In the modern age of the internet and increased globalisation, importing has become a very popular activity for businesses. Australia, in particular, typically imports more goods than it exports.
The main motivation behind most cases of importing is that it is usually done in order to capitalise on an attractive business proposition. Often, a product is noticed overseas by someone who feels it would succeed in the Australian market.
Licences and duties
Most goods are able to be imported into Australia with no need of obtaining a license or permit. Excluded from this are weapons or pharmaceuticals, and goods that require a period of quarantine. Despite this, all goods must still pass through Customs. There are a number of things that need to be considered before importing, such as customs duties, GST, and/or other appropriate levies.
When importing goods with a total value of less than $1,000, no duties are payable. However, as is usually the case with importing for business purposes, should the value exceed $1,000, duties will be payable. The duty amount will be determined by Customs.
When importing goods, they must be classified appropriately with a trade description so that Customs is able to advise on any relevant duties and tariffs you may need to pay. Typically, the duty amount is calculated by the customs value of your goods. It is advised that you retain any relevant receipts or invoices for a minimum of five years, as proof of the customs value of your goods. Upon arrival, Customs may also decide to inspect your goods.
You are required to file an Import Declaration when bringing goods into the country, and this can be filled out independently via an electronic form or lodged in person with appropriate identification. A customs broker is also available to assist with completing the Import Declaration, and is generally recommended for first time importers.
So, here are some things to consider when importing for business:
Restrictions and availability
- Is the product already available in Australia, or is there someone who makes or sells a similar product? You may also want to consider whether it is worth your while trying to service a market that has already been provided a solution, or whether you can offer something that the market doesn’t already have, such as a more affordable alternative.
- Is this product restricted in any way, or even prohibited from importing into Australia? Some items are not allowed to be imported and others have certain restrictions, so it’s important to determine this from the beginning to save yourself any disappointment. Products that may contain plant, animal, or mineral products will need to be inspected by Australian quarantine services, and in many cases will need to be treated or fumigated.
- Are there any specific Australian standards that such a product must adhere to? Products such as safety equipment, for example helmets, are required to meet Australian standards. Importing these items for sale is not possible, and even if they can be assessed it’s often impractical and not cost effective.
Extra fees and duties
- Will the shipment be subject to customs duties and/or GST? Understanding the value of your goods and how they will be treated by Customs is important as there may be duties, levies, and taxes that are applied. These extra fees will have obvious impacts on your profitability and the ease of which you can import goods.
- What will it really cost you to import this product? Remember that the price your foreign supplier quotes you may only be for the goods. You must then consider the costs of getting your items to a port, the relevant port fees, license fees, and shipping or freight fees. You would then need to consider port discharge prices, transport costs, duties, and of course insurance for the entire process and journey. Also, try to maintain your dealings in Australian dollars so as not to be exposed to too many currency fluctuations.
Seeking advice from someone that understands this process is truly valuable and can save you a lot of hard work and potential disappointment. However, when done properly and accurately with the right information, importing can be an extremely rewarding and profitable activity.