Understanding the Australian import duty and tariff system, with many its exemptions and country of origin classes, can be rather complicated. In this article, we explain what Australian importers must know about import duty rates, HS codes, and tariffs:
- Country of origin classifications
- How to confirm the applicable HS code and duty rate for your product
- Chapters and sections
- How to (legally) reduce the import duty rate
- When to pay import duties
- How to calculate the customs value and import duty
- Other import taxes in Australia
Origin Country Duty Rates Overview
China to Australia Import Duties
Mainland China is classified as a Developing Country subject to DCS rates of duty. As such, many products imported from China to Australia are duty-free. That said, tariffs do apply to products of Chinese origin listed in Schedule 12:
Schedule 12 – Chinese originating goods
- Chinese originating goods – 1202.41.00 to 9619.00.49
Vietnam (ASEAN) to Australia Import Duties
Just like China, Vietnam is also classified as a Developing Country subject to DCS rates of duty. Hence, a large number of products manufactured in Vietnam are duty-free in Australia. All exemptions, for which you must pay an import duty, are listed in Schedule 8:
Schedule 8 – ASEAN-Australia-New Zealand (AANZ) originating goods
- AANZ originating goods – 2005.91.00 to 5702.49.90
- AANZ originating goods – 5702.50.90 to 9403.30.00
Notice that Schedule 8 is not only applicable to Vietnam but all ASEAN countries, such as Thailand, Malaysia, and Cambodia.
India to Australia Import Duties
India is also classified as a DCS country, to which special duty rates apply.
Tariffs by Product Category
Clothing and other textiles are listed in Section 11 – Textiles and textile articles, covering 14 chapters. While some textile products are duty-free, a 5 to 10% rate applies to most products in Section 11. Notice that duty rates for textiles tend to be slightly higher than for other product categories.
Electronics are classified in Chapter 85 – Electrical machinery and equipment and parts thereof:
- Chapter 85 – Goods – 8501 to 8511.90.00
- Chapter 85 – Goods – 8512 to 8525.80.90
- Chapter 85 – Goods – 8526 to 8535.90.00
- Chapter 85 – Goods – 8536 to 8542.90.00
- Chapter 85 – Goods – 8543 to 8548.90.90
Here are a few examples:
- Microwave ovens: 0%
- Toasters: 5%
- Multiple loudspeakers, mounted in the same enclosure: 5%
- Optical fibre cables: 0%
Watches are classified in Chapter 91 – Clocks and watches and parts thereof. As specified in the list below, most watches and watch parts are duty-free in Australia:
- Watches with mechanical display: 0%
- Watches with With automatic winding: 0%
- Digital watches: 0%
Furniture & Home
Furniture and other home products are classified in Chapter 94 – Furniture; bedding, mattresses, mattress supports, cushions, and similar stuffed furnishings. Most products in Chapter 94 are either duty-free or subject to a 5% duty rate.
Here are a few examples:
- Seats of cane, osier, bamboo or similar materials: 5%
- Dentists’, barbers’ or similar chairs and parts thereof: 0%
- Wooden furniture of a kind used in the kitchen: 5%
- Wooden furniture of a kind used in offices: 5%
- Mattresses: 0%
How do I know which tariff and duty rate applies to my product?
You should use the tariff classification databank on the Australian Home Affairs website, to identify the applicable duty rate for your products. The tariff databank provides a complete overview of product categories and origin countries.
Section 11 – Textiles and textile articles
– Chapter 50 – Silk
– Chapter 51 – Wool, fine or coarse animal hair; horsehair yarn and woven fabric
– Chapter 52 – Cotton
– Chapter 53 – Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn
– Chapter 54 – Man-made filaments
– Chapter 55 – Man-made staple fibres
– Chapter 56 – Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and – articles thereof
– Chapter 57 – Carpets and other textile floor coverings
– Chapter 58 – Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery
– Chapter 59 – Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind – suitable for industrial use
– Chapter 60 – Knitted or crocheted fabrics
– Chapter 61 – Articles of apparel and clothing accessories, knitted or crocheted
– Chapter 62 – Articles of apparel and clothing accessories, not knitted or crocheted
You’ll find a list of HS codes (e.g. 5201.00.00) within each chapter. In Chapter 52 – Cotton, for example, you’ll find the following list of HS codes:
|HS Code||Description||Duty Rate|
|5201.00.00||COTTON, NOT CARDED OR COMBED||0%|
|5204.11.00||COTTON SEWING THREAD – – Containing 85% or more by weight of cotton||5%|
|5205.11.90||COTTON YARN (OTHER THAN SEWING|
THREAD), CONTAINING 85% OR MORE BY
WEIGHT OF COTTON, NOT PUT UP FOR RETAIL
SALE:- – – Other
Note that the developing country (DC) rate is 0% unless otherwise specified. In the table above, you can read that the DC rate is only specified for 5205.11.90. However, it’s not specified for 5201.00.00 and 5204.11.00 – which therefore means that the DC duty rate is zero.
Also, note that the general rate applies to products from DCS countries, which includes China and Vietnam, unless a DCS rate is specified.
Use this checklist to assess the applicable duty rate for your products:
Step 1: Go to the Tariff Classification Page
Step 2: Confirm which chapter (e.g. Chapter 50 – Silk) your product belongs to
Step 3: Open the Chapter XX – Goods PDF (e.g. Chapter 50 – Goods)
Step 4: Confirm the most relevant HS Code (e.g. 5007.20.00)
Step 5: Confirm the applicable duty rate (e.g. 5%) and whether a reduced DCS rate applies (if not, the general rate apply)
Can I get a customs classification if there is no applicable HS code for my product?
If you’re importing, for example, watches or textiles, it’s easy to assess the applicable HS code and duty rate. But for certain products, it’s not that simple. If you find that none of the HS codes truly apply to your product, you can request a tariff classification.
As such, the customs authorities assess how to tax your product based on their existing tariff schedule.
How can I legally reduce the import duty?
The only way you can legally reduce the import duty is by lowering the customs value. In Australia, the import duty is calculated as a percentage of the customs value, which is the sum of the following:
- Total product cost
- Transportation to the Port of Loading (i.e., Shenzhen or Hong Kong)
- Export Clearance Cost
- Services paid for to the supplier (e.g. product development and design)
- Product samples, molds, and other tools
The following items are not included in the CVAL:
- Shipping to Australia
- Shipping Insurance
Hence, a reduced unit price or order volume results in a lower total importation value, which in turn reduce the payable import duty.
When do I pay the import duty?
The import duty is normally paid when the shipment arrives in Australia. You can either declare and pay the import duty directly to the customs authorities, or let a customs broker manage it for you. Normally, GST and the Import Processing Charge are paid at the same time.
The only exception is when you book a DDP (Delivery Duty Paid) shipment, in which case the import duty is pre-paid to the freight forwarder.
How do I calculate the customs value in Australia?
In Australia, the customs value (CVAL) largely corresponds to the FOB price of the goods, which includes the product value and transportation to the port of loading in the origin country. In addition, the customs value also includes costs for design services, prototypes, and tooling – essentially any payment to the supplier should be included importation value.
However, the customs value does not include shipping to Australia or related services (e.g. design or product development) provided by an Australian company.
Import Duty Calculation Example
In the example below, I assume a total order value of AU$10,000 and a tariff rate of 5%.
|Customs Value (FOB)||1 x 10,000||10,000|
|Import Duty (5%)||5% x 10,000||500|
|Shipping Cost||1 x 1,000 (Not included)||1,000|
What other Australia import taxes should I be aware of?
In addition to the import duty, Australian importers must also pay a Goods and Services Tax (GST) and the Import Processing Charge, based on the importation value. This is the case even if the products are duty-free. Please follow the links below to learn more:
- Australia GST When Importing From Asia: A Complete Guide
- Australia Import Processing Charge When Importing From Asia: A Complete Guide
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