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  • #982737
    leena
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    Hi,

    There are heaps of extra taxes and duties that kick in once you import goods such as clothing, I was wondering if anyone knows of any special concessions for startups that lower the costs? I know these things are unavoidable but it’ll be good to know if there are ways that help new businesses get off the ground.

    Thanks

    #1138504
    Divert To Mobile
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    Hi Leena,

    I thought duty was pretty much 5% accross the board except for automotive, alcohol and tobacco. Could you expand on what you mean by heaps of extra taxes and duties for clothing so I can learn from your experience.

    Steve

    #1138505
    leena
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    #1138506
    Divert To Mobile
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    Hi Leena,

    that link doesnt explain

    leena, post: 157974 wrote:
    Hi,
    There are heaps of extra taxes and duties that kick in once you import goods such as clothing,

    Is there any other reason?

    Steve

    #1138507
    RobynLee
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    leena, post: 157974 wrote:
    Hi,

    There are heaps of extra taxes and duties that kick in once you import goods such as clothing, I was wondering if anyone knows of any special concessions for startups that lower the costs? I know these things are unavoidable but it’ll be good to know if there are ways that help new businesses get off the ground.

    Thanks

    Hi Leena,

    I don’t know of any special concessions for small/new businesses but there are a few things that you can do to try to lower your import costs.

    You will have to pay GST on imports over $1000, so if you’re registered for GST that’s something you can recoup via sales.

    Also, some of the handling and internal transport fees vary from agent to agent, so it’s always good to shop around for the best prices. Having said that, however, watch out for too low prices as I’ve found with clearing agents that you tend to get what you pay for.

    I also like to figure out the overall cost per item including shipping and handling as that helps me keep things in perspective. For example, while all of the fees do add to your initial investment, if you factor them into your cost per item you usually find it’s not that much — and the more items you import at once, the less you have to add on to your cost/piece.

    Also, little things make a difference. Making sure you have money to pay as soon as the shipment arrives in port is important as unless you have negotiated payment terms most won’t deliver till they receive up front payment — and you end up paying extra storage charges. Also, have someone on hand when the delivery arrives. One time I wasn’t around and the driver unloaded and packed them in my carport — then the shipping company sent me an extra bill for his labour :) which was not cheap.

    You can also have your clothing sent in separate, under $1000 lots. You will not have to pay import fees/GST. Depending on the amount you import, some courier services will offer you discounted rates. Do make sure the boxes come in spaced apart though, as I had a couple arrive in the country at the same time and had to end up paying duty/GST. EMS shipping is fairly reasonable from China and some other Asian countries. Still, I have found that getting smaller lots in end up making my cost/item much higher — but if you don’t have a lot of cash to outlay at the beginning, that is one option.

    If there are any concessions I’d love to hear about them — but I think in the end it’s really just all part of “the cost of doing business” which is an inevitability when it comes to starting out with your own business.

    #1138508
    LucasArthur
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    leena, post: 157974 wrote:
    I was wondering if anyone knows of any special concessions or startups that lower the costs? I know these things are unavoidable but it’ll be good to know if there are ways that help new businesses get off the ground.

    Hi Leena

    Would love to know this myself, although i do not believe the government are handing out many as a concession to those wanting to import… Wish they would, i’d be on the boat immediately… :D

    As others have indicated, its merely a cost to going into business and as for additional costs.. really, apart from the 5% duties and 10% GST, its merely just the cost of getting your goods here that can vary which you need to locate a great agent etc etc in order to ensure you are not being taken advantage of.

    Also, these costs can be seen as an obstruction (which sounds like you may be doing) or you can merely factor it into your product cost as does everyone else.. Further to this, if getting your items here are becoming too expensive and you cant ‘afford’ these additional fees.. maybe you may want to look into your start up costs and financing requirements (not referring to loans, more capital injection to get started)…. This is a hurdle many of us have absorbed, and many still are years to come…

    The more specific your query, the FS community will certainly try and point you in the right direction.. personally, i have found this group very accommodating and its much appreciated.. TY FS>.

    Good luck, keep us informed and keep pushing through,.. its worth it..

    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1138509
    Matt Icon Logistics
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    Hi Leena,

    The Import Duty Rate on Textiles/Clothing and Footwear ranges from Duty Free to 10%. GST is charged on top of this, so the Duty amount forms part of the value that GST is calculated on.

    Duty % based upon FOB

    GST 10% x (Value of Goods FOB + Intl Freight + Intl Insurance + Duty)

    You need to take into account the origin of the clothing in order to determine the duty rate. Australia now has many Free Trade Agreements in place, as well as preferential rates for other countries.

    There are other requirements such as labelling that must also be complied with in order to import.

    As suggested you could order consignments not exceeding AUD$1000 in order to avoid paying Duty and/or GST, however you need to ensure if you are making more than one order that you allow sufficient time for the first order to be shipped prior to ordering the next consignment. If the two consignments are shipped on the same vessel or aircraft they are considered to be one “consignment’ and you will have exceeded the undervalue threshold and will now be subject to Duty and/or GST

    Regards

    Matthew

    #1138510
    Matt Icon Logistics
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    Hi Leena,

    The Duty rates for garments varies between Duty Free and 10%. There are many factors that affect this rate, including origin.(which would require specific documentation)

    It is possible to legally avoid Import Duty and/or GST by ordering consignments under AUD$1000, but if you choose to do this, you need to allow time in between orders to ensure that the previous order has been shipped. If you place two seperate orders and pay separately they are considered to be one ‘consignment’ in the eyes of Customs f they arrive on the same aircraft/vessel..

    Garments also have specific labelling requirements that need to be met. I would suggest getting this done overseas as it is significantly cheapr than doing it here.

    You will also need to factor in additional charges for Intl Freight, handling, local charges, clearance delivery etc…

    I would suggest contacting a local freight forwarder/broker to discuss these as you should agree on rates prior to shipping to avoid suprises..

    If you have any more questions please do not hesitate to ask..

    Regards

    Matthew

    #1138511
    Anonymous
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    Hi Matthew,

    Sorry that one of your posts got stuck in our moderation queue for a while there. I’ve left them both in place as the info they contain seems to be slightly different.

    Cheers,
    Jayne

    #1138512
    macintosh_addict
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    leena, post: 157974 wrote:
    Hi,

    There are heaps of extra taxes and duties that kick in once you import goods such as clothing, I was wondering if anyone knows of any special concessions for startups that lower the costs? I know these things are unavoidable but it’ll be good to know if there are ways that help new businesses get off the ground.

    Thanks

    The customs charges no tax or duty for goods under $1000. Think if its worth it for you to split up the shipment and make each consignment under the threshold.

    Johnny

    #1138513
    LucasArthur
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    macintosh_addict, post: 158721 wrote:
    The customs charges no tax or duty for goods under $1000. Think if its worth it for you to split up the shipment and make each consignment under the threshold.

    Johnny

    Oh Johnny,

    Although this is correct, you may have a few people advising against this practice.. i am not sure of the exact phrasing although i think if customs found you were deliberately trying to avoid paying taxes by spreading the invoice over several shipments that they may get a little upset.

    Something along the lines of if it is a commercial invoice from one supplier exceeding the $1k you must pay….

    Might want to speak to a freight forwarder who knows better than i, although i would tread carefully if you opt to do this..

    Shouldnt you just pay the taxes and add the fees as a part of your business expense? just curious?

    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1138514
    macintosh_addict
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    SimplyReplica, post: 158751 wrote:
    Oh Johnny,

    Although this is correct, you may have a few people advising against this practice.. i am not sure of the exact phrasing although i think if customs found you were deliberately trying to avoid paying taxes by spreading the invoice over several shipments that they may get a little upset.

    Something along the lines of if it is a commercial invoice from one supplier exceeding the $1k you must pay….

    Might want to speak to a freight forwarder who knows better than i, although i would tread carefully if you opt to do this..

    Shouldnt you just pay the taxes and add the fees as a part of your business expense? just curious?

    Jason

    Hi Jason,

    They can be counted towards your business expenses. And GST is also claimable if your registered.

    There’s is nothing wrong with splitting up the shipment and the customs has no base to charge you if your consignments are genuinely under $1000.

    From my perspective, your main concern should the extra shipping cost involved in splitting shipments. The base rate is usually the highest part of any international postage. If the extra postage is higher than duty and taxes you are required to pay, then just don’t worry about this option.

    Also customs has strict definition for “consignment” that you might want to look up.

    Cheers!
    Johnny

    #1138515
    Cat – GLC
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    For all those that are promoting that splitting the shipments up so that they are under the $1,000 threshold, I thoroughly recommend that a little more investigation is done as to the legalities of this.

    A good place to start is here Low Value Import Threshold Enhanced Compliance Campaign Report

    Cheers

    Cat :)

    #1138516
    macintosh_addict
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    Cat – GLC, post: 158793 wrote:
    For all those that are promoting that splitting the shipments up so that they are under the $1,000 threshold, I thoroughly recommend that a little more investigation is done as to the legalities of this.

    A good place to start is here Low Value Import Threshold Enhanced Compliance Campaign Report

    Cheers

    Cat :)

    Hi Cat,

    Thanks for your input.

    The article is quite informative.

    However what I have suggested was to split the shipments/orders into smaller CONSIGNMENTS, not to split consignments into smaller parts. In other words, one place orders of smaller values rather than placing a bulk order. If a consignment’s value is genuinely lower than $1000, there should be no duty or tax at all. However as I said, this may increase the shipping costs as sending multiple consignments means multiple base rates charged by couriers.

    The definition of consignment can be found here http://www.customs.gov.au/webdata/resources/files/PS200923-ig-Defintion_of_Consignment.pdf.

    Cheers!
    Johnny

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