Import GST, VAT and recoverable tax
Why Landara keeps import GST out of your landed cost, how to code it so you can claim it back, and how to handle a forwarder invoice that mixes GST-free and taxable lines.
Updated 31 July 2026
Every importer pays two kinds of government charge at the border, and they need opposite treatment. Getting them mixed up is one of the most expensive mistakes in import accounting, because it overstates the value of your stock and understates what you claim back.
The rule in one line
Customs duty is part of what your stock cost. Import GST is not.
| Charge | Treatment | Why |
|---|---|---|
| Customs duty, tariffs | Added to landed cost | You never get it back. It is a real cost of the goods. |
| Import GST or VAT | Kept out of landed cost | You claim it back on your next return. It is not a cost at all. |
Both arrive on the same customs broker invoice, both are charged by a government, and they often sit on adjacent lines. That is exactly why they get conflated.
What Landara does automatically
When it reads your forwarder or broker invoice, Landara separates the two. Duty goes into the Duty category and is allocated across your products like freight. Import GST goes into a category of its own, Import tax (recoverable), and is deliberately left out of the calculation.
Nothing is hidden. The calculation shows the excluded amount separately, so you can always see what was held back and check it against the invoice. The line is still published to Xero or QuickBooks: your supplier charged it, so your bill must show it, or the bill will not match the paper invoice.
Why this matters in money. On a typical Australian import, GST is 10% of the goods value plus duty plus freight. Capitalising it inflates every number that follows: your stock value on the balance sheet, your cost per unit in Shopify, your COGS when the goods sell, and therefore your reported profit and your tax position. On a $50,000 shipment that is around $5,000 of stock value that was never a cost.
Set it up once
In Settings → Connections → Configure Tax Codes, the Import tax (recoverable) row is the only one that does not point at your Inventory account.
| Field | Xero | QuickBooks |
|---|---|---|
| GL account | Your GST account (820 in the default chart) | Your GST or tax liability account |
| Tax code | GST on Imports | Your import tax code |
Landara only offers liability accounts on this row, because that is the only correct kind. A debit sitting in your GST account is the credit you are claiming, which is why it belongs there rather than in an expense or asset account.
The GST on Imports rate shows as 0%, and that is correct. It is not calculating anything. The amount you enter already is the GST, so a 10% rate would charge tax on tax. The rate's job is to tell your accounting software that this amount belongs on your activity statement as GST you have paid.
Once set, a published bill puts the import GST straight into your GST account with the right tax code, and it appears on your activity statement as GST paid, ready to claim. No manual journal, no spreadsheet.
If your invoice has no GST line
Plenty of importers never see import GST on a forwarder invoice at all. If you are on the deferred GST scheme in Australia, the GST is reported directly on your BAS instead of being paid to your broker, so it never reaches the invoice. That is normal and there is nothing to configure: with no import tax line, the category simply never comes up.
When one category needs two tax codes
A single forwarder invoice often mixes tax treatments inside the same category. A common Australian example:
| Line | Category | Tax |
|---|---|---|
| Ocean freight, Shenzhen to Melbourne | Freight | GST-free (international transport) |
| Cartage, Port Melbourne to your warehouse | Freight | Usually GST |
Both are freight, so both would take the same tax code from your settings, and one of them would be wrong.
The Tax column on the document review screen fixes this. Each line shows the code it inherits from your settings, and you can change just the lines that differ. Landara remembers your choice: correct "Ocean Freight" once and the next invoice from that forwarder arrives already coded.
Only change the lines that are actually different. Everything you leave alone keeps following your settings, so a change to your default later still reaches them.
Charges that are not a cost of your goods
Some charges are not recoverable tax, but are not part of what your stock cost either:
- Demurrage and detention
- Late payment fees
- Finance or interest charges
These usually land in the Other category, which is normally capitalised. Untick In landed cost on the review screen to keep them out. The line still publishes to your accounting software as a cost, it just stops inflating the value of your stock.
The test is whether the charge helped bring the goods to your warehouse in a saleable condition. Storage while goods are in transit usually did. A penalty for collecting them late did not.
Checking it worked
- Publish the bill to Xero or QuickBooks and approve it. A draft bill is not in your ledger, so it will not appear on any tax report.
- In Xero, open Accounting → Reports → Activity Statement and switch to the Transactions tab.
- Find the GST on Imports section. Your import GST line should show the full amount in the GST column and 0.00 in Net.
- Compare your calculation's landed cost against the invoice: it should equal the invoice total less the import GST, less anything you unticked.
If the amount appears under GST on Expenses rather than GST on Imports, the line has been coded with an ordinary GST rate. Go back to Settings and check the tax code on the Import tax row.
Other countries
The rule is the same everywhere, only the name changes: import VAT in the UK and EU, GST/HST in Canada, GST in New Zealand and Singapore. Landara treats them identically. The United States has no recoverable import tax, so this never comes up: duty, MPF and HMF are all real costs and are all capitalised.
