Deferring GST on imported goods (Australia only)

MYOB Staff Post
58 Posts
MYOB Staff Post
MYOB Staff Post




The Deferred GST scheme is an option available to importers who report GST on a monthly basis and deal electronically with the Australian Taxation Office (ATO) and Customs. This liability amount should match the amount you are reporting as an input tax credit for the GST paid on purchases from overseas supplies.


As a result, the ATO liability will cancel the input tax credit resulting in no payment required to the ATO.


For more information on the Deferred GST scheme visit the ATO website.


This article explains how to record your transactions to reflect this in your company file. This information is for guidance only and relates to Australian businesses, and it might not be suitable for your business requirements. If you need clarification or additional information, check with your accounting advisor, the ATO, or post your question below.



Task 1 - Setup an account to record the deferred GST liability


  1. Go to your Accounts command centre and click Accounts List.
  2. Click the Liability tab then click New.
  3. Enter a unique number for the new account and press the key.
  4. Give the account an appropriate name, such as Deferred GST Import Liability.
  5. Select Credit Card in the Account Type field.
  6. Click OK. See our example below.



Task 2 - Record the overseas purchase


Enter the details of your overseas purchase. Use the N-T (No Tax/Not Reportable) tax code to ensure that GST is not payable to the supplier. This transaction can be entered in foreign-currency for those using the multi-currency function available in some versions.

This task records the inventory but not the GST on landed cost. See our example below.



Task 3 - Record the deferred GST liability


  1. Go to the Banking command centre and click Spend Money.
  2. Select the Deferred GST Liability account (created at Task 1 above) in the Pay From Account field.
  3. Deselect the Tax Inclusive option in the top right corner of the window.
  4. In the Amount field enter the ATO liability amount. This would be 10% of Australian Dollar equivalent of the landed cost of the goods. Note: The landed cost as determined by Customs may differ from the amount paid to your supplier due to exchange rate variations.
  5. In the first allocation line, select an allocation account and enter the tax-exclusive landed cost amount. Ensure you use the GST tax code.
  6. In the second allocation line, select the same allocation account, enter the tax-exclusive landed cost amount as a negative. Ensure you use the N-T tax code. See our example below.


In the above example, $100 represents a liability to the ATO and a tax credit. The effect of this transaction is to create both a liability and tax credit for the deferred GST amount.


At the end of each month, Customs will advise the ATO of the total deferred GST liability. The Business Activity Statement that the ATO issues to you will include the deferred GST liability at field 7A.



Task 4 - Record the GST payable on supply, customs duty freight, and insurance


A Customs agent is usually employed to handle the costs associated with the import. Generally, the Customs agent will arrange payment and collection of the goods on arrival into Australia and might pay your customs duty, freight and insurance, so you will need to reimburse the customs agent for these costs. Create a Tax Exclusive purchase and use the GST tax code for each line entered. See our example below.




Note: In the above example the freight, customs duty, and insurance is immediately expensed, but these can be included into inventory value (see below).



Task 5 - Record your deferred liability payment


The Deferred GST Import Liability is paid when you lodge your Business Activity Statement. Essentially, this liability is paid using your GST tax credit using a spend money transaction. When you pay the ATO for your GST, PAYG, and other liabilities, the transaction is entered similar to that shown in the example below.





I also want to enter the value of freight, insurance and customs duty into inventory, how do I handle this?


In the previous example, individual expense items were used to record the freight, insurance and customs duty along with the GST component. The following method can be used where you require these costs to be included into the inventory value for the imported items:


  1. Enter the details of your overseas purchase. Use the N-T (No Tax/Not Reportable) tax code to ensure that GST is not payable to the supplier. (See Task 2 above).
  2. Create a Tax Exclusive item purchase. On the first line, enter the Bill quantity as 1, and enter the value of the freight/insurance/customs fee. On the second line enter the Bill quantity as negative one (-1), select the item number and leave the price blank. Use the GST tax code for each line. In the example given, $110 of freight and other landed costs is being added to the item 50 (Bamboo Coffee table) which has been purchased from overseas.

By entering the item amount without a Received quantity, the value of inventory increases without increasing the quantity on hand. This is similar to an inventory adjustment. See our example below.

Then follow the rest of the above steps.




If you import multiple items, these values can be apportioned according to the respective values, and entered using the same method.

Ultimate Partner
1,949 Posts
Ultimate Partner

Excellent blog thanks for sharing Smiley Very Happy

1 Post

I am confused about the impact recording the Deferred GST liablity in Task 3 will have on the GST reports. When running the GST reports this will include the $100 as GST paid?


Assuming this to be the only import for the month, the ATO should report the $100 as deferred GST and the $100 will need to be deducted from the GST paid otherwise it will be double reported on the monthly BAS.


Am I correct? If yes, is there a cleaner way to do this?

2 Posts
Cover User

Referring to executing step 3, the deferred GST would be included in your BAS worksheet at G11 (GST the ATO owes me). On my electronic acitivity statement, this deferred amount is prefilled by the ATO as well, and I need to add it at 7A on the BAS worksheet (becomes GST owed to the ATO).

It would be good to know if these transactions are correct if I follow task 3, 4 & 5, as the notes does not refer to the prefilled section (and GST Deferred on imported goods 7A)? Thank you.