GST Refund Scheme for Importers – An Opportunity to Reduce Customs Costs

If your business imports goods into Australia, you may be paying GST at the border when the goods enter the country — and you may be entitled to claim some or all of that GST back. Understanding the GST refund mechanism for importers can significantly reduce your cost of importing and improve your business's cash flow.

How GST Applies to Imports

When goods are imported into Australia with a customs value of AUD $1,000 or more, GST is payable at the border at a rate of 10% of the taxable value of the goods (which includes the customs value, customs duty, and certain other charges). This GST is collected by the Australian Border Force (ABF) as part of the import entry process.

For goods under $1,000 (Low Value Imported Goods or LVIG), the overseas supplier or marketplace operator is responsible for collecting and remitting GST — importers receiving these goods for business use are not charged GST at the border.

Claiming Back GST Paid on Imports

If you are registered for GST and you import goods for use in your business activities, you are generally entitled to claim an input tax credit (ITC) for the GST paid at the border. This is claimed through your Business Activity Statement (BAS).

To claim the ITC, you will need a tax invoice or import entry document from the ABF that shows the amount of GST paid. This document should be issued as part of your customs clearance process through your licensed customs broker.

What If You Over-Paid GST on Imports?

In some cases, importers pay more GST than they should — for example, if:

• The value of goods was incorrectly declared or assessed at a higher rate
• Goods were returned to the overseas supplier after import
• Goods were destroyed or lost after import but before use
• You imported goods that were exempt from GST but GST was charged in error

In these cases, you may be able to apply to the ABF for a refund of the GST overpayment. Refund claims must generally be lodged within 4 years of the relevant import entry being made.

Customs Duty vs GST — Two Different Things

It's important not to confuse GST with customs duty. Customs duty is a separate charge imposed on certain categories of imported goods at rates that depend on the goods and their country of origin. Customs duty is generally not refundable through the BAS — it is a cost of importing. However, under free trade agreements (such as those Australia has with China, Japan, and the USA), duty rates may be significantly reduced or eliminated.

Opportunity for Importers: Review Your Import Costs

If your business regularly imports goods, it's worth conducting a review with your accountant and customs broker to ensure:

• You are correctly claiming all input tax credits for GST paid on imports
• Your goods are being classified under the correct tariff codes to minimise duty
• You are taking advantage of any free trade agreement duty concessions
• You are not over-paying GST due to incorrect valuation

For businesses importing high volumes of goods, even small improvements in the tax and duty treatment can result in significant annual savings. Elite Accounting Solutions can work with your customs broker to review your import costs and ensure you are claiming everything you are entitled to.