A few Speedy Practices LESSONS FOR AUSTRALIAN SMES

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Despite being just about the most attractive export markets in Asia Pacific, Australia isn’t always the simplest location to conduct business. In terms of cross-border trade, the continent ranked 91st out of 190 countries on the planet Bank’s Simplicity of Conducting business report for 2017 – well below other regional powerhouses like Singapore, Hong Kong, and Japan. To achieve Australia, goods-based businesses need to have a solid knowledge of how its numerous customs and trading rules affect them.


“The best bet for many Australian businesses, particularly logistics lessons, is always to make use of a logistics provider who can handle the heavier complexities with the customs clearance process for the kids,” says Ben Somerville, DHL Express’ Senior Manager of Customs & Regulatory Affairs for Oceania. “With a little effort though, anyone can learn an ample amount of basic principles to adopt their cross-border operations one stage further.” Allow me to share five quick lessons to have any organization started:

1. GST (as well as deferral)

Most Australian businesses will face the 10% Products and services Tax, or GST, about the products you can purchase as well as the goods they import. Any GST that a business pays may be claimed back as being a refund from Australian Tax Office (ATO). Certain importers, however, can simply never pay the tax rather than the need to claim it back, under what the ATO identifies as “GST deferral”. However, your small business have to be registered not merely for GST payment, but in addition for monthly Business Activity Statements (BAS) to become qualified to apply for 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 modify onto monthly BAS reporting, particularly those that have stuck with the greater common quarterly schedule up to now.”

Duty is 5% and refers to goods value while GST is 10% and pertains to amount of goods value, freight, insurance, and duty

SMEs must be sure they understand the real difference between duties and also the GST.

2. Changes for the LVT (Low Value Threshold)

Until recently, Australia had the highest Low-Value Threshold (LVT) for imported goods in the world, exempting most components of $1000 and below from GST. That’s set to switch from 1 July 2018, as the Authorities looks to scrap the LVT for all those B2C (read: e-commerce) imports. B2B imports and B2C companies with lower than AU$75,000 in turnover shouldn’t be affected by the modifications.

“Now that the legislation continues to be undergone Parliament, Australian businesses should start be prepared for the alterations sooner rather than later,” counsels Somerville. “Work using your overseas suppliers on becoming a member of a Vendor Registration plate (VRN) with the ATO, familiarize yourselves with how to remit GST after charging it, and make preparations to include it into the pricing models.”

The new legislation requires eligible businesses to register with all the ATO for the Vendor Number plate (VRN), employed to track GST payable on any overseas supplier’s goods. Suppliers lead to GST payment towards the consumer on the Pos, then remitting it on the ATO on a regular basis.

3. Repairs and Returns

“Many businesses visit us with queries about whether they’re accountable for import duty and tax after they send the products 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 must inquire is: do you think you’re conducting the repairs under warranty?”

Should your business repairs or replaces a product as part of its warranty obligations, you pay neither duties nor taxes for the product – providing your documentation reflects this. Are the words “Warranty Replacement” or “Repair”, record the item’s value as “No Charge”, and make sure you will still enter a “Value for Customs” – everything you paid to produce the item originally – in your documents.
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