Importing goods into a country is often thought to be easier than exporting. However, there are numerous hurdles that can be challenging to an inexperienced individual. You do not need to be an expert to place order on an overseas supplier. You can get professional advice from forwarding agents, customs brokers or the Australian Chamber of Commerce and Industry. You can also gain insight into the importing processes by attending the periodic International Trade Course which is offered by the College of International Business.
Whatever reason you have for importing, you should do some research to determine the landing costs of goods in Australia accurately. A product may seem cheap but with on-costs such as insurance, freight, import duty, bank charges and interests, it may not be as competitive on the Australian market.
Basic Steps for Importing in Australia
- Obtain a catalogue or sample with prices from your supplier.
- You may need the help of a bank or other commercial references to ascertain the integrity of the supplier.
- Having obtained a satisfactory source of supply, get a firm quotation. Remember to ask about quantity discounts. Some suppliers can even assist you with the initial marketing especially when they are trying to penetrate a new market.
- The price should be based on Incoterms, which will reduce chances of misunderstandings between you and your supplier. Understanding the Incoterms technicalities will help you to know the responsibility of the seller. It will also help you to determine the payable import duties as well as the GST tax. Request both the FOB and CIF prices so you can compare the rates.
You can seek the help of a customs broker for classification opinion, GST, duty, import restrictions, tariff concessions as well as quarantine requirements. For instance wood items might require a fumigation certificate while food stuffs may require the Australian Quarantine certification/permit. Note that the import quotas only apply to limited goods in Australia.
Obtain the freight rates from a shipping company, an airline or a freight forwarder. If you are insuring your cargo you can get rates from any marine cargo insurance company, freight forwarder or maybe even your own household insurer can arrange this for you.
You can negotiate with your supplier or go to your bank’s international division to know whether they can facilitate the payment and the charges involved.
What You Need to Know While Planning to Import:
- The GST tax is 10 percent of the value of taxable importation which includes (goods + insurance + duty + freight). Once the goods you ordered are landed, the customs department will determine the GTS liability and give you a detailed account of the payable amount. Don’t forget to consider applying for import GST deferral!
- There are no charges, duties or taxes to pay on goods that are worth AUD 1000 or less except for tobacco, tobacco products or alcoholic beverages.
III. There are charges, duties or taxes to pay on goods that are worth more than AUD 1000
- Often if the goods arrive by sea or air cargo and under $1000 they may still require a Self-Assessed Clearance declaration, but generally small parcels via the post will go straight through without a SAC. There is a processing fee for creating SAC entry with a broker.
In essence, the insurance and international transport includes all the costs that will get the goods into the country but may not have been included in the prices of those goods. The packaging and coding must meet all the government regulations. The documents that must be received by the importer or his/her bank include order confirmation, customs/commercial invoice, shipping advice/bill of lading, insurance policy, packing slip, contract and legal considerations ( if applicable )
Once the goods arrive, you or your customs broker will need to clear them through the customs and quarantine. Here you will require the above mentioned documents and any relevant documents relating to the goods, Examine the consignment for your insurance, if you are not satisfied with the quantity, quality and condition of the goods advise your customs broker immediately. There are some remedies that might allow a remission of any import duty paid (if goods are damaged or not as ordered ) but must be actioned as soon as possible after receipt of goods.