GST and 'drop shipping'
If your business drop ships goods to Australian customers, then there are new GST rules for sales of low-value imported goods up to $1000 from 1 July 2018.
New GST rules dealing with sales of low value imported goods (those valued at $1,000 or less) to consumers in Australia will come into effect from 1 July 2018. This may also affect Australian GST-registered suppliers (including Australian retailers) who 'drop ship'.
'Dropshipping' refers to sales of goods that are located overseas at the time of sale and shipped directly to consumers in Australia from an overseas source. Currently, these sales do not incur GST.
However, from 1 July 2018, the changes to the GST treatment of low value imported goods means that Australian retailers should treat these sales the same as other domestic sales and apply GST at the point of sale. The changes will ensure goods sourced domestically and from overseas receive the same GST treatment when sold to consumers in Australia.
Any Australian suppliers currently not registered for GST will need to include drop shipping sales when determining if they are required to register.
As always, if you're not sure whether you should be registered for and charging GST, please give us a call on 02 9957 4033.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.