Times have changed for Australian importers.
Whether you’re bringing in a few luxury cars, restocking your trading stock, or arranging a shipment of goods for your small business, one thing hasn’t changed: understanding your tax on imported goods is critical if you want to stay compliant and save money.
At Pherrus Financial Services, we specialise in helping individuals and businesses manage the complexity of Australian customs, GST on imported goods, and related taxes.
With decades of experience in taxation strategy and compliance, our advisors ensure your import operations are not only compliant but also cost-efficient.
If you’re looking to import goods into Australia, this guide unpacks everything from customs duty and services tax (GST) to import declarations, concessions and schemes that could help you pay less.
Consistent communication, clear compliance, and reliable accounting support.
Understanding Tax on Imported Goods
In Australia, most goods imported are treated as taxable importations. This means they’re subject to GST equivalent to 10% of the taxable import value.
The taxable value is based on the customs value, with the insurance cost being a key component, along with freight charges and any customs duty payable.
Importers should also be aware of additional costs such as customs duties and taxes, as understanding these is crucial to avoid unexpected expenses and ensure a smooth import process.
For both individuals and businesses, the amount you pay depends on the type and value of goods imported.
Businesses, on the other hand, have the added responsibility of correctly reporting GST, claiming GST credits, and lodging import declarations.
The experts at Pherrus help reduce the risk of costly mistakes because even small errors in the import declaration process can lead to double payments, penalties, or denied credits later.
The Breakdown: Customs Duties and Additional Taxes
Customs Duty: The Price of Entry
When importing goods into Australia, you’ll often pay customs duty which is a tax designed to protect Australian industries and generate government revenue.
The duty amount is calculated as a percentage of the customs value of your goods, which includes insurance, freight, and the price paid for the goods imported.
The Australian Border Force (ABF) assesses and collects these duties under the Customs Tariff Act, considering the product type, any trade agreements, or customs duty concessions that may apply.
Failing to declare accurate values or missing customs documents can delay clearance or lead to investigation.
That’s why many importers work with a licensed customs broker or freight forwarder to handle compliance professionally and avoid unnecessary costs.
Other Taxes to Consider
In addition to duty and GST, certain imported items attract additional taxes, including:
- Wine Equalisation Tax (WET): Applies to wholesale sales or importations of wine.
- Luxury Car Tax (LCT): Applies to luxury cars that exceed the established value threshold.
- Excise-like duties: On goods such as alcohol and tobacco products, which are always subject to import duty regardless of their value.
Specialty taxes can apply to goods such as alcohol, tobacco, or luxury cars, in addition to other taxes.
These taxes ensure fair competition and help protect Australian industries from undercut pricing on imported products.
Excise-like duties specifically apply to alcohol and tobacco products, including tobacco products such as cigarettes, cigars, and loose tobacco, which are always subject to import duties and taxes regardless of their value or trade agreements.
GST on Imported Goods and the Deferred GST Scheme
When you import into Australia, GST is payable at 10% of the taxable importation value which covers the customs value plus insurance, freight, and duty.
This amount must usually be paid before goods are released.
However, businesses registered for GST can often reclaim that amount as GST credits in their Business Activity Statement (BAS).
Eligible importers can also apply for the Deferred GST Scheme, which allows them to defer paying GST until they lodge their next BAS which assists in improving cash flow and easing upfront costs.
To join the deferred GST scheme, you must:
- Be registered for GST,
- Lodge BAS monthly, and
- Have a good lodgement and payment record with the Australian Taxation Office (ATO).
Under this scheme, the ABF reports your deferred GST liability to the ATO each month, and the deferred amount is included when you calculate net GST payable on your BAS.
If you’re not on this scheme, you must pay GST at the same time and place as customs duty, in the same manner.
Claiming GST Credits on Imported Goods
When goods are imported for a creditable business purpose, registered importers can claim GST credits for the GST paid (or deferred).
To do this, you need valid evidence, usually your import declaration showing GST was paid or deferred.
Here’s how to report your claim:
- Report capital acquisitions at Label G10 and non-capital acquisitions at Label G11 in your BAS.
- Keep documentation for at least five years to support your GST credit claims.
Pherrus can assist you in organising GST paperwork and claiming legitimate credits to maximise cash flow while keeping your business fully compliant.
Non-Taxable Importations and Concessions
Not every import is taxed. A non-taxable importation includes:
- Goods that would normally be GST-free (e.g., basic food, medical supplies, medical aids as defined in GST legislation, and precious metals—limited to gold, silver, and platinum under GST law)
- Input taxed imports like certain financial products, medical aids, and precious metals (refer to GST legislation for precise definitions)
- Goods covered under trade agreements or duty concessions
- Goods returned to Australia unchanged in ownership and condition, including goods that are re exported, which may attract tax advantages or exemptions if ownership and condition remain the same
- Temporary imports (up to 12 months)
- Small consignments with a customs value up to $1,000
All products imported into Australia are typically subject to import duties and GST unless there is a particular concession or exemption.
Other options like Tariff Concession Orders (TCOs) or the Tradex Scheme can allow for duty-free or GST-free importation in specific circumstances.
Tariff Concession Orders (TCOs) let you import goods into Australia duty-free if there are no Australian manufacturers of the goods.
If you’re not sure whether your shipment qualifies, a discussion with a customs broker or taxation specialist at Pherrus Financial Services can clarify exactly what taxes apply and what you can legally avoid.
Selling Imported Goods and On-Sale GST Clarity
If you’re importing to resell, remember: GST applies not only when you import but also when you sell the goods.
Even if you’ve already paid imported goods GST, you must still report the on-sale on your BAS, including output tax payable.
For businesses registered for GST, this means:
- Declaring your sale,
- Reporting GST collected,
- Then claiming the input tax credit for GST originally paid on import.
Accurate recordkeeping and professional tax management are essential to avoid double payments or compliance errors.
Common Mistakes and How to Avoid Them
- Incorrect Customs Declarations: Misreporting the customs value or classification under the Customs Tariff Act.
- Ignoring Deferred GST Records: Not reconciling deferred GST against your BAS.
- Mixing Business and Personal Expenses: GST credits can’t be claimed on private or non-deductible costs such as entertainment.
- Unreported Voluntary Disclosures: If you find an error in past imports, the best path is honesty. Declaring mistakes voluntarily to the Australian Taxation Office reduces penalties and protects your import rights.
The accountants at Pherrus have helped countless businesses prepare voluntary disclosures to correct errors and restore compliance, without the heavy fines that come with ATO enforcement.
The Cost of Non-Compliance
A simple oversight like missing a declaration, claiming the wrong input tax, or undervaluing cargo can quickly snowball.
The ATO and ABF cross-reference customs documents, BAS data, and international cargo declarations to ensure accuracy.
Failure to comply can trigger audits, penalties, and even suspension of your import licence.
But handled correctly, your imported goods can remain compliant, profitable, and strategically positioned in Australia’s competitive marketplace.
Partner with Pherrus: Your Trusted Tax Advisors for Imports
Navigating tax on imported goods doesn’t have to be confusing or costly.
With the right guidance, you can minimise import duties, optimise GST credits, and leverage customs duty concessions legally and effectively.
At Pherrus Financial Services, our tax consultants work with importers of all sizes from startups to enterprise-level businesses to simplify compliance, save on duties, and streamline your BAS reporting.
Let us handle the complexity of Australian customs and GST so you can focus on growing your business, not calculating your paperwork.
Contact Pherrus today to discuss your next shipment and discover smarter strategies for managing tax on imported goods, GST, and beyond.
FAQ
What Taxes Apply to Imported Goods in Australia?
When importing goods into Australia, most shipments are subject to customs duty and the Goods and Services Tax (GST), collectively referred to as the tax on imported goods.
Customs duty is calculated as a percentage of the customs value (including insurance and freight), while GST is payable at 10% of the taxable importation value.
Depending on the item, additional taxes such as Luxury Car Tax (LCT) or Wine Equalisation Tax (WET) may apply.
Certain customs duty concessions and trade agreements can provide exemptions or reductions for eligible importers.
Fluctuations in exchange rates can change the total taxes applied to imported goods.
Every product has a specific code under the Harmonised System (HS) that determines the tariff rate. Tariffs and consumption taxes on imported goods contribute significantly to higher retail prices for consumers.
Can I Claim GST Credits for Imported Goods in Australia?
Yes. If you’re a business registered for GST and you import goods for a creditable business purpose, you can claim credits on the GST paid or deferred GST at importation.
To claim GST credits, you must have documentation showing the goods have been imported and GST was either paid or deferred at the time the goods were entered for home consumption.
These claims are reported in your Business Activity Statement (BAS) under G10 (capital acquisitions) or G11 (non-capital acquisitions).
Accurate recordkeeping is essential for compliance and to maximise legitimate GST refunds.
You can claim credits on imported goods in the activity statement relevant to the tax period in which you pay the assessed GST on the import of those goods.
If you are not registered under the deferred GST scheme, then the GST is payable at the same time, at the same place, and in the same manner as you would customs duty.
What is the Deferred GST Scheme and How Does it Benefit Importers?
The deferred GST scheme allows eligible Australian businesses to defer payment of GST on taxable imports until their next BAS lodgement, rather than paying upfront when goods arrive. This scheme improves cash flow for importers and simplifies reporting.
To participate, you must be registered for GST, lodge your BAS monthly, and meet good compliance standing with the Australian Taxation Office (ATO).
Once approved, the Australian Border Force (ABF) records your deferred GST liability at clearance, and it is reported to the ATO for inclusion in your BAS.
If an importer is approved to defer GST, the ABF releases the goods after payment of any customs duty or other charges.
The ABF records the deferred GST liability of each shipment as it is cleared.
At the end of the month, the ABF advises the ATO of the total deferred liability of each importer who deferred GST.
GST on taxable importations is collected by the Department of Home Affairs. GST is payable before the goods are released by Home Affairs.
