Importing Containers/parts/new Products - Questions..

[Angus Smart]

Hey,

I'm about to start importing containers of new product. (Nothing car related at all)

i will have a rather big gst payable on importation (somewhere around 8k) i've asked a question to my import broker about cutting costs down somewhere or anywhere and he mentioned deferred gst and setting it up.. i've gone to the ato website and cant find what its actually about.

anyone here can shed some light on it?

Cheers

[Angus Smart]

Also gst credits? can someone explain this if they can??

cheers

[R33GTRKid]

Firstly you will need to register for GST for this and you do that if you expect to earn more than $50k per year.

You need to understand that you do not pay GST when you sell a taxable supply (good or provide a service), you collect it from your customer on behalf of the government. You only pay GST when you buy a taxable supply.

So if you sell a good to someone for $100, you have to charge an additional 10%, which is the GST component, so you collect $110 from the customer. $100 is your revenue and $10 is the GST you collect for the government.

When you buy $100 fuel to run your car to deliver your goods, you pay $91 to the fuel station and $9 in GST that the fuel station collects on behalf of the government.

The $9 you pay to the servo is a GST input credit for your business and is recorded on your BAS as GST you have paid out to others in running your business.

So if you pay $9 GST on petrol and sell something for $110 and collect the $10 GST, you will effectively have a $1 GST liability for the period and you pay $1 to the government.

Deferred GST is where you apply for an exemption to pay the GST that you collect for a set period of time, you do not get this money for free rather you have to pay it back later and after you have had a chance to rack up some GST input credits to reduce your liability to pay.

DISCLAIMER: I am a lawyer NOT an accountant or tax specialist, the above is not intended nor should be taken as advice specific to your situation and you should not make any decisions based upon it - that is you should obtain your own independent advice from an accountant..... haha

Edited November 13, 2008 by R34kid

[Angus Smart]

haha disclaimer..

cheers for that. so at the end of the day the gst likes to put its arm elbow deep up my ass..

so after selling the product we would really have paid gst twice. (tho the customer pays the second lot)

[elrodeo666]

What if the business is based offshore. e.g based in Japan but importing goods to australia and being paid oz dollars.

Or other scenario money being payed to offhore account and having virtual offshore business address.

Andrew how good nick is the head??

[Beer Baron]

anything imported to australia is liable for any applicable import duty (different for different things from different countries) and GST. it doesn't matter if you are offshore, with offshore accounts and business registration. you simply need to pay those costs at the time of entry for the product/parts/cars.

[R33GTRKid]

haha disclaimer..

cheers for that. so at the end of the day the gst likes to put its arm elbow deep up my ass..

so after selling the product we would really have paid gst twice. (tho the customer pays the second lot)

no you have not paid it at all:

when you sell something, the customer pays the GST which you collect for the government.

When you pay someone else out, you pay them the GST but then you get to claim it as an input credit in your business which means you do not have to pay the government what your customer as already paid you (assuming they are equal).

[autoworx]

to defer your tax laibility for imported goods at the time of arrival you need a turnover of 20million or more per year

and then you get to defer it to a pay monthly scheme

[Angus Smart]

What if the business is based offshore. e.g based in Japan but importing goods to australia and being paid oz dollars.

Or other scenario money being payed to offhore account and having virtual offshore business address.

Andrew how good nick is the head??

Is sold

[Angus Smart]

no you have not paid it at all:

when you sell something, the customer pays the GST which you collect for the government.

When you pay someone else out, you pay them the GST but then you get to claim it as an input credit in your business which means you do not have to pay the government what your customer as already paid you (assuming they are equal).

yeah yee i got you

we wont be doing much paying anyone over here, we're mainly just importing goods and wholesale.

factory rent will be free (hopefully) and most other costs will also be within us, i guess transport will be one of the costs we're paying..

but i see that everything else we spend (even if its not business related ) we will get the gst back? thats what your saying?

i should really see an accountant, but i still get lost in their words!