XBert Type: Standard
Accounting Software: Xero
Country Restriction: Australia and New Zealand
Risk Type: Tax Risk
Business Function: Purchases
Overview
When goods are imported, Customs charges GST on them. The customs broker or courier (a freight forwarder, DHL, FedEx and so on) pays it on the importer's behalf and bills it back at cost, usually on a tax or duty invoice. That amount isn't a purchase with GST inside it: the whole amount is GST, and the business can claim it in full. This XBert flags a bill where that import GST was posted to an expense, stock or asset account instead of being claimed, so the business pays more GST than it owes.
What it does
XBert reads each bill from a broker or courier, along with the lines of the invoice attached to it. It raises an alert when the invoice or a bill line shows import GST, for example "Customs GST", "GST on Importation" or "GST paid to Customs", and nothing on the bill uses the GST on Imports tax rate or the GST account. The alert shows the amount of import GST, the account it was posted to and the wording it found.
How it works
This XBert raises an alert when all of the following are true:
The bill, or the invoice attached to it, shows import GST passed on by a broker or courier. It can be a line that names the GST, a tax disbursement invoice or a Customs statement (New Zealand), or a customs document whose GST makes up most of the bill.
No line on the bill uses the GST on Imports tax rate or the GST account.
The same import GST hasn't already been claimed elsewhere in the ledger: on another bill, in spend money or by a manual journal.
The amount is $10 or more.
The amount in the alert is shown one of three ways:
An exact figure when the invoice shows the import GST on its own line.
"Up to" when the import GST shares a line with duty or fees, so the figure may include them.
"About" when GST was keyed on the whole bill at the standard rate. The figure is the import GST plus the GST on the broker's own fees, less the GST that was keyed.
To keep the alerts accurate, it deliberately stays quiet for:
deferred GST, and another country's GST or customs;
tax a courier charges on goods exported on a duty-paid basis;
an invoice addressed to another company, because that company is the importer and claims the GST;
a goods supplier's own taxable recharge of duty and GST;
returned goods coming back into the country;
freight forwarder and customs broker files, and costs recharged to someone else;
draft, voided and deleted bills, and bills in a foreign currency;
a bill already corrected on a separate bill from the same supplier.
Example/Use Case
Mia's business imports acrylic sheet. Its freight forwarder sends a tax disbursement invoice for $13,901.05: $13,376.85 of Customs GST it paid on the business's behalf, $455.82 of its own fees and $68.38 of GST on those fees. The bill is keyed as one line to Freight Inward with GST on the fees only, so the $13,376.85 of import GST ends up in freight costs instead of being claimed. XBert flags the bill. Mia's bookkeeper moves the Customs GST to its own line with the GST on Imports tax rate, and the business claims it on its next GST return.
Accounting software
Xero. XBert reads each bill's lines and the invoice attached to it.
Which countries it supports
Australia and New Zealand.
Processes
Business area: Purchases (accounts payable).
To resolve a flagged alert:
Select Resolve Now to open the bill in Xero.
Check that the import entry (customs declaration) is in the client's name. Only the importer can claim GST on imports.
Put the import GST on its own line: enter the full amount shown on the invoice, and choose the GST account and the GST on Imports tax rate. Leave the broker's own fees and any duty on their usual account and tax rate.
If GST was keyed on the whole bill at the standard rate, remove it from the other lines.
Approve the bill again.
If the GST return for that period has already been filed, claim the GST in the next return.
If the import GST was already claimed outside Xero, for example as an adjustment on the GST return itself, file the XBert.
Once the bill is fixed, XBert clears the alert at the next sync.