Do You Pay GST on Imported Goods in Australia?

You pay GST on most goods you import into Australia. The rate is 10 per cent. It is almost always more than 10 per cent of your factory invoice.

That is the part founders get wrong. GST on imports is not calculated on what you paid the factory. It is calculated on the customs value, plus any duty, plus the cost of getting the goods here. Freight and insurance sit inside the base.

The better news is that if you are registered for GST and the stock is for your business, you get all of it back. Import GST is a cash flow problem, not a cost. Duty is the cost. Here is how the number is built, how long your money is gone for, and how to stop paying it at the border at all.

Do you pay GST on imported goods in Australia?

Yes, on any consignment with a customs value above A$1,000. The Australian Border Force charges 10 per cent of what it calls the value of the taxable importation, payable at the same time and in the same manner as customs duty. In practice your customs broker pays it and invoices you, or you pay it yourself before the goods are released.

Consignments at or below A$1,000 in customs value are not taxable importations. GST on those is the overseas seller's job instead. That rule catches people on sample orders, so there is a section on it below.

Alcohol and tobacco are charged regardless of value.

How is GST on imports calculated?

GST is 10 per cent of the value of the taxable importation, which the ABF shortens to VoTI. VoTI is four things added together:

• The customs value of the goods. For an FOB order this is usually your invoice value, converted at the exchange rate on the date of export.
• Any customs duty payable on the importation.
• What you paid or will pay for international transport.
• Insurance on that transport.

Duty works differently. Duty is calculated on the customs value only. Freight is not in the duty base. It is in the GST base. Which value counts as your customs value depends on your Incoterm, so check what your quote actually covers before you do the maths.

A worked example

A 3,000 unit order, FOB, by sea. Duty at 5 per cent, so no free trade agreement applies.

• Customs value: A$42,000
• Customs duty at 5 per cent: A$2,100
• Sea freight and marine insurance: A$3,400
• VoTI: A$42,000 plus A$2,100 plus A$3,400 equals A$47,500
• GST at 10 per cent of VoTI: A$4,750
• Payable at the border: A$6,850

Ten per cent of the factory invoice would have been A$4,200. The real figure is A$4,750. The A$550 gap is 10 per cent of the duty and the freight. If you budgeted the first number, you are short on the day the container lands, and the destination charges arrive in the same week.

Does a free trade agreement remove the GST?

No. A free trade agreement removes duty. It does nothing to GST.

Under ChAFTA most Chinese-origin goods enter at zero duty. Indian-origin goods enter duty free from 1 January 2026 with a valid Certificate of Origin. Run the same order at zero duty and the VoTI becomes A$42,000 plus A$3,400, so A$45,400, and the GST becomes A$4,540.

You saved the A$2,100 of duty and the A$210 of GST sitting on top of it. The other A$4,540 still has to be paid at the border.

Can you claim GST on imported goods back?

Yes, if you are registered for GST and you imported the goods for a creditable purpose. Stock for resale is a creditable purpose. You claim it as a GST credit at label 1B on the activity statement for the period in which the GST was paid.

You need the paperwork to do it. The ATO accepts a finalised Import Declaration N10, or an N30 if the goods came out of a licensed warehouse, together with the official receipt showing what was paid. Its position is blunt: you must not claim a GST credit if you do not hold the relevant documentation. If a broker lodged the entry, the documents are with them. Ask for the N10 on every shipment and file it.

Duty is not claimable. Duty is a real cost and it belongs in your landed cost per unit. GST does not.

What about sample orders and anything under A$1,000?

A consignment valued at A$1,000 or less is not a taxable importation, so nothing is collected at the border. Instead, overseas sellers and marketplaces with A$75,000 or more of annual sales into Australia are required to charge GST at the point of sale.

If you are registered for GST, give the supplier your ABN and tell them you are registered before you pay. They should not charge GST on a business sale. If they charge it anyway, you generally cannot claim it back, because a seller on the ATO's simplified registration cannot issue a tax invoice. Your only option is to ask the supplier for a refund, which is a conversation you want to have before the money leaves.

Splitting one order into a run of parcels under A$1,000 is not a strategy. The threshold applies to the consignment, bulk orders are excluded from the concession, and the pattern is obvious from the paperwork.

How long is your money tied up?

This is the number that actually hurts. Take the A$4,750 from the worked example and say the container clears on 2 October.

• Quarterly BAS. The October to December quarter is due 28 February. Electronic refunds take up to 12 business days after that. You see the money around mid March. Roughly five months.
• Monthly BAS. October's statement is due 21 November. You are waiting about seven weeks.
• Deferred GST. You never pay it. The liability and the credit land on the same statement and cancel each other out.

Five months is a long time to fund the government's share of one container, particularly if the deposit on your next order falls due before the refund arrives. Whether your business can carry that gap is a cash flow question rather than a sourcing one, and Kristy works through that side of it in how to manage cash flow in a product business.

What is the deferred GST scheme?

It is an ATO scheme that defers GST on imports to your next activity statement instead of taking it at the border. For an approved importer the GST effectively stops being a payment. The ATO pre-fills the deferred amount at label 7A, you claim the matching credit at 1B, and the two offset on the same monthly statement.

To be eligible you must:

1. Have an ABN.
2. Be registered for GST.
3. Lodge your BAS monthly.
4. Lodge online and pay electronically.
5. Deal with the ABF electronically.
6. Be up to date on your returns, lodgements and payments.

You apply using the ATO's online form, Application for approval to defer GST on imported goods, NAT 75136. The form checks your eligibility before you fill in the rest of it.

The trade is monthly lodgement. If you lodge quarterly today, you are swapping four statements a year for twelve. For a business bringing in containers a few times a year, that is worth it. If you import once a year, it probably is not.

Once you are in, stay current. Late lodgement or a defaulted payment plan can get you withdrawn from the scheme, and the ABF will hold your goods until the GST is paid.

Checklist before your next shipment clears

1. Confirm your HS code and your duty rate, because duty feeds the GST base.
2. Ask your broker for the VoTI calculation in writing before the vessel arrives, not an invoice after.
3. Budget 10 per cent of customs value plus duty plus freight and insurance. Not 10 per cent of the factory invoice.
4. Collect the finalised N10 and the receipt for every import, and keep them.
5. Claim the credit at 1B in the period the GST was paid.
6. Give every supplier your ABN on orders under A$1,000.
7. If you import more than once or twice a year, apply for deferred GST.

None of this changes what your product costs to make. It changes how much working capital you need on the day it arrives, which is usually the tighter constraint.

If you want someone to check the duty and GST maths on an order before you commit to it, that is part of what we do. Email kristy@sourcehaus.co.

Figures in this article reflect ABF and ATO guidance current at the time of writing. Rates, thresholds and scheme conditions change. Check the ABF guidance on GST and other taxes and the ATO deferred GST scheme before you rely on a number, and talk to your accountant about your own position.