A comprehensive guide to deferred GST for imported goods in Australia

Goods and Services Tax (GST) is a broad-based 10% tax on most goods, services and items sold or consumed in Australia. For businesses, it is a key component of compliance and financial management.

By Ro Elvinia

Registration is mandatory for businesses with a GST turnover of $75,000 or more. If your business is registered for GST, you are responsible for collecting GST (one-eleventh of the sale price) from your customers and remitting it to the Australian Taxation Office (ATO), which serves as the principal revenue collection agency for the Australian government. In addition to this obligation, GST-registered businesses benefit from the ability to claim credits for GST paid on goods and services purchased or imported for business use.

GST on Imported Goods
Most goods imported into Australia are subject to GST, whether they are imported by a business, organisation or private individual. The GST payable on taxable importations is calculated as 10% of the total value of the import, which includes:

  • the customs value of the goods
  • any customs duty payable
  • the amount paid or payable to transport the goods to their place of consignment in Australia
  • the insurance cost for that transport
  • any wine tax payable.

Under standard procedures, GST on imported goods is collected by the Department of Home Affairs and must be paid before the goods are released.

Deferred GST as a cash flow solution for importers
The Deferred GST (DGST) scheme offers an alternative for GST-registered businesses, allowing them to defer payment of GST on taxable importations until the first activity statement is lodged after the goods are imported. This scheme alleviates the upfront financial burden of paying GST upon import, freeing up capital for other business operations.

For instance, if business imports goods valued at $20,000, the standard upfront GST payment of $2,000 (10%) can be postponed by enrolling in the DGST scheme. Instead of paying the GST immediately, the amount is included in the next GST filing (Business Activity Statement or BAS).

Assume the business generates $33,000 in sales during the same period, collecting $3,000 in GST from its customers. The GST liability to the ATO is calculated as follows:

  • GST Due ($3,000) = GST Collected on Sales ($3,000) + DGST ($2,000) – GST incurred on Purchases ($2,000).

The DGST scheme thus provides businesses with a smoother cash flow by aligning GST payments with business activity cycles.

Eligibility for the DGST scheme
To enrol in the DGST scheme, businesses must meet the following criteria:

  • Hold a valid Australian Business Number (ABN)
  • Be registered for GST in Australia
  • Lodge activity statements online.
  • Lodge activity statements monthly (quarterly lodgers must switch to monthly reporting).
  • Make activity statement payments electronically.
  • Enter goods for home consumption under customs requirements.

However, businesses may be deemed ineligible if:

  • They or their associates are not up to date with tax lodgements or payments.
  • They or their associates have been convicted of or penalised for specific tax offences in the past three years.

Deferred GST obligations and compliance
Enrolled businesses must adhere to the following requirements:

  • Lodge BAS online through portals such as myGov, the Business Portal or via a registered tax agent.
  • Ensure timely lodgement and payment of all BAS to avoid withdrawal from the scheme.
  • Maintain accurate records and meet all compliance obligations to prevent penalties.

If a business fails to meet these requirements, it risks being removed from the DGST scheme.

The role of GST credits
Businesses using deferred GST can claim GST credits for any GST paid on imported goods if those goods are used in business operations. These credits can offset GST collected on sales, reducing the net GST liability to the ATO.

Benefits of the DGST Scheme
Below are the benefits of the DGST scheme:

  • Delaying GST payments provides businesses with additional liquidity.
  • Integrating deferred GST into activity statements reduces administrative complexity.
  • GST payment schedules align with revenue generation, easing financial strain.

Why you need a tax agent for DGST enrolment
Australia’s GST legislation and compliance requirements are intricate. Errors or non-compliance can lead to penalties, audits or withdrawal from the DGST scheme. An expert registered tax agent can help navigate these complexities.

At ABN Australia, we specialise in:

Achieve success and stay compliant with ABN Australia as your trusted partner
Deferred GST is a valuable tool for importers to manage cash flow and enhance compliance. However, navigating the application process and meeting ongoing obligations requires expert knowledge and precision.

With ABN Australia's long-standing history and commitment to simplifying complexities, you can trust us to guide your business through every step of the DGST process.

Contact us today at connect@abnaustralia.com.au to learn how we can assist you with applying for DGST, complying for GST and all aspects of managing your tax. With nearly 50 years of experience, ABN Australia can your trusted partner for success and compliance in the Australian market.

Published: 08th Aug 2025 | Last updated: 08th Aug 2025

About the Author

Ro Elvinia is ABN Australia's Customer Success and Marketing Manager. She holds a bachelor’s degree in mass communication, majoring in journalism, and also has an academic background in civil engineering. With over a decade of experience in professional writing and a background spanning journalism, Australian immigration, and business services, Ro brings a unique mix of communication and analytical expertise. She works closely with international clients and contributes to ABN Australia's content strategy, helping global businesses stay informed and confident as they navigate the Australian market.