GST for Transport & Logistics
Transport and logistics businesses deal with some unique GST rules — particularly around international freight (GST-free), fuel tax credits for heavy vehicles, and the distinction between domestic and cross-border services. Fuel tax credits alone can save transport operators tens of thousands of dollars per year.
Overview
Domestic freight and transport services are taxable supplies. If you operate a trucking company, courier service, removalist business, or logistics operation within Australia, you charge 10% GST on your services. This applies to all domestic road, rail, and sea freight.
International transport of goods is GST-free. The transport of goods from a place outside Australia to the place of consignment in Australia (and the reverse — exports) is GST-free under the GST Act. This also applies to services directly connected to international transport, such as loading, handling, and storage at the port of entry or exit. Subcontractors providing transport within Australia that forms part of an international shipment can also treat their supply as GST-free.
Fuel tax credits are the most significant GST-adjacent benefit for transport operators. Heavy vehicles (over 4.5 tonnes GVM) travelling on public roads are eligible for a partial fuel tax credit — the difference between the full excise rate and the road user charge. For the 2025-26 financial year, the off-road rate is approximately 50.3 cents per litre (full excise), while the on-road heavy vehicle rate is approximately 19.6 cents per litre. Rates change with each CPI adjustment.
Transport operators must be registered for both GST and fuel tax credits to claim on their BAS. Fuel tax credits are claimed at label 7D on the BAS and are reported in the same period the fuel is acquired. Accurate fuel records — including litres purchased, date, and the activity the fuel was used for — are essential for compliance.
Common items & GST status
The table below shows the GST treatment of common items and transactions in the transport & logistics sector.
| Item | GST Status | Notes |
|---|---|---|
| Domestic freight services | Taxable | All domestic road, rail, and sea freight is taxable |
| Courier and parcel delivery | Taxable | Last-mile delivery, express courier, same-day services |
| International freight (export) | GST-free | Transport of goods from Australia to an overseas destination |
| International freight (import leg) | GST-free | Transport of goods from overseas to the Australian place of consignment |
| Warehousing and storage | Taxable | Domestic storage and warehousing services — taxable |
| Port handling and stevedoring (international) | GST-free | Services directly connected to international freight transport |
| Fuel (diesel, petrol) | Taxable | Fuel purchases include GST — claim as input credit; also claim fuel tax credits |
| Toll road charges | Taxable | Road tolls include GST — claimable as input tax credits |
| Vehicle registration | GST-free | State government registration fees are GST-free |
| Passenger transport (taxi, rideshare) | Taxable | All taxi and rideshare services are taxable — regardless of turnover |
Common mistakes & traps
These are the most frequent GST errors the ATO sees in the transport & logistics industry. Avoiding them can save your business from penalties and back-payments.
1Not claiming fuel tax credits
Many transport operators either don't register for fuel tax credits or significantly under-claim. For a truck consuming 40,000 litres of diesel per year, the credits can exceed $7,800 annually.
How to fix it
Register for fuel tax credits through your BAS registration. Keep accurate fuel records (litres, date, use). Claim at label 7D on every BAS. Use the ATO fuel tax credit calculator to apply the correct rate for each acquisition period.
2Using the wrong fuel tax credit rate
The rate for heavy vehicles on public roads is different from the rate for off-road use. Using the off-road rate for on-road heavy vehicles results in an over-claim, which attracts ATO penalties.
How to fix it
Heavy vehicles on public roads: use the on-road rate (approximately 19.6c/L for 2025-26). Off-road use (generators, forklifts, refrigeration units): use the full off-road rate (approximately 50.3c/L). Rates change every six months — always check the current rate.
3Treating domestic legs of international freight as GST-free
A domestic transport company may assume that because the goods are ultimately being exported, the domestic leg is GST-free. The domestic leg is only GST-free if it forms part of the international transport — i.e. the goods are in continuous transit to the export point.
How to fix it
The domestic transport leg is GST-free if the goods are being transported continuously to the port/airport for export (or from the port to the consignee on import). If the goods are stored domestically for a period before export, the domestic transport to the warehouse may be a separate taxable supply.
4Not registering rideshare/taxi drivers for GST
Since 1 August 2015, all taxi and rideshare drivers must register for GST regardless of turnover. The $75,000 threshold does not apply to taxi travel. This catches many new rideshare drivers who are unaware.
How to fix it
If you provide taxi travel (including rideshare services like Uber, Ola, DiDi), you must register for GST immediately — there is no turnover threshold. Charge GST on all fares from day one.
Input tax credit guide
Which business purchases can you claim GST credits on? This table covers the most common purchases for transport & logistics businesses.
| Purchase | Credit? | Notes |
|---|---|---|
| Diesel fuel | Yes | GST credit on fuel PLUS fuel tax credits at label 7D — double benefit |
| Truck purchase or lease | Yes | Full GST credit on commercial vehicle purchase — no car limit for trucks |
| Tyres and vehicle maintenance | Yes | Servicing, tyres, parts, and repairs for commercial vehicles |
| Toll road charges | Yes | Tolls include GST — claim as input credit |
| Insurance (vehicle, cargo, public liability) | Yes | All business insurance premiums include GST |
| GPS tracking and telematics | Yes | Fleet management systems and subscriptions |
| Warehouse rent | Yes | Commercial rent on warehousing and depot space |
| Vehicle registration fees | No | State government fees are GST-free — no GST to claim |
| CTP insurance (greenslip) | No | Compulsory third party insurance is GST-free in most states |
| Fines and penalties | No | Speeding fines, overloading penalties — not tax deductible or GST-claimable |
BAS tips for transport & logistics
Claim fuel tax credits every BAS period
Report fuel tax credits at label 7D on your BAS. Use the date you acquired the fuel (not when you used it) to determine the applicable rate. Keep fuel purchase records including litres, date, price, and the activity the fuel was used for.
Separate international and domestic freight revenue
GST-free international freight revenue goes at label G3. Taxable domestic freight revenue is at G1 minus G3. Keep clear records of which jobs involve international transport to support GST-free treatment.
Use the ATO fuel tax credit calculator
Fuel tax credit rates change every six months (February and August) based on CPI. Use the ATO's online calculator to apply the correct rate for each period rather than calculating manually.
Frequently asked questions
ATO sources & references
All information in this guide is based on the following ATO publications and rulings.