Importing goods in Australia from overseas comes with many traps for the first-time importer. In this article, we'll tell you everything you need to know about importing goods into Australia.
Why do we import things?
Importing goods is not only good for building your business, but it also encourages product diversity, bringing exciting new products into a market for consumers and allowing national economies to grow and expand.
What do we mean by importing?
When we talk about importing goods, we're referring to the purchase of a product or service from another country into Australia. And it doesn't only have the benefit of bringing new products into a market, it also has the benefit of:
- Reducing manufacturing and production costs and expanding revenue
- Providing high quality products
- Providing ann opportunity to become a market leader in the industry of interest
What are the different types of imports?
Australia imports recorded USD$18.9 billion as of Aug 2020. Australian imports are mainly computers and electronic goods, cars, coffee, oil and gas.
There are two basic types of import:
- Industrial and consumer goods: Which are bought and used for industrial or business use. Consumer goods are ready for immediate consumption and satisfaction of human wants.
- Intermediate goods and services: These are goods or products that are used to produce a final product. They could be sold between industries for resale.
What are your freight options?
Probably the most expensive part of importing goods is your import method. Your choice of transit depends on the speed of delivery required to ship your goods. The main factors when determining the freight rate are mode of transportation, weight, size, distance, delivery and the actual goods being shipped. There are typically two main methods of delivering your goods:
- Air freight
- Sea freight
Air freight is typically used when transporting small, high value items - or things which are urgently required. When the required delivery date is tighter or needs to be exact, there is an ability to be time specific with air freight. Prices are calculated based on whichever is greater, the weight or the volume of goods.
Sea freight is often used when importing a large volume (above 100kg) of consumer goods around the world, and when time is not a critical factor. The costs associated with sea freight are usually worked out based on either Cubic Meters or Cubic Weight, and type and value of the goods being shipped. It is typically cheaper than air freight. When you take container shipping overseas, Full Container Load (FCL) and Less than Container Load (LCL) are your two options. FCL is a container option where a container is used exclusively for one shipment and is not shared with other cargo. LCL is when various cargo shipments share the same container as well as container costs. Generally, FCL shipping costs less than LCL and offers a faster lead time and delivery. This will ultimately depend on the volume shipped.
Should you use a Customs Broker?
A customs broker is a licensed specialist who deals with government, port and airline authorities to ensure compliance with import regulations. Specialising in customs clearance, they guide importers through the process of having goods declared for entry. They help complete and submit import declarations to ensure goods are legally allowed to enter the destination country. Customs brokers can receive your goods, arrange for necessary inspections, submit required documentation and liaise with local authorities to receive your delivery. If you ship with a courier through Interparcel, the customs clearance process is generally completed by the carrier that you select.
How to calculate chargeable freight?
Chargeable freight is how the cost of freight is calculated. Calculating chargeable freight for air and sea is different. As mentioned above, with air freight the cost is worked out using weight of goods, while sea is based on volume.
Find out if you need a specific permit
You do not need a license to import goods into Australia (whether you're an individual or business). However, depending on the goods, you might need to obtain some permits to clear your goods through customs.
How is duty calculated on imports?
Duty can be easily estimated based on the value of your imported goods. Goods valued under AUD$1,000 are duty free, and will be cleared from Customs and Border Protection by submitting a SAC declaration. For goods valued over AUD$1,000 your estimated duty can be calculated by using the formula below:
Estimated duty = (Product Value Freight Value) x 0.05 AUD
All cargo valued over AUD$1,000 must be cleared by submitting a completed Full Import Declaration (known as a FID) and paying duty, goods and services tax (GST). Note that duty free can apply to goods coming in from several countries that Australia has Free Trade Agreements (FTA) with. These countries currently include:
- New Zealand
For more information please visit the official Australian Border Force website
How is the goods' value calculated?
Most goods are valued by Customs and Border Protection at the transaction value in Australian Dollars.
What are some of the tariffs and taxes you'll need to pay?
If you are a business, before you can import goods you need to have an Australian Business Number (ABN) to the Department of Immigration and Border Protection. The typical duties and taxes paid on import goods over AUD$1,000 are:
- Import entry and processing costs: $200 or less
- Customs import duty, calculated as a percentage of the price originally paid for the goods: Typically ranges from 0%-10%, but for most products that are being imported into Australia, this is 5%
- GST sales tax, which is based on the valuation of the goods, customs import duty fee and any transport and insurance costs: 10% of the final amount. This includes the total cost of the imported cargo, customs duty, taxes and shipping costs
- Disbursement fee: 2.5% of the import duties and taxes or AUD$20 plus GST per shipment, whichever is greater. This will be paid on behalf of the importer by the carrier in order to expedite customs clearance
Please note that the aforementioned amounts are guidelines and are subject to change.
How do I calculate GST cost?
Let's assume that you are importing products worth AUD$10,000 to Australia. Let's have a look at some of the numbers:
- Customs duty = 5%
- Shipping cost = AUD$2,000
- Insurance = AUD$100
- GST = 10%
First we add the customs duty. It is 5% of the cost of the goods.
10,000 x 0.05 10,000 = 10,500
Then, we add all the other related costs. In this case it is the shipping cost and insurance
10,500 2,000 100 = 12,600
GST is then 10% off this total amount
12,600 x 0.10 = 1,260
Ensure you correctly label and package your products
You should label your goods with a trade description before you import them into Australia to reduce the risk of delays or seizure.
- You must label your products prominently and clearly in English, and include the country of origin and manufacture; an accurate and correct description of the goods inside; both a recipient and sender's address.
- Provide a detailed and accurate packing declaration to ensure all materials being brought into the country are allowed. Plastics, synthetic materials, wool and shredded paper are all acceptable within Australia.
- Any tape or wrapping paper that you use must be packed neatly so as to not influence the measurements of your package or the processing of your package on the conveyer belt.
Quarantine: Is it required?
Quarantine regulations in Australia are very stringent. Your goods can, at any time, be seized for quarantine measures and inspected. This will require them to open your parcel and may result in delays to your delivery. Upon opening your package, you will be charged an inspection fee. This is typically between $40-$90 AUD. If no quarantine risk material is detected, goods are usually released from quarantine without further treatment. Please be aware that neither the carrier or Interparcel can control the processing time of your shipment if your parcel has been seized, and you will not be able to seek compensation for any delays.
How can Interparcel help?
Importing goods in Australia can be a stressful task, if you're doing it all by youself. Interparcel specialises in importing goods in Australia via Air Freight. When you with Interparcel, you get the benefit of one of our experienced carriers, like TNT and UPS to manage the clearance of your goods.
Frequently Asked Questions
Why have my goods been stopped by Customs?
When a product is "held at customs" it means your package is being held by officials of the importer country's customs office. Your goods could have been stopped for any of the following reasons:
- Have a value over AU$1000
- Contain alcohol or tobacco
- Contain goods of Customs interest
- Contain any Customs Prohibited or Restricted Imports
My goods were a gift, why should I pay anything?
The law requires that all goods, even gifts, are to be subject to GST.
What exchange rate is used to calculate Duty/GST?
If the goods have been paid for then the exchange rate that was used to purchase the goods will be used. If the goods have not been paid yet, then the customs exchange rate will be used. This is an average of the four major banks on the date that the goods were imported.
Do I have to pay GST on my goods?
Most imported goods will require a GST payment. This takes into account the value of the imported good (see here for more details)
Do I need to provide my ABN if the goods are for my personal use?
If the goods were purchased for personal use, then you will not have to provide an ABN
What is a Tariff Code?
A tariff code is a product-specific code. Tariff codes exist for almost every product involved in global ecommerce.
I have been charged an extra amount for misdeclaration in weight, what do I do?
If you have misdeclared the weight or dimensions of your goods, you will be able to dispute these additional charges by providing evidence when you recieve your notification email.
- If you have been billed on dimensions, we need images of the item, showing each side measured with a measuring tape. The photos must be clear enough for us to read the measurements point to point. The label also needs to be visible.
- If you have been billed on the weight, we need photos of the item showing its weight on a set of scales. The label also needs to be visible.