This information is helpful if you're a non-resident business selling imported services, digital products and low value imported goods (that is, you are a merchant).
This information should be read with Non-resident businesses and GST and GST on imported services, digital products and low value imported goods.
Who pays GST
You're responsible for GST that applies to your sales if you:
- sell low value goods that are imported by a consumer in Australia
- sell services or digital products from outside of Australia to Australian consumers
- help deliver goods to Australia by sending them yourself or arranging delivery
- don't make supplies through an EDP operator that's responsible for collecting GST.
Example: Non-resident merchant
Electronics Co is a merchant in China selling electronic products to consumers in Australia and meets the A$75,000 threshold to register for GST in Australia.
On 1 July 2018, Vishal buys a device from Electronics Co. Electronics Co arranges the item to be shipped to Australia. On its website, Electronics Co displays a price including GST.
Electronics Co charges Vishal A$110. It returns GST of A$10 from the sale to the ATO in its GST return.
End of exampleSelling through an electronic distribution platform
An EDP is a service that is delivered by electronic communication that allows you to make sales of goods or services to purchasers. Examples include an online marketplace or app store.
If you sell digital products or low value imported goods to customers through an EDP, the EDP operator is generally responsible for GST payable on these sales. If the EDP operator is responsible for GST, these sales don't count towards your GST turnover when calculating if you need to register.
A service isn't an EDP if it only:
- advertises your products, such as giving a link for customers to buy goods from your website. You are responsible for GST on these sales
- sells face-value vouchers online, such as gift vouchers that can be used for a choice of items up to a particular monetary value.
Selling through an EDP and warehousing in Australia
A non-resident business that imports goods and warehouses them in Australia prior to selling them online, directly or through an electronic distribution platform, will have a GST obligation for the goods sold because the goods are located in Australia.
Example: Selling through an EDP and warehousing in Australia
Household Harriet is a Hong Kong based business selling goods to Australian customers through an electronic distribution platform, Orchidtreez.com.
Orchidtreez.com offers their offshore sellers the option of warehousing their goods in Australia. Household Harriet imports a bulk amount of goods into Australia to be warehoused by Orchidtreez.com.
When Household Harriet imports the bulk amount of goods into Australia, they incur GST and customs duties at the time of importation, because the customs value of the importation exceeds A$1,000.
At the time Household Harriet makes a sale of a good warehoused in Australia through Orchidtreez.com, Orchidtreez.com provides delivery of the goods to Household Harriet's customers. This process is often referred to as a fulfilment service.
Household Harriet is not making a supply of low value imported goods because the goods are located in Australia when they are sold.
Household Harriet is registered for GST and is making a taxable supply of goods wholly in Australia. Household Harriet will therefore be responsible to charge GST on the sale of the goods.
Orchidtreez.com, as an electronic distribution platform operator, is not treated as the supplier for GST purposes because the goods are located in Australia at the time of the sale.
Household Harriet has standard GST registration which allows them to:
- claim the GST credits incurred on the taxable importation of their bulk goods
- collect and pay their GST to the ATO.
As Household Harriet is not making supplies of low value imported goods, they will not be eligible for simplified GST registration.
End of exampleSee also LCR 2018/2 GST on supplies made through electronic distribution platforms.
EDP responsible for GST
If an EDP operator is responsible for GST, they need to ensure their tax information is included on customs documents when goods are imported into Australia. This means EDP operators may ask you (as the merchant) to ensure that particular information is included on these documents, such as their GST registration number.
While EDP operators are generally responsible for GST, we recommend you talk to them about:
- their policies or terms of sale
- your pricing, receipts or business systems
- how they differentiate consumer and business sales
- effects of returned goods and refunds
- giving GST information to transporters or customs brokers.
If you are a merchant who makes sales through both your online store and through an EDP, you may be required to register for GST. Although you do not include the sales you make through the EDP, you will need to register if the value of the sales from your online store meet the GST registration turnover threshold of A$75,000.
Explains GST if you're a non-resident business selling imported services, digital products and low value imported goods (that is, you are a merchant).