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Wholesale & eBay Forum Importing & Customs How is Australian GST being calculated and charged?

How is Australian GST being calculated and charged?


treeoflife2009
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16 Sep 13 03:12:28 am
Hey guys, I don't know if you can help me with my question :D If your drop shipping product cost is 1k & in Australia you don't get taxed and anything above that you get taxed 10% & no GST. My question is if you're running a drop shipping business & the tax office knows about it & its legal, wouldn't you get pulled up on it because you are some how avoiding paying tax purposes and your using there system against them :P. My second question is, it better to keep your product cost below the 1k mark or above ? In the the time aren't you limiting your self when it comes to profit? I hope my question helps others.


richelle_salehoo1
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16 Sep 13 05:51:45 am
Hello treeoflife,

I strongly suggest getting in touch with our Community Manager, Marc Ransom. I'm pretty sure he can help you with your concern better than I can :)

But here are a few threads with similar discussions -

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Hope this helps somehow :)


Richelle

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fudjj
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17 Sep 13 09:16:48 pm
treeoflife2009 wrote:Hey guys I don't know if you can help me with my question :D If your drop shipping product cost is 1k & in Australia you don't get taxed, & anything above that you get taxed %10 & no gst because your drop shipper. My question is if your running a drop shipping business & the tax office knows about it & its legal wouldn't you get pulled up on it because your some how avoiding paying tax purposes &your using there system against them :P. My second question is it better to keep your product cost below the 1k mark or above ? In the the time aren't you limiting your self when it comes to profit?? I hope my question helps others


Hi TOL,

In regards to Australian GST charges.

Not 100% sure I completely understand your question, but let me try to answer for you and see if that makes sense. For your first question, it is completely incumbent on you as a registered business operator to ensure all your books are in order and everything declared to the Tax Dept or your accountant at tax time.

There will always be a GST component that you will definitely need to pay, the job of a good accountant is to limit that liability as much as possible with off-sets. I would strongly suggest you meet with an accountant so they can explain your responsibilities and how it all works so you are fully informed.

In regards to your second question. No, I don't think it's wise to keep under the 1K margin if your market has products priced above that mark. That will only limit your market, not a great idea.

Cheers


Mark (fudjj)

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treeoflife2009
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19 Sep 13 12:11:17 am
Hey marc thank for your replay I also sent ypu a msg


fudjj
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22 Sep 13 07:30:08 pm
Hi TOF, reply sent :)


Mark (fudjj)

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william232
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27 Sep 14 05:11:32 pm
sorry to take over this thread but i have heard is it true that if you buy somthing from say china ship it to australia you wont be charged tax?

is this true and is there the same thing with australia and new zealand??


fudjj
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27 Sep 14 06:03:38 pm
Not true at all

Australia has a GST threshold of 1K, anything in value under that threshold is GST free, anything 1K and over has a GST of 10% applied to it. Not sure about NZ myself, but I would imagine you would have similar. Check out the Customs site, the information will be there.


Mark (fudjj)

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foxyroxy
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20 Nov 14 10:34:32 pm
RE: AUSTRALIA

"Low value consignments up to AU$1,000 are imported free of Customs duty and taxes.Consignments of alcohol and tobacco products are excluded from this and will be charged Customs duty and taxes.

Consignments valued over AUD 1000 will be assessed for Customs duty and taxes. Duty rates vary from 0% to 10%, however most goods attract a 5% rate of import duty and 10% Goods and Services Tax (GST)."

see

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If you dropshipped an item of $1,000 from overseas into Australia - I assume that the purchaser would be sent a bill for $150 (10% gst & 5% import duty)???

I have always purchased lots from overseas to Australia under $1,000 to avoid GST & import duties


raybal5
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25 Dec 14 10:27:30 am
If you are running a business then you would first register for an ABN. If you are turning over more than AU$70,000 per annum you are also required to be GST registered. One of the benefits of being a business is that the amounts you pay to eBay (9.9%) and PayPal (also around that %) are legitimate deductions.

Regardless of that, the ATO will not require you to pay GST on items imported under the $1,000 threshold. You are not "..using their system against them. You are merely using their system. They set the rules and as long as you comply, there will be no issue.

Another thing to consider (and I'm not 100% sure of this legally but pretty confident), under a drop-shipping transaction the importer of the item is the purchaser rather than yourself. You are merely the marketer who takes a cut. The supplier sending the goods directly to the buyer. If there is any taxes or duties to be paid, that is the responsibility of the importer; your customer.


 

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