Goods & Services Tax A guide to the practicalities of ANTS (A New Tax System)

Content This presentation will cover: Taxable Supplies vs Taxable Importations The GST treatment of imports and exports Importations through agents “Reverse Charge” supplies; non-residents Transport and Insurance costs WET and LCT Tourist Refund Scheme

Taxable Supplies A supply is a taxable supply if It is made for consideration; and It is made in the course of carrying on an enterprise; and It is connected with Australia; and The supplier is registered for GST or required to be registered. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed

Supplies connected with Australia supplies of goods wholly within Australia supplies of goods from Australia supplies of goods to Australia if the supplier – imports the goods into Australia; or – installs or assembles the goods in Australia. supplies of real property located in Australia supplies of anything else if – the thing is done in Australia; or – the supplier makes the supply through an enterprise that the supplier carries on in Australia.

Input Taxed Supplies Financial Supplies Residential rent Residential premises Precious metals

GST-free Supplies GST-free supplies include: Food Health Education Child care Exports of goods Transport and related matters Supplies through inwards duty free shops

Transport and Related Matters Transport to or from Australia Transport of goods within Australia Insurance Arranging Transport

Taxable Importations include importations into Australia of goods that are entered for home consumption; and other importations for which the Customs Act does not require an entry; and goods sold at inwards duty free shops.

Non Taxable Importations Goods covered by certain items in Schedule 4 to the Customs Tariff Act 1995 Importations of ship and aircraft stores within the meaning of s130C of the Customs Act Goods imported or purchased by overseas travellers and are covered by item 15 to Schedule 4 to the Customs Tariff Act Goods that would have been GST-free supplies or input taxed if they had been a supply.

Calculation of GST on Imports GST is calculated as 10% of the Value of the Taxable Importation VoTI is the sum of The customs value of the goods; and The amount paid or payable to – transport the goods to Australia; and – insure the goods for that transport; and any customs duty payable.

Payment of GST on Importations GST is payable At the same time, at the same place, and in the same manner as customs duty is payable on the goods in question (or would be payable if the goods were subject to customs duty); or Within such further time specified in the regulations, and at the place and manner specified in the regulations.

Importer Value of Taxable Importation $1000 Australian Taxation Office: Total GST $250 Retailer sells to final customer Final Customer Customs Value $870 Duty $30 Freight/Insurance $100 $100 GST payable $100 GST paid HOW GST WORKS IMPORTED GOODS Importer sells to retailer Customs $1650 incl. $150 tax $2750 incl. $250 tax $150 tax collected $100 credit claimed $50 GST remitted $250 tax collected $150 credit claimed $100 GST remitted $250 GST paid

Exporter sells DDU Value of Taxable Importation $1000 Australian Taxation Office: Total GST $250 Importer sells to retailer Final Customer Customs Value $870 Duty $30 Freight/Insurance $100 $100 GST payable $100 GST paid IMPORTED GOODS Delivered Duty Unpaid Broker clears in Importer’s name, GST to Importer’s account Customs $1650 incl. $150 tax $2750 incl. $250 tax $150 tax collected $100 credit claimed by importer $50 GST remitted $250 tax collected $150 credit claimed $100 GST remitted $250 GST paid Retailer sells to Final Customer

Exporter sells DDP Value of Taxable Importation $1000 Australian Taxation Office: Total GST $250 Importer sells to retailer Final Customer Customs Value $870 Duty $30 Freight/Insurance $100 $100 GST payable $100 GST paid IMPORTED GOODS REVERSE CHARGE ON SUPPLIES S83-5 ANTS(GST) Broker clears in Importer’s name, GST to Importer’s account Customs $1650 incl. $150 tax $2750 incl. $250 tax $150 tax collected $100 credit claimed by importer $50 GST remitted $250 tax collected $150 credit claimed $100 GST remitted $250 GST paid Retailer sells to Final Customer

Entry of goods A supply of goods where the goods are exported is GST- free, including: goods - general goods that are to be consumed on international flights or voyages goods used to repair, renovate, modify or treat other goods goods exported by travellers as accompanied baggage

Exports A supply of goods where the goods are exported is GST- free, including: goods - general goods that are to be consumed on international flights or voyages goods used to repair, renovate, modify or treat other goods goods exported by travellers as accompanied baggage

Timber Merchant Australian Taxation Office: Total GST nil Furniture Maker Furniture Retailer Overseas Customer $1100 incl. $100 tax $100 tax collected $100 GST remitted $150 tax collected $100 credit claimed $50 GST remitted nil tax collected $150 credit claimed $150 GST credit Nil GST paid $1650 incl. $150 tax $2500 no tax HOW GST WORKS EXPORT SALE

Australian Business Number Tax Commissioner is the Registrar of the Australian Business Register Objective is to make it easier for business to deal with government - “single window” concept entitlement to registration if entity is a company or an entity carrying on an enterprise in Australia

Wine Equalisation Tax Coverage Application Calculation Treatment at importation

Luxury Car Tax Coverage Calculation Application Treatment at importation

Tourist Refund Scheme Design Minimal Customs involvement Relationship with other schemes

Questions? aimed at practical applications of GST commercially allocation of composite charges inclusion of specific costs into VoTI incidental application in any import transaction GST on Exports GST exemptions exemption codes on import entry LCT/WET applications