A few Speedy Practices LESSONS FOR AUSTRALIAN SMES

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Despite being the most attractive export markets in Asia Pacific, Australia isn’t always the simplest destination to conduct business. In terms of cross-border trade, the continent ranked 91st beyond 190 countries on earth Bank’s Simplicity of Doing Business report for 2017 – well below other regional powerhouses like Singapore, Hong Kong, and Japan. To be successful in Australia, goods-based businesses need a solid knowledge of how its numerous customs and trading rules connect with them.


“The best choice for the majority of Australian businesses, particularly logistics lessons, would be to start using a logistics provider who is able to handle the heavier complexities from the customs clearance process on their behalf,” says Ben Somerville, DHL Express’ Senior Manager of Customs & Regulatory Affairs for Oceania. “With a little effort though, anyone can learn enough of the basics to take their cross-border operations one stage further.” Here are five quick lessons to get service repair shop started:

1. GST (and its particular deferral)

Most Australian businesses will face the 10% Services and goods Tax, or GST, for the products you can purchase as well as the goods they import. Any GST which a business pays may be claimed back like a refund from Australian Tax Office (ATO). Certain importers, however, can merely not pay the tax rather than the need to claim it back, under just what the ATO identifies as “GST deferral”. However, your small business must be registered not just for GST payment, but in addition for monthly Business Activity Statements (BAS) being entitled to deferrals.

“You don’t reduce any costs by deferring your GST, but you do simplify and streamline your cash-flow,” advises Somerville. “That may prove worthwhile for businesses to exchange onto monthly BAS reporting, specifically those who may have saddled with the more common quarterly schedule until recently.”

Duty is 5% and applies to goods value while GST is 10% and applies to quantity of goods value, freight, insurance, and duty

SMEs need to ensure they know the gap between duties along with the GST.

2. Changes on the LVT (Low Value Threshold)

Until recently, Australia had the best Low-Value Threshold (LVT) for imported goods in the world, exempting most pieces of $1000 and below from GST. That’s set to alter from 1 July 2018, as the Govt looks to scrap the LVT for all B2C (read: e-commerce) imports. B2B imports and B2C companies with under AU$75,000 in turnover shouldn’t have the modifications.

“Now that this legislation may be undergone Parliament, Australian businesses should start getting ready for the changes sooner rather than later,” counsels Somerville. “Work with your overseas suppliers on subscribing to a Vendor Registration Number (VRN) using the ATO, familiarize yourselves with the best way to remit GST after charging it, and prepare to incorporate it into your pricing models.”

The brand new legislation requires eligible businesses to subscribe together with the ATO for the Vendor Registration Number (VRN), accustomed to track GST payable on any overseas supplier’s goods. Suppliers are responsible for GST payment for the consumer in the Pos, then remitting it towards the ATO often.

3. Repairs and Returns

“Many businesses arrive at us with queries about whether they’re accountable for import duty and tax when they send their goods abroad for repair, or receive items away from overseas customers for repair or replacement,” says Mike Attwood, Customs Duty Manager at DHL Express Australia. “The key question we have to question them is: have you been conducting the repairs under warranty?”

If the business repairs or replaces something in its warranty obligations, you pay neither duties nor taxes about the product – as long as your documentation reflects this. Are the words “Warranty Replacement” or “Repair”, record the item’s value as “No Charge”, and make certain you’ll still enter a “Value for Customs” – whatever you paid to make the item originally – in your documents.
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