10 Aug 2015 How to Apply for a Deferred GST
With a good chunk of the construction and furniture industry dependent on the importation of materials from other countries, the delayed or deferred goods and services tax (DGST) scheme is a welcomed development. The scheme was officially implemented on the 1st of July 2015. This means that as an importer of goods, a company can defer payment of GST on all importations into Australia.
Applying for a DGST status can be done online. Application forms are available on the Australian Taxation Office (ATO) website: https://www.ato.gov.au/Forms/Approval-to-defer-GST-on-imported-goods/.
While the construction and furniture industry is still largely dependent on local supplies, some companies have opted to outsource or import their materials. This trend is slowly increasing because of the strength of the Australian dollar, especially in previous years, despite fluctuations during the first half of this year. A 10% reprieve in Goods and Services Tax will be good for the construction and furniture industry after five years of not-so-robust or consistent earnings.
A DGST would mean enough time for furniture manufacturing and construction firms to take a breather just until the Australian and world economy settles. Requirements to be DGST eligible are as follows:
- Have an Australian Business Number (ABN)
- Be GST registered – ABN and GST registration can be jointly applied in one form
- Report activity statements online
- Lodge activity statements monthly
- Electronically pay activity statements
- Are up-to-date with tax returns or payments
- Legally clean in the last three years
The ATO have identified the most common errors that should be avoided:
- Incorrectly accounting for the on-sale of imported goods
- GST liability for installing and assembling imported goods
- Incorrectly classifying exports
- Incorrect reporting of non-resident refunds
- Non-residents and non-deductible expenses
Resources
- http://www.australianfurniture.org.au/news/are-you-an-importer-using-the-deferred-gst-scheme
- http://www.agriculture.gov.au/import/timber
- http://www.business.gov.au/business-topics/business-structures-and-types/industry-factsheets/Pages/retail-wholesale-trade-industry-fact-sheet.aspx
- http://www.industry.gov.au/industry/IndustrySectors/woodenfurniture/Pages/Opportunities-to-improve-business-health-in-the-Australian-furniture-industry.aspx
- https://www.ato.gov.au/Business/GST/In-detail/Rules-for-specific-transactions/International-transactions/Easy-steps-to-the-deferred-GST-scheme/
- http://www.max360.com.au/documents/ai-group-survey-report-recent-trends-in-imported-inputs-in-australian-industries-september-2012.pdf