Are you across recent import GST changes? | KPMG | AU
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Are you across recent import GST changes?

Are you across recent import GST changes?

Leonie Ferretter and Melissa McCosker alert importers to recent changes to reporting rules on imported goods.


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Container ship loaded with imported goods

The Tax and Superannuation Laws Amendment (2016 Measures No. 1) Act 2016 (the Act) implemented a range of changes, including providing an alternate method for the calculation of overseas freight and insurance where those amounts are unknown at the time of importation.

The Department of Immigration and Border Protection (DIBP) has released DIBP Notice 2016/33, outlining the impact of these changes.

Cost of freight and insurance is unknown

Where the actual cost of freight and insurance is unknown, for example under a Cost Insurance Freight or Cost and Freight contract, the importer may choose to use an estimate of these costs. The estimate must have sound reasoning and be supported by calculations that closely approximate the amount actually paid or payable.

If the actual costs become available at a later date and the difference between the estimated and actual costs are material, the importer must amend the import declaration, regardless of whether there was import duty or import goods and services tax (GST) applied.

Calculating VoTI

Value of Taxable Importation (VoTI) is the basis for calculating import GST on imported goods. From 1 October 2016, where goods are imported under a contract for sale that does not specify the costs for overseas freight and insurance, in calculating the VoTI importers have the option to:

  • use actual freight and insurance amounts or 
  • use 10 percent of the customs value as the freight and insurance amount.

Where the contract price includes freight and insurance amounts, these must be declared in line with what was actually paid, or in accordance with item 1 above. The DIBP has commenced compliance activities in relation to this issue.

It is therefore suggested that importers review import contracts and declarations to ensure that the calculations have been declared in accordance with the Act.

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