Forwarders now looking to relief from taxing burden

Assistant treasurer Chris Bowen said the changes to GST administration, following a Board of Taxation review that included duty items, would apply from July 1.
“I have asked the board to undertake a review of the application of the GST to cross-border transactions and consult widely with stakeholders,” Mr Bowen said.
The deadline for submissions is June 17 this year.
Though it was early in the process and details were yet to be worked through, Australian Federation of International Forwarders (AFIF) chief executive Brian Lovell welcomed the move.
“While some issues such as retrospectivity have not been defined and, while these issues are subject to comment through submissions and an approval process, this news should be viewed as extremely positive because we will finally achieve some clarity and certainty in the consistent application of GST for our industry sector,” Mr Lovell said.
A Treasury discussion paper on the issue said the government’s intention was to reduce compliance costs “within the existing broad policy framework”.
Currently, GST is payable on all taxable imports and the value of the goods for this purpose is determined by calculating the Value of Taxable Importation (VoTI).
The VoTI includes the value of the international transport to the place of consignment.
For non-postal imports, the place of consignment for goods is the port or airport of final destination as indicated on the transportation document.
GST on taxable importations is paid by the importer or agent at the time of passage.
The government proposes to shift the payment burden from the domestic transport supplier to the goods themselves.
Freight would be GST-free when the service is provided as part of an international transport service to a non-resident entity.
“It is expected that adding the value of domestic transport into the VoTI calculation will require some changes to Customs’ Integrated Cargo System and related recording systems,” the Treasury discussion paper said.
The place of export for containerised goods will be changed from where the boxes are stuffed to where the transport company picks it up.
The need for the domestic subcontract service suppliers to know the ultimate destination of the goods they carry, in order to give separate GST treatment in cases where the goods are ultimately destined overseas, will be removed.