What is the difference between duty and GST on goods for Australia?

Duty is a tariff imposed by Australian Customs and Border Protection on goods imported to Australia. Duty is calculated on the Customs Value of the goods. The rate of duty to be imposed is based on the classification of the item in the Customs Tariff.

GST is a tax levied by the Australian Taxation Office (ATO). The ATO states that the “goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.”

GST, currently 10%, is calculated on the Customs Value of the goods, plus duty, plus transport and insurance combined. Wine Equalisation Tax (WET) may also be applicable if the imported goods are wine.

For further information on GST visit the Australian Taxation Office website.

How do you calculate duty and GST?

Duty Payable

Duty rates payable are determined by the tariff classification for your goods. The Customs Tariff Act 1995 (known as The Tariff) provides the tariff classifications, duty rates, interpretive rules and information on preference schemes, other concessions and exemptions that may apply to your goods. The Tariff is available at Customs and Border Protection counters or on the Customs and Border Protection website. Duty is payable on the Customs value of the goods.

GST Payable

GST applies to most imported goods, with a few exemptions. The main exemptions are for certain foodstuffs, some medical aids and imports that qualify for certain duty concessions. GST is applied at 10% of the value of the taxable importation (VoTI). Additional information is available from the Australian Taxation Office, Customs and Border Protection counters or on the Customs and Border Protection website.

Note: For imported goods the value of the taxable importation (VoTI) is the sum of:

• the customs value (CV)

• any duty payable

• the amount paid or payable to transport the goods to Australia and to insure the goods for that transport (T&I), and

• any Wine Equalisation Tax (WET) payable. Please refer to the below examples as to how to calculate duty and GST.

Wine equalisation tax (WET)

WET applies to the following alcoholic beverages:

• grape wine, including sparkling wine and fortified wine

• grape wine products such as marsala, vermouth, wine cocktails and creams

• other fruit wines and vegetable wines, including fortified fruit wines and vegetable wines

• cider (from apples) and perry (from pears), and

• mead and sake, including fortified mead.

 

WET for imported wine is calculated as:

• 29% of the purchase price at inwards duty free

OR for other importations:

• 29% of Customs value + Duty + International Transport and Insurance.

Luxury car tax (LCT)

LCT applies to motor vehicles (except motor cycles or similar road vehicles) with a Luxury Car value that exceeds the LCT threshold of A$60,316 (for 2013/14) that:

• are designed to carry a load of less than two tonnes and fewer than nine passengers, and

• have a Luxury Car value above the threshold.

 

The LCT rate is 33%, which commenced 1 July 2008, prior to that the rate was 25%.

LCT does not apply to fuel efficient cars below the fuel efficient luxury car threshold of A$75,375 for the 2013-2014 financial year.

The definition of a road vehicle for LCT purposes includes limousines regardless of the passenger carrying capacity. The value above which the LCT becomes payable is the LCT threshold. It is important to note that under current ATO legislation, the LCT threshold is re-evaluated annually and subject to change.

While the LCT threshold is GST-inclusive, LCT is only payable on the GST- exclusive amount which exceeds the fuel efficient luxury car threshold. The LCT rate of 33% however, remains applicable where a fuel efficient luxury car exceeds the fuel efficient luxury car threshold. The LCT value is calculated as the sum of the VoTI.

Please note that duty rates will vary depending on the product you wish to import. For a full and current list of different duty rates you will need to view the Customs Tariff located on the Australian Customs and Border Protection Service website. The transport, insurance and postage rates shown are for the purposes of explaining how duty and GST are calculated and do not reflect actual rates.

How much is GST and how is it calculated?

Goods and Services Tax (GST) is payable on all imported goods unless the goods are covered by an exemption. Most goods are not exempt from GST having to be paid. The A New Tax System (Goods and Services Tax) Act 1999 states that the importer shall pay GST at the same time and in the same manner as Customs duty is paid.

The Act also provides that the rate of GST applicable on taxable importations is 10% of the Value of the Taxable Importation (VoTI).

The value of the taxable importation (VoTI) is the sum of:

1. the Customs value of the imported goods; and
2. the amount paid or payable;

• for the international transport of the goods to their place of consignment in Australia and to insure the goods; and
• any Customs duty payable in respect of the importation of the goods; and
• any wine tax payable in respect of the local entry of the goods

Goods that are entered for warehousing are not liable for GST until such time as they are cleared from the warehouse for “home consumption” (“home consumption” means that the goods enter into the commerce of Australia).

 

What duties and taxes will be applied to the goods I have purchased from the internet when they arrive?

Low value consignments up to AU$1,000 are imported free of Customs duty and taxes.Consignments of alcohol and tobacco products are excluded from this and will be charged Customs duty and taxes.

Consignments valued over AUD 1000 will be assessed for Customs duty and taxes. Duty rates vary from 0% to 10%, however most goods attract a 5% rate of import duty and 10% Goods and Services Tax (GST).

The import duty would be paid on Customs Value (actual price paid for the goods)

GST of 10% is calculated as follows:-

• Actual pricepaid for the goods
• Plus duty
• Plus the cost of freight and insurance

To determine the exact duty rate for your goods you can either peruse the Customs Tariff yourself or obtain a tariff classification from Customs.

• Apply for a tariff advice by completing a B102 (Application for Tariff Advice), for each "invoice"item. You should submit illustrative descriptive material (IDM) with your Tariff Advice Application. IDM may include, but is not limited to, photographs, website addresses, a sample of your product, product specifications, etc. This IDM will assist Customs in classifying your goods.

Please contact the Trade Advice Centre on 1800 053 016 or by email to This email address is being protected from spambots. You need JavaScript enabled to view it. or by facsimile to 03 9244 8680

 

Will I be charged duty or GST on a gift sent to me from overseas?

The laws about duty and GST apply to all imported goods, including gifts. When a gift is sent to you from overseas, the law states that you are the importer of the gift.

The gift concession has been revoked because it allowed inconsistent tax treatment of imported alcoholic beverages and tobacco products when compared with locally bought products. Although the gift concession has been revoked, gifts and any goods brought to Australia (except alcohol and tobacco) valued at AU$1,000 or less do not attract duty or Goods and Services Tax (GST). Goods imported over AU$1,000 are required to submit detailed information (an import declaration) and pay the applicable duty, taxes and Customs and Border Protection processing charges.

Note however that alcohol and tobacco are excluded from this threshold and duty and GST will be payable on these goods regardless of the value. If you have imported wine the Wine Equalisation Tax (WET) may also apply.

Goods imported into Australia above the threshold will attract a rate of Customs duty. Customs duties are determined by the classification of the goods in the Customs Tariffand the rate that applies to that tariff classification, as at the date the goods arrive.

Good and Services Tax (GST) is also payable on most goods. GST is calculated at:

• 10% of the value of the taxable importation (which is the customs value of the goods - also known as the invoiced value);
• plus the duty;
• plus the cost of freight (and insurance, if any) to ship the goods to Australia.

Importations over AU$1,000 in value should be cleared on a B374 Import Declaration N10 - Post (for goods imported via the post) or a B650 Import Declaration Nature 10 (for goods imported via any other means)for which there is a processing fee of approximately AU$50.00. A Registering as a Client in the Integrated Cargo System B319 form will also need to be completed. Alternatively you may have a customs broker complete this electronically for you.