How the GST Deferral Program Can Improve Your Cash Flow

If your business imports goods into Australia, managing cash flow can be a challenge — especially with GST payments on every shipment. But there’s a way to ease that burden and improve cost control: the GST deferral program.

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What Is the GST Deferral Program?

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The GST deferral program is a key tax benefit that allows Australian businesses to defer paying GST on imported goods until their next Business Activity Statement (BAS). Instead of paying GST at customs, you can manage your cash flow more effectively by paying it when you lodge your BAS. This helps with supply chain management by giving you more financial flexibility to cover other operational costs.

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Who Can Benefit?

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The GST deferral program is a great solution for businesses that import goods regularly and want better cash flow management and cost control. It’s particularly useful for:

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• Retailers and eCommerce businesses that import products from international suppliers. By deferring GST, they free up cash that can be used for inventory or other business needs.
• Manufacturers that rely on imported raw materials or components to keep production going. This allows manufacturers to maintain liquidity without the added pressure of paying tax upfront on imported goods.
• Wholesalers and Distributors who manage large-scale imports. Delaying GST payments can provide the cash needed to cover operational expenses and avoid disruption in the supply chain.

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These types of businesses often have complex supply chains, requiring careful cost management to stay competitive. The GST deferral program helps ensure that cash is available when needed, reducing financial strain at the point of import.

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Eligibility Criteria.

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To take advantage of the GST deferral program, your business needs to meet the following requirements:

• You must be registered for GST in Australia.
• Your BAS must be lodged monthly.
• You need to have a valid Australian Business Number (ABN).
• Your business must be involved in importing goods into Australia.

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How to Apply and Make the Most of the Program.

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1. Check Your Eligibility: Ensure your business meets the criteria for GST deferral, including monthly BAS lodging.
2. Consult your Tax Agent: Get tailored tax advice specific to your business. 
3. Apply Through the ATO: You can apply directly via the Australian Taxation Office (ATO). Once approved, you can start deferring GST on all future imports.‍
4. Integrate It Into Your Financial Strategy: Use the additional cash flow flexibility to improve your cost control, support supply chain management, and cover other operational costs more efficiently.

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How We Can Help.

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Understanding tax deferral programs and how they integrate with your supply chain and financial strategies can be complex. We recommend you consult with your tax agent. While GST deferral makes sense for many, it needs to be based on your specific business needs, as well as the reporting and payment structure of your organisation. 

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From there, our expert team can help you navigate the GST deferral program and make the most of its benefits. Whether it’s improving your cash flow or optimising your supply chain management, we’re here to guide you every step of the way.

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The Bottom Line.

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For businesses that import goods, the GST deferral program is a simple yet powerful way to improve cash flow management and reduce the upfront tax burden. By deferring GST payments until you lodge your BAS, you can control costs more effectively, keeping your supply chain running smoothly and your business finances in check.

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To learn more about how the program can benefit your business, or to get expert advice on applying, contact our team today. For more details on the program, you can also visit the Australian Tax Office website.

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