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GST and Importation (Australia) Procedures

Parent Policy

Goods and Services Tax (Australia) Policy

GST is payable on most goods imported into Australia. Customs release the goods after payment of any customs duty or other charges, including GST. The up-front GST component is then claimed back from the ATO by the University in the next monthly BAS.  This procedure relates to custom agent invoices, not the original asset purchase.

Definition of terms

ATO: Australian Taxation Office
GST: Goods and Services Tax as defined in A New Tax System (Goods and Services Tax) Act 1999
Taxable Importation: Goods imported into Australia on which GST has been levied
Capital Import: An imported asset valued at more than $5,000
Value of Taxable Import: The sum of the customs value of the imported goods, the amount paid or payable for the international transportation of the goods to their place of consignment in Australia and to insure the goods in transport, to the extent that the amounts are not already included in the customs value, and any customs duty payable in respect of the importation of the goods.
Custom Agent Invoice: Invoice issued by customs agent when goods are imported into Australia

Processing Imports in SAP

  •  All imports of goods, except for capital imports, are to be allocated a SAP tax code of P0 (GST Free Purchases - 0%).
  • Imports of a capital nature are to be allocated a SAP tax code of P5 (GST Free Asset Acquisitions - 0%) in addition to the account assignment "A" denoted when raising purchase orders.

Responsibility

Purchaser

Custom Agent Invoices

  • Tax invoices are not required for taxable importations. However, there must be relevant documentation issued by customs (rather than the supplier) to support input tax credit claims. The GST component that is calculated on the value of taxable import must be included in addition to the regular custom duty charge.

Responsibility

Purchaser

Posting Rules

The treatment of related importation expenses is set out in the table below, including the use of tax codes and general ledger accounts to be used for the various expenses:

Expense

GST Status

Tax Code

General Ledger Code

Freight Collected

GST Free

P0

738022

Quarantine Duty

GST Exempt

P8

743041

Customs Duty

GST Exempt

P8

743041

Terminal Fee

GST (10%)

P1

743041

Postage/ Petties

GST (10%)

P1

743041

Agency & Attendance

GST (10%)

P1

743041

Quarantine Attendance

GST (10%)

P1

743041

Cartage/Freight

GST (10%)

P1

738022

GST on Importation

GST Exempt

P8

743040

Responsibility

Purchaser

  • The GST on imported goods must be differentiated from the GST that is a component of the custom duty regular charge. Only GST on imports should be charged against account 743040. Regular customs charges must be processed as normal.

Responsibility

Department Finance Officer

  • Postings to account 743040 will remain as an expense in the departmental fund until the end of the month when legitimate GST charges will be transferred to a central control account to be claimed back from the ATO.  Invalid postings will remain as an expense in the departmental fund.

Responsibility

Taxation Accountant (GST)

Payment of Custom Agent Invoice Using a Purchase Order

  • When paying the custom agent invoice with a purchase order, different line items must be created to match the different components of the tax invoice and to reflect the correct GST status of each component.
  • Material code 10000710 "GST Paid - Imports" must be used for the pure GST component charged on imports.
  • Material code 10000339 "Customs Duties & Agent Fees" must be used for other duty and customs agent fees
  • At the goods receipt and invoice verification stages the "Doc. Header Text" field should be populated with the custom agent name, the month, the purchase order number for the original imported goods that the GST relates to, and either the word “asset” if the imported goods are an asset or “consume” if the goods are consumable items.  For example:  DHL_July_45486777_Asset or Fedex_July_454876666_Consume

Responsibility

Department Finance Officer

Payment of Custom Agent Invoice using the Corporate Credit Card System

  • When processing custom agent invoices using the Corporate Credit Card System the ‘customs’ expense category must be used and indication must be given if the original import relates to an asset.

Responsibility

Corporate Card Officer

Payment of Custom Agent Invoice through a Claim Form

  • On receipt of the Customs Agents invoice, an appropriately authorised claim form must be completed with all importation documentation attached and forwarded to Corporate Finance for processing.
  • Items on the custom agent tax invoice should be costed according to the nature and GST status of the different charges on the invoice.
  • The narration on the claim form should include the custom agent name, the month, the purchase order number for the original imported goods that the GST relates to and either the word “asset” if the imported goods are an asset or “consume” if the goods are consumable items.  For example:  Fedex _July_454876666_Consume or DHL_July_45486777_Asset

Responsibility

Departmental Finance Officer

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Version Number: 1.0Effective Date: Contact: adm-PolicyBank@monash.edu