Eligibility to claim for import tax

As advised by custom during importation, if consignee is under the name of customer then it is considered an out of scope supply with no GST imposed.

However, during the importation even though consignee name is under our customer but we are the one who paid for the import tax as to avoid our customer finding out on the price and forwarding agent also issue us the tax invoice for import GST. So in this case are we eligible to claim for the import tax?

Asked on August 17, 2017 2017-08-17 01:08:50 Business (商家)
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4 Answer(s)

If the consignee is in the name of your company then you can claim.

Answered on August 17, 2017. 2017-08-17 07:33:36

Consignee is in the name of my customer. But the forwarding agent issue the invoice to us.

on August 17, 2017. 2017-08-17 08:15:52
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In that case you have to refer to GST Guide on Disbursement and Reimbursement.  Try consult the Customs Officer (for both import duty department and GST section) at the Customs Office near your place if you still have doubt.  At some Customs Office, the two are from different department and you have to enquire from each Officer-in-charge.

Meantime please go through the GST Guide on Disbursement and Reimbursement below :

Disbursement and reimbursement are the method of recovery of expenses.

It happens when you help somebody pay his expenses and bill him afterwards to recover the expenses.

Definition of Reimbursement

“Reimbursement” refers to the recovery of an expense that you incur as a principal from your client (another party). A reimbursement is a supply and subject to GST .

Definition of Disbursement

“Disbursement” refers to the recovery of a payment made on behalf of another party by you as an agent. A disbursement does not constitute a supply and hence, is not subject to GST.

Definition of Principal

Generally, you are acting as a principal in procuring the goods or services if you contract with the supplier in your own name or capacity. The expenses are incurred by you, invoice is in your name.

Definition of Agent 

You are acting as an agent if the expenses are incurred by client (another party), invoice is in client’s name. You will make the payment on his behalf.

GST treatment on disbursement and reimbursement are as follows –

Disbursement Reimbursement
Not a supply Is a supply
Not entitled for input tax claim Entitled for input tax claim

In general, the criteria for disbursement and reimbursement for GST purposes are as follows –

Disbursement Reimbursement
Incur expenses as an agent acting on behalf of the client. Incur expenses as a principal.
The client is the recipient of the supply (invoice is in the client’s name) The client is not the recipient of the supply (invoice is in the principal’s name).
The client is the person responsible to pay for the supply The        principal       is        the        personresponsible to pay for the supply.
The payment is authorised by the client. The payment is not authorised by the client.
The client knew that the supply is made by a third party. The client has no knowledge that the supply is made by a third party.
The exact amount is claimed from the client and the agent has no right to alter or add on the value of the supply The principal has the right to alter or add on the value of the supply.
The payment is clearly an additional to the supply made to the client. The payment is for the supply made to the client.

Tax code for Reimbursement

Input tax: TX

Output tax: SR

Tax code for Disbursement

Input tax: OP

Output tax: OS

Invoicing for Reimbursement

Issue tax invoice compliance with GST.

Invoicing for Disbursement

Issue normal invoice*.

 

*See also: Do I need to issue tax invoice for EVERY transaction?


Source: Item 6:Disbursement and reimbursement

Answered on August 18, 2017. 2017-08-18 01:23:57
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The reason we were the one who are responsible to pay for the import GST is because we do not wish to reveal our source price to customer.
Customer will know how much is the consignment if they were the one who pay for the import tax.
So if we were to invoice our customer as disbursement fee they will know our purchase price as well.

Answered on August 18, 2017. 2017-08-18 01:40:05
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I’m afraid you are not able to claim the import duty from Customs.  You can only invoice your customer full amount (including the import duty).  Try consult the Customs Officer at the Customs Office near your place.

Answered on August 18, 2017. 2017-08-18 02:17:16

I see. Thank you.

on August 18, 2017. 2017-08-18 02:39:55
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