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How to purchase the goods as tax free in Australia.
The goods and services tax (GST) was introduced in Australia on 1st of July 2000 and now most goods and services are subject to 10 % GST.
A traveller is anyone (an Australian resident or a non-Australian resident) who intends leaving Australia temporarily or permanently on an international flight or voyage.
There are two ways to purchase goods as tax free.
1. Purchase goods without paying GST (Sealed Bag Method)
2. Get a refund of the GST (Tourist Refund Scheme)
Both of these ways have merit and demerit, so we are going to study them one by one.
1. Sealed Bag Method
For purchasing goods by using this way, you have to go overseas within 30 days. You have to show your overseas ticket and passport to the retailer. If the retailer which you intend to buy a goods from is applied for a tax free sales with the company called " Duty Free Security Co. Ltd.", you have no problem to purchase goods as tax free, which means the retailer can purchase goods as tax free. But this method is limited, not all of the retailers can do this.
The biggest difficulties of this method is the goods you purchased has to be packed and sealed, which means you can't use the goods until you depart from Australia. Also you must carry this bag by hand at the airport or seaport, you can't pack in a suitcase or in hand luggage. This bag must not be tampered with or opened until the attached invoice has been collected by authorised collection officers. So if you would like to use the goods while you are in Australia, this method is not for you.
When you purchase goods as tax free by this method, you have to complete the Sealed Bag declaration. This declaration contains details of the purchase, the intended journey, and the purchaser's agreement to comply with the invoice collection system, and you have to sign this. If you don't follow the rules, you could be fined up to $5,000 or sent to prison for up to 12 months. Be careful!!2. Tourist Refund Scheme (TRS)
This method enables you to claim a refund of the GST that you pay on goods you purchased in Australia, which means you have to pay GST when you buy goods in Australia but you can claim back that amount when you go overseas. For this method conditions apply. The refund will be paid on goods totalling $300 (GST inclusive) or more, bought from the same store, no more than 30 days before you leave Australia. The best part of this method is, you can claim back GST on the goods wherever you bought from (for $300 or more). And also you can use the goods within Australia. It doesn't apply to services or goods consumed or partly consumed in Australia such as chocolate and perfume. However unlike Sealed Bag Method, most of the goods, such as clothing and cameras, can be used in Australia before departure.
If you wish to claim a refund, you must get an original tax invoice from the retailer where you buy the goods. All stores registered for GST will be able to give you a tax invoice. A refund can not be given without it.
When you depart Australia, you will need to present the goods, tax invoice, your passport and international boarding pass at the customs TRS facility. Once you follow the step, you can collect your refund through cheque, credit to an Australian bank account or, payment to a credit card.The table below makes them clear.
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Sealed Bag Method | Tourist Refund Scheme (TRS) |
| When you buy | You must show your passport and ticket | As normal purchase |
| Where you buy | The retailer applied with Duty Free Security | Anywhere |
| Goods | Has to be packed (can't use in Australia) | You can use in Australia |
| Handling | The goods in the sealed bag has to be carry by hands | The goods has to be carry by hands |
| At the airport | The attached invoice must be taken by officers | Claim a refund |
| Merit |
You don't have to pay extra 10% for the goods (you can use this for other things) You don't have to apply for refund at the airport |
You can use the goods in Australia You can buy goods from any retailer |
| Demerit |
You can't use the goods in Australia You have to carry the sealed bag in your hands |
It applies for the invoice over $300 |
As you can see, both methods have merit and demerit. We normally ask our client first which method they prefer, and whichever they like us to do.
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