Import Tax Should Not Become Held Stock, Or A Nasty Statement
The shipment lands.
The supplier invoice says one number.
That is not what the stock cost you.
Freight. Insurance. Customs duty. Broker and clearance fees. The truck to your warehouse.
All of it lands with the goods.
All of it belongs in the cost of the stock.
That full figure is the true landed cost.
And it is the number your margins and prices should be built on.
Price from the supplier invoice alone, and every sale may be leaving less than you think.
The supplier invoice is where the cost starts. The landed cost is what the stock really cost.
Two Ways Landed Cost Goes Wrong
We see the same two problems again and again.
The wrong cost goes into stock
The broker's bill arrives as one total.
Someone enters it as one cost against the stock.
Now the GST on the import is sitting inside the stock value, next to the duty and the freight.
GST on imports is not a stock cost. If your business is GST-registered, imports the goods itself and uses them in the business, the GST can usually be claimed back as a GST credit, even if your customs broker paid it for you.
Buried in stock, that credit is easy to miss. And your stock looks more expensive than it is.
The right costs get left out
The other problem is the opposite.
The freight bill gets coded to freight. The broker's fees go to general expenses. The delivery to the warehouse ends up with motor vehicle costs.
Each entry looks tidy on its own.
But the stock now looks cheaper than it really is.
Your margin looks healthy on paper. The prices built on it may not be.
Held stock should carry its real costs. No more, no less.
What Goes Into True Landed Cost
A broker's paperwork can look dense. It usually breaks down into a few lines.
Cost on the paperwork | Part of landed cost? |
Customs duty | Yes. It is a cost of bringing the goods in. |
GST on the import | No. It is not a stock cost. It can usually be claimed as a GST credit if you are GST-registered, import the goods yourself and use them in the business. |
Freight and insurance | Yes. Getting the goods here is part of what they cost. |
Broker and clearance fees | Yes. The goods are not yours to sell until they clear. |
Transport to the warehouse | Yes. The stock is not ready to sell until it arrives. |
Add the four "Yes" lines to the supplier invoice, and you have the true landed cost.
Keep the GST out of it, and claim it in the right place.
Getting Landed Cost Right
None of this needs a big system. It needs a routine.
1. Split the broker's bill line by line
Enter duty, GST, freight and fees separately.
That one habit fixes most of the problems above.
2. Add the landing costs to the stock
Freight, insurance, customs duty, broker and clearance fees, and transport to your warehouse generally go into the cost of the stock, for your accounts and usually for tax too, rather than into general expenses. Delivery to customers after a sale doesn't.
3. Keep the GST out of stock
Record the GST on the import as GST, not as part of the stock.
Keep the import declaration and proof that the GST was paid (from Border Force or your broker). That's what supports the GST credit, not a supplier's tax invoice.
4. Plan the cash before the goods clear
Duty is usually paid before the goods are released. GST often is too.
If your business uses the ATO Deferred GST scheme, the GST on imports moves to your monthly BAS instead, where it's usually offset by the GST credit on the same BAS.
Either way, know what is due before the shipment lands.
5. Price from the landed cost, not the invoice
Work out the landed cost of each item, then set your margin from there.
If your prices were set from the supplier invoice alone, now is the time to check them.
If you want to check the GST in a figure, our GST calculator is free on our Free Tools page. It covers GST only. It does not work out customs duty or landed cost, so those figures need to come from your broker's paperwork.
Who Watches The Landed Cost?
In most Australian businesses like yours, the person entering supplier bills is already handling the broker's paperwork.
With some training, they can split each import bill properly and keep landed costs current.
→ We train your office person to enter import bills line by line, with each cost in the right place.
→ We review the books, look after the lodgements, and check how the import GST and duty are flowing through.
→ You see what your stock really costs, what your margins really are, and what is claimable.
Because we are already in your numbers for the normal compliance work, the conversation about pricing and stock happens as part of it.
Which products carry more cost than you thought. Which prices need a second look. What the next shipment will need in cash.
It is not a separate project. It is part of keeping the books right.
A Quick Self-Check
Take a minute and answer these honestly.
Question | Yes / No |
Are your broker's bills entered line by line, not as one total? | ☐ |
Do you know the true landed cost of your main products? | ☐ |
Are freight, duty, broker fees and transport to your warehouse added to stock cost? | ☐ |
Is the GST on imports kept out of stock and claimed as a credit? | ☐ |
Are your prices set from landed cost, not the supplier invoice? | ☐ |
If a few of these are uncomfortable, you are not alone.
Import paperwork is easy to put in the too-hard pile.
It is also very fixable.
Final Thought
The supplier invoice is only the start.
The goods are not ready to sell until they are shipped, insured, cleared and delivered to your warehouse.
When every one of those costs sits in the stock, the stock shows what it really cost.
The GST sits where it can be claimed.
Your prices are built on the real number.
You'll know what to do next.
Not sure what your stock really costs to land? We can look at how your import bills are entered today and what it would take to price from true landed cost.
Book a call with our team.
This article is general information only. It does not take your circumstances into account and is not tax or financial advice.
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