GST and drop shipping
Posted by Northadvisory on February 6, 2020
Article shared from the ATO.
If you use drop shipping for your business, GST will apply to sales of low value imported goods valued at $1,000 or less.
‘Drop shipping’ refers to the sale of goods located overseas at the time of the sale and sent directly to consumers in Australia from an overseas source, such as the manufacturer, wholesaler or warehouse.
Australian retailers should treat these sales the same as other domestic sales and apply GST at the point of sale.
Imported goods valued above $1,000, as well as all tobacco products and alcoholic beverages, continue to have GST applied at the Australian border.
Australian suppliers not registered for GST must include drop shipping sales when working out if they need to register. You must register for GST if your turnover is $75,000 or more in a 12-month period.
ATO’s commitment to you
We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.
If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.
Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.
If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice. Read more Financial Industry articles.
© Australian Taxation Office for the Commonwealth of Australia