Yes, that's a simplified way of looking at it. In reality, what is happening is that the supplier is charging you the extra 10% GST and then paying it to the Tax Office on your behalf. Whether you realise it or not, one eleventh of the sale price is paid straight to the Tax Office when they lodge their next Business Activity Statement (BAS).


<!--QuoteBegin-McMullet@Dec 9 2005, 09:24 AM
I don't know how they're going to tax the supplier when he/she/it is in the US, but even if they don't, you might have to pay customs duty anyway.[/quote]
This is just the problem. Overseas suppliers never charge you the GST, never lodge a BAS and never pay any money to the Tax Office. This is why Customs is empowered with the task of charging you GST. What generally happens, is the freight company pays the GST (and customs duty) on your behalf and then sends you a bill. As I mentioned earlier, due to administrative economics, items of lesser value will not be charged GST and you will not receive a bill.

BTW, McMullet, I like your sig!

Thanks, Mark T

Well... my tax law lecturer said that once you pay for the item, it's the supplier's job to pay the GST to the tax office. I'm assuming he meant for items supplied in Australia. We didn't really cover GST in the course because we didn't have enough time so we just skimmed throught it.

If you don't mind me asking, Mark T, what line of work are you in to be so knowledgeable about tax?

I'm a Chartered Accountant (Number one in numbers!).

If you want to know what you are up for have a look at http://www.customs.gov.au/webdata/resource...ort_export1.pdf

it explains about import duty and gst etc. I was looking at importing some electronics for my boat but changed my mind when I realised all the extra charges ie. freight,duty payable on goods+freight costs then gst payable on goods+freight+duty. No wonder there is a budget surplus to go with our trade deficit.

It applies if you import it REGARDLESS as no sales tax has been paid in Australia. I was not expressing an opinion but stating a fact.

kim

Ahhh... my hero.
When I grow up, I wanna be just like you. :P

Mark T is correct is terms of the application of GST on items imported from overseas and the role customs plays in collection said tax on behlf of the ATO.

There are two additional points worth noting, one of which isn't particularly applicable in this instance. The first is that the duty/GST varies depending on whether the item is brought into the country via freight or mail. For the former (from memory) you need only have a value above AUS$200 and duty/GST is applicable. If it's via mail (i.e. takes 4 to 6 weeks to arrive) the value threshhold begins at AUS$500.

Obviously a PowerMac is above both values so duty/GST is going to relevant. The second point worth mentioning therefore is that said costs are calculated based on the Australian value of the goods and not what you paid for them in the US. So if the receipt is included, and should customs have sufficient gusto to do call up Apple (or jump online), they can work out the Australian cost of your product and charge accordingly. It's not always just a case of converting the dollar amount on the invoice.

So when determining if your saving by purchasing overseas add in a $100 customs brokerage fee, 10% GST on the Australian value of your item, any appplicable duty on IT/electrical goods and the cost of freight itself.