GST GUIDE FOR IMPORTERS & EXPORTERS GUIDE FOR IMPORTERS & EXPORTERS CONTENTS BASIC CONCEPTS q Scope of GST q What is a Supply? q Supplies connected with Australia [9-25] q Taxable

GST GUIDE FOR IMPORTERS & EXPORTERS

CONTENTS

BASIC CONCEPTS

q Scope of GSTq What is a Supply?q Supplies connected with Australia [9-25]q Taxable suppliesq GST Free Supplies [Div 38]

IMPORTATIONS

q Taxable Importationsq Non -Taxable Importationsq Calculation of GST on Importsq Deferral of GST Payments

COMMERCIAL ISSUES FOR IMPORTERS

q Cash Flow for Importersq New 2000 overseas ordersq Advance Entriesq Entry Preparation

OTHER ISSUES

q Australian Business Number (ABN)q Transitionalq Miscellaneous

CLIENT SEMINAR

q Industry exclusiveq Expression of Interest

BASIC CONCEPTS

SCOPE OF GST

GST is payable on taxable supplies and taxable imports [7-1(1)].

You must pay the GST payable on any taxable supplies that you make [9-40].

You must pay the GST payable on any taxable importation’s that you make

[13-15].

WHAT IS A SUPPLY?

A supply is any form of supply whatsoever and includes [9-10],

- a supply of goods,

- a supply of services,

- a provision of advice or information,

- a financial supply.

SUPPLIES CONNECTED WITH AUSTRALIA [9-25]

Supplies of goods wholly within in Australia.

Supplies of goods from Australia.

Supplies of goods to Australia if the supplier,

- imports the goods into Australia; or

- installs or assembles the goods in Australia.

Supplies of real property located in Australia.

Supplies of anything else if,

- The thing is done in Australia

- The supplier makes the supply through an enterprise that the supplier carries on inAustralia

TAXABLE SUPPLIES

A supply is a taxable supply if;

- It is made for consideration [9-15], and

- It is made in the course of carrying on an enterprise or business [9-20], and

- It is connected to Australia [9-25], and

- The supplier is registered for GST or required to be registered [Division 23].

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

GST FREE SUPPLIES [DIV 38]

These include,

- Basic foods [38-A]

- Medical aids and appliances [38-45]

- Cars for use by disabled people [38-P]

- Goods for Exports [ 38-E]

- International transport [38-K]

Basic foods [38-A]

As outlined in the table contained in Attachment A . The table is set out in 3 x columns.

- Column 1 gives a general description of the foodstuffs

- Column 2 gives a description of GST FREE foods

- Column 3 gives a description of TAXABLE foods.

Medical Aids and appliances

- Refer to Section 38-45 for detailed overview

Cars for use by disabled person

- Refer to Section 38-P for detailed overview

Goods for Exports [38-E]

The supply of goods where the goods are exported is GST free, including,

- Item 1 General exports of goods

- Item 5 Goods that are to be consumed on international flights or voyages

- Item 6 Goods used to repair, renovate, modify of treat other goods

[38-185(1)]

GST free treatment of exports is not automatic, and will be necessary to consider

the detailed conditions for the relevant items in Section 38-E.

International Transport [ 38-K]

Under the current GST Act, transport services which are effectively consumed overseas will beGST free. This will cover, for example, the transport of passengers or goods;

1) from a place in Australia to a place outside Australia

2) from a place outside Australia to a place in Australia

3) from a place outside Australia to another place outside Australia

The transport, loading or handling of goods within Australia will also be GST free if it is an integralpart of the supply of transporting goods to or from Australia and is provided by the same supplierwho transports those goods to or from Australia.

Currently, insurance, and the service of arranging insurance and/or defined 'overseas' transportof goods (for example, freight forwarders) and passengers, including those at 1 - 3 above, will beGST free.

There are amendments to the GST legislation before Federal Parliament which will further clarifythe circumstances in which transport services will be GST free.

If implemented, the legislation will provide GST free treatment for;

5 Transport etc.of goods

the international transport of goods:

(a) from their place of export in Australia

to a destination outside Australia; or

(b) from a place outside Australia to their place ofconsignment in Australia; or

(c) from a place outside Australia to the sameor another place outside Australia.

However, paragraph (a) or (b) only applies to thetransport of the goods within Australia if it issupplied by the supplier of the transport of thegoods from or to Australia (whichever is relevant).

Under the amendments, arranging the 'international transport' of goods and arranging insurancefor such transport will be considered GST free

Transport services provided within Australia, which do not satisfy the conditions for GST freetreatment will be subject to GST.

The place of export, that is, the point after which the provision of a transport service becomesGST free, will have the same meaning as for Customs purposes. Basically, the “place of export”means when the goods are on the Aircraft or Vessel. A shipping Container (FCL) is to beregarded as the vessel.

Practical Impact

# Scenario A

Where the exporter has his consignment loaded into a FCL at HIS premises, and All PortsInternational Logistics is the supplier of the transport for exports of goods to or from Australia, thetransport of those goods within Australia will be GST free provided it is supplied by All Ports. Thatis, All Ports will not charge GST on its fees to the exporter for the domestic transport service.

This means that you may have a consignment arranged for final destination in Adelaide on a thrubill of lading and the movement sees cargoes arrive and discharge into say Brisbane with landmovement to Adelaide. Where this movement is on a thru bill of lading then the land componentof GST is the responsibility of the international carrier.

However, if the goods discharge in Brisbane as final place of destination and you then decide torequest movement of cargoes to Adelaide, then the local land costs will indeed attract GST whichmust be charged to the Importer.

# Scenario B

If All Ports does not transport goods from Australia, but transports the goods within Australia priorto export, or it engages a trucker/local cartage contractor to carry out that task, GST will beapplicable to the charge for the transport service.

If a contractor charges All Ports GST in respect of the transport service, All Ports will claim aninput tax credit for that GST on its next GST return.

All Ports will charge GST on the cost of the local transport service to the exporter, who will beentitled to claim an input tax credit for the GST included in All Ports invoice for the transportservice.

IMPORTATIONS

TAXABLE IMPORTATIONS

These will include Importations into Australia of goods that are entered for home consumption[Div 13].

Goods entered into Customs Bond (N20 entry), do not pay GST at this time, but will attract GSTon at time of an ex-warehouse (N30 entry).

Other Importations for which the Customs Act does not require an entry, but which may also beconsidered taxable importations, include;

q Accompanied baggage

q Low value goods ( less than A$250 for Air & Sea, less than A$1000 for Parcel Post)

q Weekly settlement

q Inwards duty free

q Temporary Imports under S162 or S162A

NON-TAXABLE IMPORTATIONS

An importation of goods will not be taxable, where the goods are covered by one of the followingItems from Schedule 4, to the Customs Tariff Act [41-5(1)].;

Items 17, 18A, 18C, 21 (TEXCO Scheme), 23A, 23B, 24, 25A, 25B, 25C, 32A, 32B, 33A, 33B, or34

One of the amendments currently before Federal Parliament is a proposal to add Item 64 to thelist of Schedule 4 Items. (Attachment B provides a more detailed explanation of what the aboveitems cover.)

Goods imported or purchased by overseas travellers which are covered by

Item 15 to Schedule 4 [42-15] (which covers travellers current limit of A$400 duty free concessionwhen returning to Australia), will be non taxable importations.

Goods that would have been GST free or input taxed supplies if they had been a supply [13-10(b)] will also be considered non taxable importations.

CALCULATION OF GST ON IMPORTS

GST is calculated as 10% of the value of the taxable importation [13-20(1)]

The value of taxable importations will be based on the following.

q Customs Value + [13-20(2)(a)]

q Customs Duty + [13-20(2)(c)]

Amount paid or payable to transport the goods to Australia and insure the goods for thattransport1[2] {13-20(2)(b)].

DEFERRAL OF CUSTOMS DUTY

GST is payable at the same time, at the same place and in the same manner as Customs Duty ispayable on imported goods (or would be payable if the goods were subject to Customs Duty) [33-15(a)], or within such further time and at the place and manner specified in the Regulation [33-15(b)]. That is, GST is payable at the customs barrier in Australia or at a later stage.

The Australian Taxation Office (ATO) and Customs have developed a GST Deferred PaymentScheme in respect of the GST payable on imported goods. Where importers meet the finalcriteria for entry into the Scheme, the following procedure is likely to occur in relation to theimportation of goods.

q The Customs Compile computer system will contain the Australian Business Numbers forimporters which have approval for the deferred payment of GST under the Scheme. Wheregoods are imported by such importers, the value of the GST due on particular entries will beprovided to the ATO.

q Importers with approval to defer GST payments on importations, will have a 30 day reportingperiod, that is, a Business Activity Statement ('BAS') will be lodged with the ATO which willcontain details of all deferred GST amounts on importations. These amounts will be input taxcredits and act as an offset against GST payable on taxable supplies by importers, with thenett value being remitted to the ATO. The only payment under the GST deferred PaymentScheme should be the remittance of the net GST to the ATO.

We have been advised that Importers shall be invited to submit applications for approval ofdeferred GST payments in February 2000. We have provided further details of the conditions &requirements for acceptance into the GST Deferred Payments Scheme (see Attachment C).

1[2] This includes ocean or air freight, overseas wharf fees, fumigation and other overseas borne charges associatedwith the movement of the goods from overseas origin that are NOT already part of the customs value. Local Australianport charges, clearance, fumigation etc do NOT form part of the taxable import value for customs entry purposes.

COMMERCIAL ISSUES

CASH FLOW FOR IMPORTERS

At the moment, the general rates of duty are 0%, 3%, 4% & 5% with some exceptions for theMotor Vehicle and Textiles & Footwear industries which currently attract higher ad-valorem ratesof import duty. With the imposition of a 10% GST, payments to Customs/ATO by some importerscould increase by up to 300%.

The Owner/Importer of the goods will obviously need to take into account such increases toensure that money is available for payment at time of arrival to gain subsequent release &delivery of individual consignments.

Acceptance into the GST Deferred Payments Scheme will readily assist with day to day cash flowmanagement. Such acceptance should make bank managers & financial controllers morecomfortable with individual outgoing expenditures and budget performances.

NEW OVERSEAS ORDERS - JUNE/JULY 2000

Orders required in the June/July period be carefully examined to determine if there is anyadvantage in arranging pre-GST arrival, or post GST arrival.

Importers may wish to consider the potential for delays as all parties involved in importtransactions seek to deal with the practical impact of the GST.

Although we believe that any delays are likely to be limited to the first few weeks of July, as allparties will seek to ensure that any problems are quickly overcome,

we will still be encouraging early pre-alert documents to be submitted to our office to allowpreliminary work on job registration, tariff classification, transshipment tracing, etc to becompleted well prior to the 1st July.

ADVANCE ENTRIES

Advance entries CANNOT be prepared for any goods which arrive after

12.00 am, 1 July 2000. Arrival means when the goods FIRST enter Australian waters, NOT theexpected arrival into port of discharge. Total Customs will have no choice to but hold thispaperwork until 1 July 2000 and then lodge entries with the GST due (assuming there is nodeferral).

For example, a vessel may be due in Melbourne on 2 July 2000, but calls to Brisbane first arrivingon 29 June 2000. In this case, we ARE able to prepare early entries as the vessel has arrived(BNE) prior to Midnight 30 June 2000.

ENTRY PREPARATION

We will now be required to calculate 2 x values;

q a value for Customs Duty purposes, with current criteria remaining un-changed, and

q a value for GST purposes.

Quantifying the GST value will require knowledge of price components, such as overseas freight– either collect or prepaid, overseas wharf fees, overseas insurance etc. Total Customs Serviceswill obviously be relying heavily on third parties (e.g. Shipping Lines) to provide this crucialinformation to our office for accurate preparation of individual customs entries.

This reliance needs to be clearly understood as there may be occasions where it is difficult toobtain the correct information and we may not be able to prepare a Customs entry until a vesselis close to arrival, regardless of how early we may have early pre-arrival paperwork from you.

We would suggest the following pro-active approach is taken as one means of assisting in earlyentry preparation, and subsequent early delivery to your premises.

At the present, Import clients of Total Customs Services have made arrangements with youroverseas suppliers to provide an FCL costs declaration whereby goods are packed at thesuppliers warehouse and certain inland overseas charges are itemised. This declaration hasassisted us in the past, and will do in the future, to calculate correct Customs Value for Dutypurposes whereby we deduct any fees accrued after the FCL has been packed for shipment.

We would strongly recommend that you request your suppliers to detail ALL overseas costs fromFactory onward – for ALL modes of consignment, for example, Air, LCL, Loose, FCL.

The required information can be easily included on the body of the overseas commercial invoiceand, if provided, would allow a large majority of entries to be prepared well in advance of vessel /air arrival into Australia. This suggestion would be quite relevant to any consignmentspurchased on a “C&F”, “CIF”, “FIS” basis.

It would also clearly assist with ”FOB” type transactions as we would have overseas charges pre-declared on the invoice and all we would then require is verification of International Freight &Insurance components.

This is a positive measure that can be implemented NOW with your suppliers, whilst we do notneed the information till July 1sT 2000, lets “train” the suppliers well in advance of YOURrequirements to ensure a seamless transition to GST.

Have your suppliers include the above details for all new consignments, then the procedure is inplace and critical time is not lost due to communications problems once the GST commences.

OTHER ISSUES

AUSTRALIAN BUSINESS NUMBER (ABN)

Entities that carry on an enterprise in Australia and have an annual turnover of $50,000 or moreper year will generally be required to register with the Australian Taxation Office for an ABN.

The ABN number will consist of 11 digits and incorporate your current ACN with the addition oftwo extra digits and, in most cases, will serve as an entity's GST number.

The objective of the ABN is to provide a single window for business to deal with the FederalGovernment regarding GST and several other taxes.

An ABN will allow businesses to participate in the GST system and claim credits for GST paid onacquisitions.

The Customs computer system will allow up to 14 digits for ABN, This will allow companies todistinguish different branches / sections within their own organisation if so required.

The ABN will replace current “owner code” for Customs entry purposes. The one ABN will be allencompassing for Customs / ATO reporting.

TRANSITIONAL ISSUES

Sales Tax Credits

Where sales tax has been imposed on goods held for sale or exchange as at 1 July 2000, a salescredit may be claimed by businesses that are registered for GST purposes.

Credits may also be claimed in respect of imported second hand goods on which sales tax hasbeen paid, if there was no basis for sales tax exemption to be claimed, and the goods were heldsoley for sale or exchange in the ordinary course of business.

Generally, a credit will not be available for;

q Stocks held for manufacturing,

q Stocks of most second hand goods,

q Goods held for hire or lease,

q Business consumables, and

q Alcoholic beverages.

MISCELLANEOUS ISSUES

Wine Equalisation Tax ('WET')

From 1 July 2000, the Government will impose a 29% WET on assessable dealings with grapewine, fruit & vegetable wine, cider, Perry, mead and sake.

The WET will be included in the net amount calculation (that is, to be remitted to the ATO), andwill be imposed on the last wholesale sale of the wine etc in Australia or an equivalenttransaction. Payment of the WET will be deferred through a system of quotation of ABN numbersto defer payment until the last wholesale sale.

Luxury Car Tax.

To offset the large reduction in sales tax on luxury vehicles, the Government will impose a 25%tax on the value of a car exceeding A$55,134.00 when the GST commences. This will be inaddition to the Customs duty and the 10% GST that will apply to motor vehicles. The luxury cartax will be included in net amount

calculations, and a quotation system will ensure that the incidence if tax is delayed until cars aresold at the retail level.

Tourist Refund Scheme

Third party companies will be able to facilitate the claims by overseas visitors for the GST theypaid on goods they purchased whilst visiting Australia. This Refund will be given on theirdeparture from Australia.

CLIENT SEMINAR

INDUSTRY EXCLUSIVE

As reported in our earlier communication on GST, Total Customs Services Pty Ltd / All PortsInternational shall be conducting an industry specific seminar, aimed at our Import / Exportclients.

We envisage holding this seminar in late February/Early March 2000. We feel this timetable willallow us, to study the amendments still to be approved by Parliament (and future amendments)and allow enough time for our clients to take any necessary action well in advance of the 1 July2000 commencement date for GST.

We would appreciate if interested clients could fax or mail a completed form to our office to allowsuitable arrangements to be made.

As a matter of convenience, we have included an “expression of interest” form on the followingpage to allow our clientele to book appropriate number of places.

Again, we would ask if you could please bring this guide along to our seminar. We shall beproviding updated pages as a result of any amendments passed in parliament hereafter.

Attn. Mr. P.O’ConnorTotal Customs Services Pty LtdP.O. Box 28TullamarineVic. 3043

(Fax 03 9335 1441)

RE; EXPRESSION OF INTEREST

Dear Peter,

With reference to your proposed GST seminar, we………………………….., would take thisopportunity to confirm our interest in attending this important meeting.

Could we please reserve ……………………….number of places.

We understand that your company shall advise date / time at the earliest possible convenience.We further understand that whilst Total Customs / All Ports shall be subsidising this seminar, asmall fee may be applicable per participant as partial cost recovery exercise.

We would also list following queries / questions we have a special interest in to allow you, andyour seminar co-ordinators to pool responses and to streamline the flow of the seminar;

……………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

(If insufficient space, please attach a follow-on page to ensure we attend to your specificinquiries)

Yours Faithfully,

………………………………………………. (pls. insert personal name)

COST DECLARATION TO BE COMPLETED BYOVERSEAS SUPPLIER/SHIPPER

As you may be aware, the Goods and Services Tax legislation requires the imposition of a 10%GST on taxable importations. The value of a taxable importation is calculated as follows;

q Customs value

q Customs duty

q Amount paid or payable for the international transport of the goods to their place ofconsignment in Australia (‘overseas freight’) and insure the goods for that transport, to theextent that the amount is not included in the Customs value,

q Plus any wine tax payable.

Quantifying the GST value will require knowledge of price components, such as overseas freight– either collect or prepaid, overseas wharf fees, overseas insurance etc.

Import clients of Total Customs Services have in the past made arrangements with overseassuppliers to provide an FCL costs declaration whereby goods are packed at the supplierswarehouse and certain inland overseas charges are itemised. This declaration has assisted us incalculating the correct Customs Value for Duty purposes whereby we deduct any fees accruedafter the FCL has been packed for shipment.

A similar declaration will assist us in quantifying the value for imported goods for GST purposesIn this regard, we would appreciate your cooperation in arranging for the itemisation by theoverseas supplier/shipper of overseas costs from Factory onward – for ALL modes ofconsignment, for example, Air, LCL, Loose, FCL, in the following format, or alternatively, on theoverseas invoice (see example in the attachment).

DECLARATION OF OVERSEAS COSTS FOR GST PURPOSES

The following costs have been incurred in relation to the goods specified in

Invoice No. SC 0021.

Cost Description AmountPre-paid ocean freightInland transportOverseas document feeOverseas storage costsOther (please specify)

Signed

Position

Date

EXAMPLE - COST DECLARATION ON INVOICE

Invoice No. OSC 0021

XYZ COMPANY PTY LTD

ConsigneeManagerImporting CompanyPlace

Purchase Order No: Place of Receipt:

Osaka

Ocean Vessel / Voy. No.

Australia Bridge 635

Port of Loading:

Osaka, Japan

Port of Discharge:

Melbourne, Australia

Place of Delivery:

Adelaide

Cost Declaration Revenue Tons Rate Per Prepaid Collect

FRT (O)

THC (O)

FUMIGATION (O)

Other (specify)

20’ x 1

20’ x 1

20’ x 1

$ 2682.60 Van

Van

Van

USD TOTAL

USD 2682.60

USD 300.00

USD 140.00

Container No. Marks & No No of Containers orPackages

Description of Goods Gross Wt (KGS) Measurement(M3)

SCTU

12266855T

IMPCO

EXPCO

1 CONTAINER

STC

23 PACKAGES

ELECTRICALEQUIPMENT

COUNTRY OF ORIGINJAPAN

“PREPAID FREIGHT”

ONE (1) CONTAINERONLY

11,873 27.23

Ex. Rate Prepaid at Payable at Place of Waybill Issue Dated

Destination Tokyo, Japan Nov 192000

GST Awareness-PLUS"A1"GST -free

Subdivision 38-A

Type of Food GST-free if not excluded bysection 38-3

Taxable

Live animals Live crustaceans and molluscs ( eg. lobsters, oysters andcrabs) where sold as food for human consumption.

Live cows, sheep pigs and poultry.

Grains,cereals and sugercane

Grains, cereals or sugar cane that have been processed ortreated resulting in an alteration of its, form, nature or conditionwhich are supplied as food for human consumption (eg. Wildrice which has had impurities removed and packaged for sale).

Unprocessed grains, cereals or sugar cane.

Processed grains, cereals and sugar products not supplied as food for human consumption.

Plans under cultivation Herbs sold in bunches and not as part of a living plant Potted herbs

Food suppied for consumptionon premises(restaurants,cafes,and snackbars)

All food and drink supplied for consumption on the premises where it is supplied. 'Premises' means more than justthe place where the food is sold and includes the surrounding grounds or other enclosed spaces.

Hot food Hot food supplied for consumption away from the premises. 'Hot food' means food that has been heated aboveroom temperature or above the generally surrounding air temperature for consumption.

Prepared food Food not considered to be a prepared meal:

• frozen vegetables;• uncooked pasta products;• fish fingers;• baby food, baked beans, spaghetti and Irish stews that donot require refrigeration or freezing.

Quiches

Sandwiches (using any type of bread of roll)

Pizzas, pizza subs, pizza pockets and similar food

Food marketed as a prepared meal, but not including soup. For example:

• prepared meals such as curry and rice dishes, momays and similar dishes sold cold by a takeaway orsupermarket that only need reheating to be ready for consumption;• fresh or frozen prepared lasagna• sushi• cooked pasta dishes sold complete with sauce;• frozen TV dinners; and• fresh or frozen complete meals such as single serves of a roast dinner including vegetables and low fat dietarymeals.Platters, etc. of cheese cold cuts, fruit or vegetables and other arrangements of food

Hamburgers, chicken burgers and similar food

Hot dogs.

GST Awareness-PLUS"A2"Type of Food GST-free if not excluded by

section 38-3Taxable

Confectionary Candied peel Confectionery and food marketed as confectionery, including chocolateFood marketed as ingredients for confectioneryFood consisting principally as confectioneryPopcornConfectionery noveltiesFood known as rnuesli bars or health food bars and similar foodstuffsCrystallised fruit, glace fruit and drained fruitCrystallised ginger and preserved gingerEdible cake decorations.

Savoury snacks Unshelled nuts and unsalted raw nuts Potato crisps, sticks or straws, corn crisps or chips, bacon or pork crackling or prawn chips

Seeds or nuts that have been processed or treated by salting, spicing, smoking or roasting or in any othersimilar way

Food similar to either of the above, whether or not it consists wholly or partly of any vegetable, herb, fruit,meat, seafood or dairy product or extract and whether or not it is atificially flavoured.

Caviar and similar fish roeFood consisting principally of any of the above

Bakery products Plain bread and rolls whether white, wholemeal or multigrainSesame seed or poppy seed rollsCheese topped breadPumpkin breadPlain focacciaHamburger bunsDamperSour dough breadRye breadTortillasUnleavened bread, gluten free or yeast free breadPita, Lebanese of lavash bread

Bread that has ingredients mixed with the dough before baking includingfruit loaves.. without a coating or filling

(a glaze is not considered to be a coating )

Cakes, slices, cheesecakes, panecakes, waffles, crepes, muffins and puddingsPavlova and meringuesPies (meat vegetable or fruit), pasties and sausage rollsTarts and pastriesDoughnuts and croissantsPastizzi, calzoni and briocheScones and scrollsBread and buns with a sweet filling or coating

Ice-cream food Frozen whole fruit Ice-cream, ice-cream cakes, ice-creams and ice-creams substitutes Frozen confectionery, frozen yoghurt,and frozen fruit products, Flavoured ice blocks (whether or not marketed in a frozen state) Any food similarto the above

Biscuit goods Breakfast cereals which have rolled or flattened into shapes and which arenot individually wrapped

Food that is, or consists principally of, biscuits, cookies, crackers, pretzels, cones or wafers

GST Awareness-PLUS"A3"Type of

BeverageGST-Free Taxable

Milk products Milk, skim milk or buttermilk whether liquid, powdered, concentrated orcondensed

Casein

Whey, whey powder or whey paste

Unflavoured beverages consisting of any of the above, or a combinationthereof, to the extent of at least 95% Lactose

Flavoured mik beverages

Soy milk and rice milk Beverages consisting principally of soy milk or rice milk Flavoured soy or rice milk beverages

Tea, coffee, etc. Tea (including herbal tea, fruit tea, ginseng tea and other similar beveragepreparations)

Coffee and coffee essence

Chicory and chicory essence

Malt and malt extract if it marketed principally for drinking purposes *

Tea, coffee etc beverages marketed in a ready to drink form such as packaged iced coffee or tea ortakeaway

coffee or tea.

Preparations for drinking purposes that are marked principally as teapreparations, coffee preparations, or preparations for malted beverages *

Preparations marketed principally as substitutes for the above two items(marked with * )

Dry preparations marketed for the purpose of flavourfing milk.

Fruit and vegetablejuices

Concentrates for making non-alcoholic beverages, if the concentratesconsist of at least 90% by volume of juices or fruits.

Non-alcoholic carbonated beverages if they consist wholly of juices of fruitsor vegetables.

Non alcoholic non-carbonated beverages if they consist of at least 90% byvolume of juices of fruits or vegetables

Beverages for infants orinvalids

Beverages, and ingredients for beverages, of a kind marketed principallyas food for infants or invalids

Water Bottled non carbonated natural water without any additives

GST Awareness-Plus "B1"No-taxable imports

Section 42-5 (1)

Schedule 4,Customs

Tariff Act

Brief description

--- Item 17 Goods exported and returned unaltered.

--- Item 18A Goods previously imported into Australia and returned after repair overseas free of charge under a warranty.

--- Item 18B Goods supplied free of charge under a warranty to replace goods previously imported into Australia.

--- Item 18C Goods supplied free of charge as part of a global product safety recall.

--- Item 21 Goods, as prescribed by by-law, that is imported for repair, alteration or industrial processing and are to beexported.

--- Item 23A Goods, as prescribed by by-law, that have been donated or bequeathed by a person or organizationdomiciled or established outside Australia to an organization established in Australia for the purposes ofperforming work of a philanthropic nature.

--- Item 23B Goods, as prescribed by by-law, that have been donated or bequeathed to the public or to a publicinstitution.

--- Item 24 Goods under a will or intestacy.

--- Item 25A Trophies won outside Australia, as priscribed by by-law

--- Item 25B Decorations, medallions or certificates awarded outside Australia and sent to persons within Australia, asprescribed by by-law

--- Item 25C Trophies or prizes sent by donors resident outside Australia for presentation or competition in Australia, asprescribed by by-law.

--- Item 32A Goods, as prescribed by by-law, on which no duty is payable and in respect of which, in the opinion of theCEO, the value is insubstantial. Gives concessions to sales tax only goods as follows: covers postal [non-postal] goods if total value of consignment does not exceed $1000 [$2501 and combined duty and sales tax(at present) does not exceed $50; $200 gift concession; educational concession; exhibition goods.

--- Item 32B Goods, as prescribed by by-law, which in the opinion of the CEO, the amount of duty payable and value areinsubstantial. Covers postal [non-postal] goods if total value of consignment does not exceed $1000 [$2501and combined duty and sales tax (at present) does not exceed $50; $200 gift concession; educationalconcession-,, exhibition goods.

--- Item 33A Calendars, catalogues, overseas travel literature, overseas price lists and other overseas printed matter, asprescribed by by-law. Applies to various overseas tourism advertising material.

--- Item 33B Samples, as prescribed by by-law, of negligible value (normally $2 per sample).

--- Item 34 Containers, as prescribed by by-law

--- Item 64 Goods, as prescribed by by-law, imported by or on behalf of non-Australian Olympic and Paralympic Familymembers, as defined by by-law, for use in certain events

GST Awareness-PLUS"B2"Customs tariff Act-Schedule 4 (Part 11)

General Concesssions for Prescribed Classes of Goods

17 Goods, or parts of goods,that have been exported from Australia and

are return in an unaltered condition,being goods which have not been subjected to treatment,industrialprocessing,repair,renovation,alteration or any other process,not being goods in respect of which:

(a) any duties,taxes or charges of the Commonwealth were payableat or prior to date of exportation but which had not been paid

and an amount equal to the sum of such duties, taxes or chargeshas not been paid to the Commonwealth since the date the goodswere exported from Australia; or

(b) drawback or refund of any duties, taxes or charges of theCommonwealth was paid when the goods were exported fromAustralia and an amount equal to such drawback or refund has notbeen paid to the Commonwealth since the date the goods wereexported from Australia.

Free

18A Goods, or parts of goods, previously imported into Australia and returned after repair overseas free ofcharge in accordance with the provisions of a warranty applicable to the previously imported goods, butnot including upgraded goods or goods to replacegoods which have reached the end of their operationallife, and which are not goods in respect of which drawback or refund of any duties, taxes or charges of theCommonwealth were paid

Free

18B Goods, or parts of goods, supplied free of charge under the provisions of a warranty to replace goods orparts of goods previously imported into Australia, but not including upgraded goods or goods to replacegoods which have reached the end of their operational life, where the replaced goods:

(a) are of no commercial value; or(b) have been or will be destroyed; or

(c) have been or will be exported and will not be reimported underany provision of this Schedule; and

(d) are not goods in respect of which drawback or refund of anyduties, taxes or charges of the Commonwealth were paid

Free

18C Goods, or parts of goods, supplied free of charge as part of a global product safety recall due to a productsafety fault, but not including upgraded goods or goods to replace goods which have reached the end oftheir effective operational life, where..

(a) the imported goods are to replace previously imported goods orparts of goods; and(b) the replaced goods are of no commercial value, or(c) the replaced goods have been or will be destroyed; or(d) the replaced goods have been or will be exported and will not bereimported under any provision of this Schedule; and

(e) the replaced goods are not goods in respect of which drawback orrefund of any duties, taxes or charges of the Commonwealth were paid

Free

GST Awareness-PLUS"B3"21 Goods, as prescribed by by-law, that are imported for repair, alteration or industrial

processing and are to be exportedFree

23A Goods, as prescribed by by-law, that have been donated or bequeathed by a person,company or organisation doniiciled or established outside Australia to an organisationestablished in Australia for the purposes of perfomiing work of a philanthropic nature

Free

23B Goods, as prescribed by by-law, that have been donated or bequeathed to the public or toa public institution

Free

24 Goods that are not to be sold or to be used for purposes of trade and that the RegionalDirector is satisfied became the property of the importer under the will or the intestacy of adeceased person at a time when the importer was resident or established in Australia

Free

25A Trophies won outside Australia, as prescribed by by-law Free

25B Decorations, medallions or certificates awarded, or to be awarded, outside Australia andsent from outside Australia to persons within Australia, as prescribed by by-law

Free

25C Trophies or prizes sent by donors resident outside Australia for presentation or competitionin Australia, as prescribed by by-law

Free

32A Goods, as prescribed by by-law, on which no duty is payable and in

respect of which, in the opinion of the Chief Executive Officer, the value is insubstantial

Free

32B Goods, as prescribed by by-law, which in the opinion of the Chief Executive Officer, theamount of duty that, but for this item, would be payable and the value are insubstantial

Free

33A Calendars, catalogues, overseas travel literature, overseas price lists and other overseasprinted matter, as prescribed by by-law

Free

33B Samples, as prescribed by by-law, of negligible value Free

34 Goods imported on or in containers, being containers that will be exported without beingput to any other use, as prescribed by by-law

Free

In respect of the Goodson or in the containers:The rate of duty that wouldapply to the goods if theywere imported separatelyNZ/PNG/FI/DC/DCS: Therate of duty that wouldapply to the goods if theywere imported separately.

GST Awareness-PLUS"B4"64 Goods, as prescribed by by-law, imported by, or on behalf of, non- Australian Olympic and Paralympic

Family members, as defined by by-law, for use in, or for purposes related to, any of the followingevents:

(a) The Sydney 2000 Olympic Games;

(b) The Sydney 2000 Paralympic Games;

(c) The Cultural Olympic Events, consisting of

(i) ASeaChange-1998;and,

(ii) Harbour of Life-2000; and

(d) Declared Sporting Test Events, being:

(i) International Sailing Regatta proposed to be held in September 1998;

(ii) International Cycling Union World Cup proposed to be held in March 1999 (mountain bikes)-,

(5i) International Sailing Regatta proposed to be held in September 1999;

(iv) Sydney International Three Day proposed to be held in September 1999 (equestrian event);

(v) FINA Men's World Cup proposed to be held in conjunction with Australian Water Polo Inc inSeptember and October 1999,

(vi) International Invitation proposed to be held in September and October 1999 (rowing);

(vii) International Invitation proposed to be held in October 1999 (canoeing, kayaking and slalom);

(viii) Modem Pentathlon. World Cup proposed to held in October 1999;

(ix) Fencing World Cup proposed to be held in October 1999;

(x) Oceania Championships proposed to be held in November

1999 (road racing, track and time trial for cycling);

(xi) Inter-Continental Cup proposed to be held in November 1999 (baseball);

(xii) National Basketball League matches at the Indoor Sport and Entertainment Centre, Sydney,proposed to be held in 1999 and 2000;

(xiii) Football International Invitations proposed to be held in conjunction with Soccer Australia fromJanuary to March 2000 (men's and women's matches);

(xiv) World Cup proposed to be held in March 2000 (shooting); (xv)lntemational Triathlon Union WorldCup proposed to be held

in April 2000; and

(xvi) Other Declared Sporting Test Events, as prescribed by bylaw, which are entered for homeconsumption on or before 1 January 2001.

Free

GST Awareness-PLUS"C1"AUSTRALIAN CUSTOMS NOTICE NO. 99/66

DEFERRAL OF GST ON IWORTED GOODS

Section 33-15 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) provides that amounts of OSTon taxable importations are to be paid by the importer to the Commonwealth:

a) at the same time, at the same place, and in the same manner, as customs duty is payable on the goods in question (orwould be payable if the goods were subject to customs duty); or

b) in the circumstances specified in the regulations, within such further time specified in the regulations, and at the placeand in the manner specified in the regulations.

The regulations will allow for deferral of payments of GST on taxable importations to coincide with payments of netamounts of GST. Details of a proposed GST deferral scheme developed jointly by the Australian Customs Service(Customs) and the Australian Taxation Office (ATO) are attached.

The deferral scheme is intended to commence on 1 July 2000 at the same time that GST is introduced. The ATO willinvite importers to apply to participate in the scheme early in 2000. In the meantime interested parties are invited tocomment on the proposal. Persons wishing to contribute their views are asked to submit them in writing to the addresseesbelow by close of business Friday 5 November 1999.

Contact Officers:

Mr Tom Marshall

Australian Customs Service

Phone: 02 6275 6863

Fax: 02 6275 5628

E-mail: [email protected]

Mr Kevin Gottstein

Australian Taxation Office

Phone: 07 3853 4911

Fax: 07 3853 4900

E-mail: [email protected]

J H Jeffery

National Director

Commercial Division

For the Chief Executive Officer

11 October 1999

GST Awareness-PLUS"C2"Attachment to ACN 99/66

Principal design features of the deferral system for GST on imported goods

Scope of the scherne Deferral of GST on imports will be limited to those importations that are entered for homeconsumption at the time of importation (Nature 10 entries). Goods imported under a number ofexisting and proposed arrangements that already effectively provide for deferral of duty andGST will be excluded from the proposal (eg Customs warehousing arrangements, and goodsimported under the TF-XCO scheme and the proposed TRADEX scheme that are diverted intohome consumption). Low value imports cleared on informal clearance documents will also beexcluded.

Admission to the scheme Importers must be registered for GST and must apply to the ATO for approval to participate inthe deferral scheme.

Unregistered importers will be required to pay GST and duty at the time the goods are enteredfor home consumption or otherwise dealt with under the Customs Act 1901.

Importers must lodgeBusiness ActivityStatements monthly

Importers may apply to participate in the deferral scheme if:

• they are required to lodge GST returns monthly because their annual turnover is $20 millionor more (section 27-1 5 of the GST Act); or

• their annual tumover is less than $20 million and they choose to lodge returns monthly(section 27-1 0 of the GST Act).

Importers must deal with theATO and Customselectronically

Importers may apply to participate in the deferral scheme if:

• they are required to lodge GST returns electronically because their annual turnover is $20million or more (section 31-25(2) of the GST Act); or

• their annual turnover is less than $20 million and they choose to lodge returns electronically(section 31-25(1) of the GST Act).

Importers must have a goodcompliance record

As a general principle, importers wishing to participate in the deferral scheme must not haveany debt outstanding to the ATO.

Disqualification from thescheme

Importers may be debarred from the deferral scheme if they-

• fail to lodge their Business Activity Statements by the due date;

• fail to pay their ATO obligations by the due date ;or

• are subject to administrative penalties under any Act administered by the Commissioner.

Readmission to the scheme Importers who have been disqualified from the deferral system may be readmitted if:

• they satisfy the rules for admission to the deferral system; and

• they obtain a bank guarantee in respect of any future liability for GST on imported goods.

The Customs web site now provides answers to the most commonly asked questions regarding GST and its impact onimporters and exporters: http://www.customs.gov.au/taxref/faqs.htm

Disclaimer: These notes are to provide general information and do not provide or purport to provide legal advice or asubstitute for legal advice on the matters described. Professional advisers should be consulted on your issues beforetaking any action in relation to the matters described