Thread: July the 1st 2018 GST On Low Value Imported Goods

But if the system is already in place and been operating since GST came in the only difference is that it applies to everything not just the $1k plus items
Maybe it isn’t going to be such a big deal for them to instigate? Maybe the hassle will be for the buyer and the seller

Originally Posted by Beardy

But if the system is already in place and been operating since GST came in the only difference is that it applies to everything not just the $1k plus items
Maybe it isn’t going to be such a big deal for them to instigate? Maybe the hassle will be for the buyer and the seller

The logistics will be a challenge when the duty gets paid and they have to find the parcel for delivery. Having worked within the AP system for many years I can't imagine how that part is going to work. The whole mail distribution system is based on the JIT (just in time) principle and does not excess storage capacity in it or any method to locate an individual item. The aim is to clear the whole network of mail and parcels every day, it simply defies imagination to think it can work.

If AP works on the JIT system, why does it take 6-7 days to get a parcel from Melbourne to Sydney these days? Used to be a lot quicker a few years back.

Originally Posted by Lappa

If AP works on the JIT system, why does it take 6-7 days to get a parcel from Melbourne to Sydney these days? Used to be a lot quicker a few years back.

It's JIT within the warehouse. After that.....well the space is freed up, so perhaps they just drive it around for a while in all those micro-warehouses on wheels?

Nah, just kidding - maybe I've been lucky, but over the last 6 years I have sent a helluva lot of parcels out (several 100s) via AP, and they get there quickly, and have never had a loss or damage.

I still can't find anything that states gst will be charged at the border for goods imported under $1000-. You will only be charged gst for goods under $1000 by overseas vendors registered for gst - those that export more than $75,000 to Australia.

Quoted from Penguin Management website about what to know about the new rules on GST & Low Value Imported Goods 2018

Changes to the Integrated Cargo System

Overseas businesses that are registered for GST and sell low-value goods to Australia are required to provide all relevant information on customs documents, e.g. import declarations or self-assessed clearance documents.

To support the ATO and facilitate the movement of low-value goods across the border, changes have been made to the Integrated Cargo System (ICS) to collect additional information, including:

an additional field on import declarations and all forms of self-assessed clearance (SAC) declarations, including those made on a cargo report, to allow the capture of a Vendor Registration Number (Vendor ID) – this is either an Australian Business Number or ATO Reference Number
an additional field on air and sea cargo reports allowing the capture of an importer identifier (if an ABN has been quoted)
an additional GST exemption code for use on an import declaration when GST has already been paid on imported goods.

This will also help prevent double taxation and assist with data collection.

and

If the overseas seller is not an Australian company nor registered for GST, the Australian recipient or customer will be contacted to pay the 10% GST plus a processing fee, before the goods can be delivered to the Australian address.

If the recipient or customer refuses to pay the GST and additional fees at this time, the goods will be returned at the senders’ expense.

So goods will be held up for payment and a processing fee before being released. Makes importing cheap items from small overseas companies not as attractive as now, but since when has the government ever worried about things like that.

Peter.

The questions raised and answered by the Penguin Management Team at the bottom of their website about the extension of the GST deals with a number of issues raised in this thread. Well worth a read.

Peter.

Originally Posted by Sir Stinkalot

How does the notification process work? The parcel will only have my name and address (actually works address). Do they send a letter to advise my parcel needs certification.

Do I email through my invoice (not tax invoice) showing a pre-July 1 purchase was made. The invoice is fairly basic.

every o/s parcel I've received has had a Customs Declaration attached to the outside -- in a clear plastic sleeve. This declaration invariably contains an invoice showing the goods, shipping address, billing address, and, when from a switched on supplier, the country of origin of the goods and the appropriate import code. The invoice should show that GST (or tax) was or was not collected at the point of sale.

Originally Posted by Sturdee

The questions raised and answered by the Penguin Management Team at the bottom of their website about the extension of the GST deals with a number of issues raised in this thread. Well worth a read.

Interesting.
Maybe not a surprise, but a lot of what Penguin Management write is a rehash of what's on the ATO site.
A side effect of the new rules might be that a lot of Australian micro businesses (turnover<$75000) register for GST.

There still seems to be a lot of confusion about small value items from specialist suppliers -- and the advice "Perhaps there is an Australian business who can supply your parts quickly and for the same price?" is very helpful NOT.

the above discussion is no longer academic, but real.

There should be some stories in tomorrow's press -- and a few horror stories by the end of the week.

And how much is the "processing fee"?

Originally Posted by woodPixel

And how much is the "processing fee"?

That is going to be the $64 question. I can see a huge backlog of items held up in a wharehouse or freight forwarding company until the dust settles, and it may be dusty for quite a while.

Alan...

Originally Posted by Uncle Al

That is going to be the $64 question. I can see a huge backlog of items held up in a wharehouse or freight forwarding company until the dust settles, and it may be dusty for quite a while.

Alan...

I can't find any details on the Custom's website about the fee but I would not be surprised is their fee for handing imports above $ 1000 would be applied for imports below $ 1000, which currently is $ 90.00.

So the GST collected may be small the charges will be substantial and improve the government take on imports. Whilst the GST is passed onto the states, the Custom's fees is kept by the Federal government which makes it even more attractive.

Also, currently it takes Customs at least 8 working days to inspect documents, etc, for imports and 3 days to process payment before goods are released to AP. With the expected increase this will no doubt lengthen considerably making purchasing from non GST compliant overseas businesses even more unattractive.

Peter.

It would be interesting to see if sub $1000 purchases that were made before 1st July (which will not have GST collected) will still have to pay the processing fee.

Just like items that enter post 1st July with GST already applied the item will still need to undergo the same level of “processing” but it will just be found that the GST wasn’t applicable at the time of purchase.