Home – New Forums Logistics Australian companies have items posted from overseas to avoid GST Reply To: Australian companies have items posted from overseas to avoid GST

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l0nglive
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Hatching_It, post: 214640, member: 53049 wrote:
I’d suggest having proof of such a claim before writing it on the Internet…

Kogan Australia have used eWAY Australia to process their card transactions almost since they started – eWAY Australia only processes transactions through Australian merchant accounts, which are only issued to Australian businesses and settle in to Australian bank accounts.

I’d suggest that the reason for Kogan HK existing would be more to do with logistics rather than tax evasion.. They’ll have warehousing and dispatch set up over there which they can no doubt do cheaper themselves rather than pay a third party company.

There are also advantages in document fees if you’re importing all your products on one invoice, vs lots of different invoices from different suppliers but I as was mentioned above I’m pretty sure Kogan don’t hold anything locally.

Yes, Logistic can be a reason. However, they in fact, do not collect GST. Two birds with one stone I guess. I understand that Anon should not make assumption how things work without evidences, but we never have such evidences from the net.

What I’m trying to do, is to figure out how an AUS business who takes orders from Australians throw Australian banks and merchant services could avoid GST.

I can hypothesize that Kogan AUS take orders, bill and invoice customers. Then they source products from a foreign company (can be a related party) to ship directly to customers. That would fit the example I quote from ATO website

“Example 8 – Goods supplied by resident supplier and imported by resident recipient

130. Joe decides to fit his car with specialised seat covers. He approaches Seat Co in Sydney to supply the seat covers. However, the seat covers have to be imported from Italy. Under the arrangements with Seat Co, Joe imports the seat covers into Australia and pays Seat Co for the goods once the seat covers are cleared through Customs. The supply of goods, specialised seat covers by Seatco to Joe, is not connected with Australia because the goods are not delivered, or made available to Joe, in Australia. However, Joe makes a taxable importation upon which GST is payable.38″

Lets paraphrase it

130. Customer Joe decides to buy a smartphone. He approaches Kogan in Melb to supply the phone. However, the phone have to be imported from HongKong. Under the arrangements with Kogan, Joe imports the phone into Australia and pays Kogan for the goods once the phone is cleared through Customs. The supply of goods, phone by Kogan to Joe, is not connected with Australia because the goods are not delivered, or made available to Joe, in Australia. However, Joe makes a taxable importation upon which GST is payable. “

(this case, it’s below 1000$ -> no tax for JOe. Goods not connected to AUS -> no tax for Kogan)

Make sense to me.