of import, except for alcoholic beverages and tobacco products. business.gov.au adds that most goods up to that value can be imported without a formal import declaration. Different rules apply when overseas sellers charge GST on low-value goods sold to consumers, but for business importers bringing in commercial quantities, the $1,000 threshold is quickly exceeded.

Is GST on imports part of my cost of goods?

For a GST-registered business that can claim the full credit, no — it’s a timing cost, not a margin cost. That’s why the landed cost per unit usually excludes it. It still matters for pricing indirectly: if you fund import GST for three months before the credit comes back, the cost of that funding is real. Our page on how to calculate landed cost explains how to treat each component.

How do free trade agreements and concessions affect GST?

Free trade agreements generally reduce or remove duty, not GST. But because duty is part of the value of the taxable importation, a lower duty rate also slightly reduces the GST. Some concession schemes go further: the ABF’s Tradex scheme provides an upfront exemption from customs duty and GST on goods imported for re-export or used as inputs to exported goods. See customs duty explained.

Illustrative example

Illustrative only. A bicycle-parts wholesaler lodges BAS quarterly and imports a container every six weeks. Each clearance carries around $7,000 of import GST. Because credits only come back after each quarter, up to three clearances’ worth — about $21,000 — can be tied up at once. The business talks to its accountant about moving to monthly lodgement and applying for deferred GST, which would remove most of that cash from each clearance.

Keep the border from holding up your stock

Import GST is recoverable, but it still has to be found on the day your goods clear. If that’s stretching you, start a Trade Loan enquiry. There’s no credit check to ask and no lead-selling — a real person reads your enquiry and calls you. Accurate details about your order sizes and how often you import help us suggest the right structure first time.