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GST Implications on Low Value Imported Goods

Effective July 1st, 2018, Australian shoppers and overseas retailers initiate changes as the $1,000 GST Free threshold on low value imported goods are being removed.  Overseas retailers who sell more than $75,000 in goods annually in Australia will be required to collect GST.  

This means Australian based retailers that are involved in drop-shipping goods will need to charge GST from 1 July.  However, if you purchase low value imported goods you should not be charged GST if you:

  • Import the low value goods for commercial use in Australia
  • Are registered for GST
  • Provide your Australian Business Number (ABN) to the supplier along with a statement declaring you are registered for GST

If you are inappropriately charged GST, you should seek a refund from the supplier.  In some cases, you may be entitled to claim a GST credit instead.  Remember, when claiming a GST credit, you should have a valid tax invoice.  Only receipts that contain an ABN are valid tax invoices, even if they apply GST.  Some overseas suppliers may be registered in the simplified GST system and have an Australian Tax Office Reference Number (ARN) instead of an ABN.

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