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About to import products from China to Australia? This guide is a comprehensive introduction to everything that Australian importers must know, before getting started.
Keep reading, and learn more about Australian product safety standards, mandatory labeling requirements, GST, customs duties, and other import taxes.
As a bonus, this guide also includes an exclusive Import Cost Calculation Case Study, providing you with a tool for calculating all relevant taxes and fees in Australia.
Australian Product Safety Standards
Australia regulates products in many industries, including Children’s products, furniture, vehicles and chemicals in consumer products.
When importing from China to Australia, the buyer is responsible for ensuring compliance with all mandatory product safety standards, and compliance procedures.
As such, you must keep track of the following:
a. Product safety standards (i.e., AS/NZS standards)
b. Substance restrictions (i.e., AZO dyes)
For many products, you can easily assess the mandatory regulations on Government websites as the system is relatively easy to understand.
However, what is far more complex is the assessment of a Chinese manufacturer’s ability to ensure compliance with Australian product standards.
Normally, a supplier compliance assessment is based on checking existing compliance documents (i.e., test reports and product documents). However, this strategy is very hard to replicate, for importers in Australia – simply because so few suppliers can provide documents proving compliance with Australian standards and regulations.
In many industries, it can be a challenge to find suppliers with corresponding EU and US compliance documents.
et, it’s far more likely that a Chinese supplier can provide compliance documents valid in the EU or US.
Hence, Australian importers must research which EU or US standards correspond to their own, and then ask for these documents instead. If you are in the Apparel industry and want to assess a supplier’s capability to provide AZO free fabrics, you can just ask for an EU REACH SVHC test report.
If you’re importing bicycle helmets, in which case you must ensure compliance with AS/NZS 2063:2008 – Bicycle helmets, you should look-up the corresponding EN, ISO or ASTM standard. In fact, Australian product standards are in many cases entirely based on standards developed in the European Union and the United States.
Note: A list of regulated products is available on Productsafety.gov.au. However, this site does not include electronic product standards and regulations.
Watch this video to learn how to get your product made in China, Vietnam & India
Labelling Requirements for Importers
Australian importers must also ensure that the product, and its packaging, is correctly labeled. There are various types of Labelling requirements for Australian importers to keep track of:
a. AS/NSZ Labelling Requirements (as part of specific product standards)
b. Ingredients Labelling (mandatory for cosmetics and certain other products)
c. Country of Origin (Required for food products and imported goods that require a ‘trade description’)
d. Care Labelling (for apparel and other textiles)
e. RCM Mark (Replacing the A-Tick and C-Tick mark on electronic products)
Note that there is no uniform set of labeling requirements, applicable to all products. As such, you must confirm the labeling requirements that apply to your product.
Don’t assume that your supplier is even aware of the applicable labeling requirements. As such, you must provide them with ‘ready-made’ artwork and labeling files.
Selling on Amazon.com.au
Amazon requires that all products imported to Australia and sold on its platform are compliant with mandatory safety standards and labeling requirements. Amazon is actually more likely to request compliance documents (e.g. AS/NZS test reports) from a seller than the customs or other authorities.
As such, ensure that your product is fully compliant and tested before you start selling on Amazon.com.au.
E-Commerce fulfillment for Australian companies
Even at an early stage, Australian e-commerce companies tend to be outward looking. Many of our Australian customers selling on Amazon, or other market platforms, in the United States and Europe utilize fulfillment centers in Hong Kong.
As such, they can deliver products directly from China, to consumers in Europe, the United States and elsewhere – without the need to first import the products to Australia and pay GST and import duties.
However, I don’t recommend a cross-border fulfillment model for Australian companies selling into Australia, as the duty threshold has been abolished. Further, even foreign sellers are required to get GST registered, if they reach a yearly threshold. You’re better off importing the goods into Australia, assuming that is your main market.
Or, keep some stock left in Hong Kong for your international customers, while you import the rest into Australia for domestic sales.
Goods and services tax (GST)
Goods and services tax (GST) is payable when importing most products to Australia. This applies regardless of whether your company is GST registered.
In fact, even individuals importing from China (and elsewhere) are required to pay GST.
At the time of writing, the GST is set at 10%.
GST Import Cost Calculation
GST (10%) is calculated on top of the sum of the following:
Customs value (FOB Price) + Customs Duty + Shipping to Australia + Shipping Insurance
Below follows a Case study:
- Customs value (FOB Price) = AU$10,000
- Customs Duty = 5% x AU$10,000 = $500
- Shipping = $1,000
- Insurance: $20
GST = 10% x ($10,000 + $500 + $1,000 + $20) = AU$1152
Duty rates vary between 0% to 10%. However, most products imported from China to Australia, are taxed at around 5%.
Follow this link for a full list of Australian duty rates, listed by HS Code.
The Customs duty is calculated on top of the customs value:
Customs Duty = X.X% x Customs Value
Assuming a rate of 5%, and a Customs value of $10,000, you’ll pay AU$500.
You may submit a customs declaration directly to the authorities (electronic or paper filing), or get help to do this from your freight forwarder.
Import Processing Charge
The Import Processing Charge is based on the customs value.
However, unlike the Customs duty rate, the Import Processing Charge is not calculated as a percentage on the Customs value – but instead a fixed cost.
Below follows an overview.
FOB Value: AU$1,000 to AU$10,000
- Manual Declaration: AU$90
- Electronic Declaration: AU$50
FOB Value: Above AU$10,000
- Manual Declaration: AU$192
- Electronic Declaration: AU$152
Previously, the Import Processing Charge also depended on the mode of transportation (i.e., whether the shipment is delivered by Air or Sea). However, that is no longer the case.
Customs Value (CVAL)
Normally, the Customs value (CVAL) is based on the FOB (Free on Board) price. This includes the following:
- Unit price
- Transportation to the Port of Loading (i.e., Shenzhen or Hong Kong)
- Export Clearance Cost
As such, the following items are not included in the CVAL:
- Shipping to Australia
- Shipping Insurance
Click here to learn more about calculating the Customs Value (CVAL) when importing to Australia.
Import Licenses and Permits
Import licenses or special permits are generally not required for most consumer products. However, there are strict requirements in place for importing animals, plants, controlled substances and certain equipment.
Case Study: Total Tax Cost Calculation
|Cost / Tax||Calculation||Sum (AU$)|
|Customs Value (FOB)||1 x 10,000||10,000|
|Import Duty (5%)||5% x 10,000||500|
|Shipping Cost||1 x 1,000||1,000|
|Insurance Cost||1 x 20||20|
10% x (10,000 + 500 + 1,000 + 20)
|Import Processing Fee (Electronic)||1 x 152||152|
10,000 + 500 + 1,000 + 20 + 1,152 + 152
- Australia Product Safety Standards: What Importers Must Know
- Australia GST When Importing From Asia: A Complete Guide
- Import Duties in Australia When Buying From Asia: An Essential Guide
- Australia Import Processing Charge When Importing From Asia: A Complete Guide
- List of Sourcing Companies in Australia: Top 6 Agencies
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