Do You Need to Pay GST on Dropshipping in Australia?

Introduction

One of the most confusing parts of starting a dropshipping business in Australia is GST.

Do you actually need to pay it?

Do you need to register straight away?

Or can you ignore it when you’re just starting?

The short answer is: sometimes you do, sometimes you don’t.

It depends on your revenue and how your business is set up.

This article breaks down exactly when GST applies, when it doesn’t, and how to handle it properly so you don’t run into problems later.

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Do You Need to Pay GST on Dropshipping in Australia?

You only need to register for and pay GST if your business earns $75,000 or more per year.

If you’re below that threshold:

• You do not have to register for GST

• You do not have to charge GST on your products

If you go above $75,000:

• You must register for GST

• You must charge 10% GST on sales

• You must report it through your BAS

So no—you don’t always need to pay GST. Only once you hit the threshold.

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What Happens Before $75,000 in Revenue?

You can operate without GST

When you’re starting out, most dropshipping stores are well below the GST threshold.

This means:

• You can sell products without adding GST

• You don’t need to lodge BAS statements

• Your setup stays simple

This is one of the reasons dropshipping is beginner-friendly.

Keep tracking everything

Even if you’re not registered for GST yet, you still need to track:

• Revenue

• Expenses

• Profit

Once you approach the threshold, you’ll need clean records.

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What Happens After $75,000?

You must register for GST

As soon as your revenue hits or is expected to hit $75,000 annually, you are required to register.

This isn’t optional.

You must charge GST

Once registered:

• You add 10% GST to your product prices

• You collect that from customers

• You pass it to the ATO

You must report regularly

You’ll need to submit a Business Activity Statement (BAS), usually quarterly.

This includes:

• GST collected

• GST paid on expenses

• Net amount owed

It sounds complex, but it becomes routine once set up.

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How GST Works With Dropshipping

You are the retailer

Even though your supplier ships the product, you are the one selling it.

That means:

• You collect payment

• You handle GST (if registered)

• You are responsible for reporting

GST is based on your sale price

You calculate GST based on what you charge the customer—not what you pay the supplier.

For example:

• You sell a product for $200

• GST = $20 (if registered)

Your margin is separate from this.

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Local vs Overseas Suppliers

Australian suppliers

If you use local suppliers:

• GST is often already included in your costs

• You may be able to claim GST credits

This can simplify things.

Overseas suppliers

If you use overseas suppliers:

• Products under $1,000 imported into Australia may still require GST

• Platforms or systems may handle this depending on setup

This is where things can get more complex.

Keep it simple early

Many beginners choose local suppliers to:

• Avoid confusion

• Improve shipping times

• Stay compliant more easily

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Why Most Beginners Overcomplicate GST

They try to solve everything upfront

Most people get stuck thinking:

• “What about tax?”

• “What about GST?”

Before they even launch.

But in reality:

• Most stores don’t hit $75K quickly

• GST isn’t an immediate issue

• Action matters more early on

Focus on starting first

You don’t need to solve advanced tax scenarios on day one.

You need:

• A live store

• Traffic

• Sales

The rest comes as you grow.

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Choosing the Right Products Still Matters

GST is only part of the equation.

Profit comes from:

• Margins

• Product choice

• Demand

If you’re unsure what to sell, reviewing Top 50 Australian Dropshipping Niche Ideas helps you focus on products that actually have room for profit—before GST even becomes a factor.

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The Shortcut Most Beginners Take

A lot of beginners get stuck in:

• Research

• Legal questions

• Overthinking setup

Instead of actually starting.

This is why starting with a prebuilt store can help.

It gives you:

• A structured setup

• A clear starting point

• Less confusion around basics

So you can focus on:

• Getting traffic

• Making sales

• Learning through action

GST becomes relevant when you grow—not before you start.

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Common Mistakes

• Worrying about GST too early

• Not tracking revenue properly

• Forgetting to register after $75K

• Misunderstanding how GST is calculated

• Overcomplicating tax before launching

Most GST issues come from poor tracking—not complexity.

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FAQ

Do I need to register for GST when starting dropshipping?
No, only once your revenue reaches $75,000 per year.

Do I need to charge GST on my products?
Only if you are registered for GST.

What happens if I go over $75,000?
You must register and start charging GST.

Is GST based on profit or revenue?
GST is based on your sales price, not your profit.

Do overseas suppliers change GST rules?
They can add complexity, but your responsibility as the seller remains the same.

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Summary

You only need to pay GST on dropshipping in Australia once your business reaches $75,000 in annual revenue. Before that, you can operate without it, as long as you track your numbers properly and stay aware of when you need to register.

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Final Thoughts

GST isn’t what stops people from succeeding in dropshipping.

Overthinking is.

Most beginners spend too much time worrying about tax before they’ve made their first sale.

Start simple.

Track your numbers.

Handle GST when it becomes relevant.

Because the real problem isn’t tax—it’s never starting in the first place.