The deferred GST scheme allows clients who are importers to defer the payment of GST on all taxable importations into Australia, provided they meet the eligibility criteria, including lodging BAS statements monthly and are up-to-date with their tax returns.
“It is a cash flow-saving exercise for your client. It is simply that you are deferring the GST that is charged at the time when the goods are at the wharf,” said Institute of Certified Bookkeepers technical resource manager Chris McComb.
“You don’t have to pay the GST upfront; it allows you to get the goods, go and sell it, have some cash flow to pay the GST when it comes on your next BAS.”
Responding to a question at the ICB National Conference on the inability to check if their client was claiming a double import GST, executive director Matthew Addison said it was often too difficult to reconcile the amounts.
“When the deferred scheme first came out, we tried to work out with the tax office how you can reconcile what they gave you as 7A versus what was happening, and we gave up,” said Mr Addison.
“The ability to reconcile what the customs told the tax office, which is the deferred GST amount, compared to what was going on in the business, you can’t reconcile that. That’s timing issues going on, there are all sorts of things going on.
“If your clients are deferring GST, accept the deferred GST. Don’t pay it to customs, and when it comes through on the BAS, use their number and move on,” he added.
“We, as bookkeepers, we like the R word, we like to reconcile – GST deferred is one of those ones I’m telling you don’t bother because we’ve seen cases where it’s not doable.”