Calling Arjunajane re AUSFTA??

[loveloveloveit]

Hi AJ,

Following your kind offer to help in CushionNovice''s post regarding the import duty and tax applicable on purchasing coming into Australia, I was hoping you might give me the "abridged" version of the previous post you did on dealing with customs and Fedex.

My situation (hopefully simply) is as follows:

I live in Melbourne and have purchased a diamond and setting from BGD. The ring will obviously arrive completed in approximately a week, and of course Denise at BGD is happy to do whatever is necessary to ensure I can get it into Australia with minimal fuss.

The overall invoice is approximately $3350USD.

So, firstly, are you able to guide me as to what information I need BGD to provide and does it need to be clearly visible through the clear resealable docket section on the box? I read somewhere (I think) that it needs to very obvious that it should be duty free, but is that the right terminology?

Also, I have assumed (most likely incorrectly I think) that the duty and/or GST would be calculated on the USD dollar amount, but now I realise they probably convert that to AUD - is that right?

Finally, I have read in several spots that the fees are calculated well before the parcel hits Australian soil, and therefore I would prefer to avoid having any sort of "dealer" involved. Can I avoid this, and therefore avoid the dealer fee?

ANY information you can provide is so immensely appreciated. Thanks a million AJ (and anyone else with advice or knowledge on this subject). I am fine to pay the duty that is due, but for obvious reasons far prefer to avoid unnecessary expenses along the way.

Cheers

 

[heliotrope]

hey there loveloveloveit

just my experience...

BGD was so damn fast in finishing my earrings and sending out my parcel that by the time I tracked the parcel it was already here in oz!!

I was originally told it would take 10 to 14 days to make the earrings + 3 days for shipping

but in fact I created the wire late on a Thursday (AU time) - it went through Saturday (again AU time) and the parcel got here the next Thursday

amazing service from BGD - but it caught me on the hop as I missed the opportunity to call Fedex

as it all happened much faster than expected - I was stung with the duty - which I am going to claim back

so maybe make sure the paperwork is 100% sorted and that you follow up the parcel the moment it leaves BGD with Fedex

also note if you are stung on the duty - this is on the value of the goods + the freight in AUD (calculated by USD exchange rate of the day) at a rate of 5%

THEN you are charged GST on top at a rate of 10%

if the goods correctly clear customs without the duty - you will only need to pay the GST (10%)

you will need to pay some sort of Fedex clearance or brokerage fee - I recall mine was about AUD55??

sorry I can not help too much more than that

 

[pancake]

Have a look at this thread - it is pretty comprehensive.

The shipping company determines the processing of the customs paperwork - you cannot step in and thereby avoid the process.

 

[arjunajane]

hello loveit-just wanted to let you know I''ve seen this and will get onto it tomorrow. If I were you I would avoid having BG send the ring until you have all the ppwk in order and know what needs to be done- like Heli''s example once it gets sent it usually gets here pretty quickly

Will follow up your questions in detail tomorrow

 

[arjunajane]

edit:double post,sorry.

 

[arjunajane]

Hey again loveit,
ok please see answers below:

Date: 6/2/2010 6:31:52 AM
Author:loveloveloveit
Hi AJ,


Following your kind offer to help in CushionNovice''s post regarding the import duty and tax applicable on purchasing coming into Australia, I was hoping you might give me the ''abridged'' version of the previous post you did on dealing with customs and Fedex.


My situation (hopefully simply) is as follows:


I live in Melbourne and have purchased a diamond and setting from BGD. The ring will obviously arrive completed in approximately a week, and of course Denise at BGD is happy to do whatever is necessary to ensure I can get it into Australia with minimal fuss.


The overall invoice is approximately $3350USD.


So, firstly, are you able to guide me as to what information I need BGD to provide and does it need to be clearly visible through the clear resealable docket section on the box? I read somewhere (I think) that it needs to very obvious that it should be duty free, but is that the right terminology?

Lesley is familiar with this process so she should be able to inform Denise how to complete your import declaration (the paper FedEx will use to calculate taxes).

BG will use a harmonized tariff code which denotes your ring is eligible for a ''preferential duty rate'' under the Aus - US Free Trade Agreement (that is the correct terminology - basically it just means you pay 10% GST but not 5% import duty).
As well as the harmonized tariff code, I would also suggest they write on the import dec and on the invoice "Eligible for AUSFTA - Rule Type PS".. This should help the broker not to overlook it.

If you want to be 100% sure, I would ask Denise to fill out one of these forms, as per Lestat''s example from the FTA thread, and include it with the other ppwk
This form also explains what "Rule Type PS" means. BG will be able to access a new one from the Au Customs website.

I think it doesn''t hurt to make it as obvious as possible, as you can see by poster''s examples the broker''s do tend to stuff it up quite a bit.

 

[arjunajane]

Date: 6/2/2010 6:31:52 AM
Author:loveloveloveit

Also, I have assumed (most likely incorrectly I think) that the duty and/or GST would be calculated on the USD dollar amount, but now I realise they probably convert that to AUD - is that right?

Yes, they convert the USD amount to AUD to calculate taxes - however, an important distinction to make is that it is calculated using the exchange rate that was applicable at date of purchase / date on your invoice *not* the exchange rate of the day it is imported. This is stated on the Customs website.
This has been bought up a couple times, and I think it''s an important thing to note as it could make a pretty big difference to your disadvantage if rates had changed dramatically between the time you purchased your ring, and when it arrives in Aust.

If someone suspects their duty has been calculated using the incorrect exchange rate to their disadvantage, they should take it up with customs.

Finally, I have read in several spots that the fees are calculated well before the parcel hits Australian soil, and therefore I would prefer to avoid having any sort of ''dealer'' involved. Can I avoid this, and therefore avoid the dealer fee?


ANY information you can provide is so immensely appreciated. Thanks a million AJ (and anyone else with advice or knowledge on this subject). I am fine to pay the duty that is due, but for obvious reasons far prefer to avoid unnecessary expenses along the way.


Cheers

As has already been mentioned by Heli and pancake, there is no way to avoid the processing fees charged by the FedEx brokers - well, unless you become registered as an importer yourself and learn how to do all the ppwk - personally I would rather pay the fees

As Heli mentioned, I believe it is around $55.

I am not sure where you have read that the duty is calculated before it gets to Australia - this is very odd, and if you think about it, not really possible.
Once BG send your package, it is in transit for ~3 days, then it arrives in customs and than goes to FedEx to be delivered on to you.
There is nobody else in this process except Australian customs and FedEx brokers who are concerned with your import taxes.




Sorry, one thing I forgot to note on your first question - and I feel this is quite important:
As soon as BG have generated a shipping number for your package, you need to phone FedEx and make them aware that your item is eligible for preferential duty under the FTA.
If the person you speak to does their job properly, than a note will be put on the system against your shipment to notify the broker when it arrives.

Here is some advice on how to do so::
- When your shipment is due to leave and you have an Airway Bill Number from your vendor, call FedEx on 1800 111 112.

-Advise them that you have sufficient information and paperwork from the manufacturer to claim preferential tariff rates under the AUST-US FTA.

-Ask that a note be put on the system stating as much, so that when your shipment arrives the broker handling it is made aware of your intentions and processes it accordingly.


Hope that helps loveit and is a bit easier to follow than the other thread
please feel free to ask anything else should you need.

Cheers
AJ.

 

[pancake]

Date: 6/3/2010 3:17:17 AM
Author: arjunajane
I am not sure where you have read that the duty is calculated before it gets to Australia - this is very odd, and if you think about it, not really possible.

Hey AJ, I believe that^^ may be from my posts on the other threads, as it is what happened to me. It sounds extremely odd and quite impossible as you say - but true.

I bought a ring from Leon Mege and it was shipped to me from NY as is usual. As soon as they gave me the shipping number for FedEx, I rang FedEx locally, spoke to the Customs department and asked them to put a note on the system, explaining why. They said they couldn''t do it until the parcel hit Australia (I believe this is in fact untrue), and to call again when the parcel reached Australian shores.

I received a call from FedEx asking me to pay the full 10% GST plus 5% duty within hours of making that call. At the time the parcel was in Memphis TN - it in fact did not hit Australia for more than 24 hours after that.

The rest is history - I had to pay the full amount etc and later claimed a refund directly through Australian Customs.

During my dispute with FedEx I asked them repeatedly how it was possible to calculate the duties and taxes that were applicable before the parcel even entered the country. I was told that when the processing looks "straightforward" that the individual broker allocated to the parcel may expedite the process as was done in my case. However, if any "non-straightforward" circumstances came to light AFTER that expedited process had been done, it could not be reversed - ie. in my case even though all the documentation was available, I still had to pay the 5% or the FedEx dispute fee.

It appears that the shipper (ie BGD or whoever) needs to make the duty exemption under AUSFTA explicit on the exterior of the package. As we saw in CushionNovice''s case, it doesn''t seem enough even if the paperwork is inside the plastic pocket on the outside - it needs to be clearly visible without FedEx making any effort

Even then I am not sure if there is consistent success in not being charged the duty. It still seems very ad hoc to me.

AJ''s advice is excellent and thorough though - all you can do is be as thorough as you can and hope that FedEx gets it right.

 

[loveloveloveit]

Thank you so so so much AJ for your "abridged" version of requirements, I will follow them and hope for the best! Luckily for me the 5% would not be a ridiculous amount seeing as my initial purchase is not nearly as considerable as many, however obviously I would love to avoid a) the fee and b) the hassle of claiming it back if at all possible. I''ll let you know how I go, and provide Denise with these various instructions. Thanks again.

Thanks also to Pancake and Heli for your contributions and explanation of your experiences.

 

[hawaiianorangetree]

Date: 6/3/2010 3:17:17 AM
Author: arjunajane


Yes, they convert the USD amount to AUD to calculate taxes - however, an important distinction to make is that it is calculated using the exchange rate that was applicable at date of purchase / date on your invoice *not* the exchange rate of the day it is imported. This is stated on the Customs website.
This has been bought up a couple times, and I think it''s an important thing to note as it could make a pretty big difference to your disadvantage if rates had changed dramatically between the time you purchased your ring, and when it arrives in Aust.

If someone suspects their duty has been calculated using the incorrect exchange rate to their disadvantage, they should take it up with customs.

Hi AJ, i was wondering if you could clarify something for me on the point above. Is this only applicable for jewelry/adornments when importing into Australia that the duty is charged from the date of purchase, not the date it enters the country?

The reason I ask is because i bought my wedding dress in June last year when the dollar was at about 73 cents, with the total cost coming to about $1100AU, i had factored in the duty to my cost and was prepared to pay for it but the dress wasn''t delivered until mid Feb this year when the dollar was at 90cents, and i didn''t have to pay duty on it as the AU had dropped to under $1000 at the time of import (even though i paid more than $1000 for it). I called customs and a lady clarified for me that they used the exchange rate from the day it entered the country.

So yeah, i am mainly just curious to see if it is different rules for different products.

Thanks!

 

[hawaiianorangetree]

Ha! I just went and looked at the customs website and found another version of events.

No wonder everyone gets told something different. Not even customs can give one straight answer.

The customs value of imported goods must be expressed in Australian currency. If it is expressed in a foreign currency it must be converted into Australian currency at the rate of exchange prevailing on the day of export of the goods (not the day the goods arrive in Australia). This rate is specified by the CEO of Customs (section 161J of the Customs Act 1901).

 

[arjunajane]

Date: 6/3/2010 9:35:19 AM
Author: hawaiianorangetree
Ha! I just went and looked at the customs website and found another version of events.


No wonder everyone gets told something different. Not even customs can give one straight answer.

The customs value of imported goods must be expressed in Australian currency. If it is expressed in a foreign currency it must be converted into Australian currency at the rate of exchange prevailing on the day of export of the goods (not the day the goods arrive in Australia). This rate is specified by the CEO of Customs (section 161J of the Customs Act 1901).

Hey hawaiian,
that is really odd - the reason I made that statement is I had seen it previous on the Customs website (what you posted above) and also been told the same by customs in a couple different discussions - moreover, I actually double checked the exchange rate calculation on a couple of my imports as (opposite to your story) the exchange rate had changed but not in my favour. Whenever I checked it, I found they had used the rate applicable at the date of my purchase, not import..

Like you say, I think it just depends on who you get on the day with these people!
I do not believe there would be different exchange rate policies for different products, nope - perhaps they just felt like being nice on that day with your pretty new wedding dress, and at least the decision was in your favour

 

[heliotrope]

Hey Guys

I am sure it is done at the rate on the day

I work in fashion and create import costings on my developments for a living (in quoting to local and oseas buyers)

what sucks is you can quote to a client based on today''s exchange which may then rise or fall by the time you get the goods produced and shipped into Australia

so on importation you either gain or lose against what you planned for

don''t even get me started on how the AU/USD has fluctuated over the past year!!

 

[arjunajane]

Date: 6/4/2010 1:08:16 AM
Author: heliotrope
Hey Guys


I am sure it is done at the rate on the day


I work in fashion and create import costings on my developments for a living (in quoting to local and oseas buyers)


what sucks is you can quote to a client based on today''s exchange which may then rise or fall by the time you get the goods produced and shipped into Australia


so on importation you either gain or lose against what you planned for


don''t even get me started on how the AU/USD has fluctuated over the past year!!

Hey Heli - I hear ya on the currency fluctuations - oy!

How would you respond then to the quote from the Au Customs website that hawaiian has referenced above?

I belive this quote comes from the section for buying over the internet, intended for individuals..
perhaps the rules are different for businesses?

Either way, I have done the figues and always found my fees in-line with the stated policy...
I guess it is just another one of those cases where they like to send mixed messages

 

[arjunajane]

Date: 6/3/2010 8:40:47 AM
Author: loveloveloveit
Thank you so so so much AJ for your ''abridged'' version of requirements, I will follow them and hope for the best! Luckily for me the 5% would not be a ridiculous amount seeing as my initial purchase is not nearly as considerable as many, however obviously I would love to avoid a) the fee and b) the hassle of claiming it back if at all possible. I''ll let you know how I go, and provide Denise with these various instructions. Thanks again.


Thanks also to Pancake and Heli for your contributions and explanation of your experiences.

You''re very welcome Loveit, I hope it helps and the process is smooth sailing for you

 

[arjunajane]

Date: 6/3/2010 4:24:23 AM
Author: pancake

Date: 6/3/2010 3:17:17 AM

Author: arjunajane

I am not sure where you have read that the duty is calculated before it gets to Australia - this is very odd, and if you think about it, not really possible.

Hey AJ, I believe that^^ may be from my posts on the other threads, as it is what happened to me. It sounds extremely odd and quite impossible as you say - but true.


I bought a ring from Leon Mege and it was shipped to me from NY as is usual. As soon as they gave me the shipping number for FedEx, I rang FedEx locally, spoke to the Customs department and asked them to put a note on the system, explaining why. They said they couldn''t do it until the parcel hit Australia (I believe this is in fact untrue), and to call again when the parcel reached Australian shores.


I received a call from FedEx asking me to pay the full 10% GST plus 5% duty within hours of making that call. At the time the parcel was in Memphis TN - it in fact did not hit Australia for more than 24 hours after that.


The rest is history - I had to pay the full amount etc and later claimed a refund directly through Australian Customs.


During my dispute with FedEx I asked them repeatedly how it was possible to calculate the duties and taxes that were applicable before the parcel even entered the country. I was told that when the processing looks ''straightforward'' that the individual broker allocated to the parcel may expedite the process as was done in my case. However, if any ''non-straightforward'' circumstances came to light AFTER that expedited process had been done, it could not be reversed - ie. in my case even though all the documentation was available, I still had to pay the 5% or the FedEx dispute fee.


It appears that the shipper (ie BGD or whoever) needs to make the duty exemption under AUSFTA explicit on the exterior of the package. As we saw in CushionNovice''s case, it doesn''t seem enough even if the paperwork is inside the plastic pocket on the outside - it needs to be clearly visible without FedEx making any effort

Even then I am not sure if there is consistent success in not being charged the duty. It still seems very ad hoc to me.


AJ''s advice is excellent and thorough though - all you can do is be as thorough as you can and hope that FedEx gets it right.

Hi Pancake,

Yes I remember your story - very strange practice indeed!
Excuse my mistake, I hadn''t realized the Au Fedex broker had "jumped the gun" and processed your shipment in advance of it arriving - that does go somewhat toward explaining it, however I would seriously hope they do not practice this on the regular for obvious limitations!

I guess the only thing that could have potentially helped in this scenario is having that note put on ths system via a phone call - I do know you tried, and I agree that they the reply you got is BS, based on other folk''s experiences that have been relayed.

Sorry you had such a drama

I agree, the best thing for it is making things as clear as possible and keeping at them - I would think the "3 pronged approach" I have described to Loveit should hopefully be sufficient!!

 

[hawaiianorangetree]

Date: 6/3/2010 12:26:13 PM
Author: arjunajane

Date: 6/3/2010 9:35:19 AM
Author: hawaiianorangetree

Ha! I just went and looked at the customs website and found another version of events.


No wonder everyone gets told something different. Not even customs can give one straight answer.

The customs value of imported goods must be expressed in Australian currency. If it is expressed in a foreign currency it must be converted into Australian currency at the rate of exchange prevailing on the day of export of the goods (not the day the goods arrive in Australia). This rate is specified by the CEO of Customs (section 161J of the Customs Act 1901).

Hey hawaiian,
that is really odd - the reason I made that statement is I had seen it previous on the Customs website (what you posted above) and also been told the same by customs in a couple different discussions - moreover, I actually double checked the exchange rate calculation on a couple of my imports as (opposite to your story) the exchange rate had changed but not in my favour. Whenever I checked it, I found they had used the rate applicable at the date of my purchase, not import..

Like you say, I think it just depends on who you get on the day with these people!
I do not believe there would be different exchange rate policies for different products, nope - perhaps they just felt like being nice on that day with your pretty new wedding dress, and at least the decision was in your favour

Thanks for replying AJ and Helitrope

I pulled that information from the page where all the exhange rate pdf''s are kept. I am sure you are right about different information being given on different parts of the website, as well as on different days and with different people....

Yeah i was lucky with my wedding dress, it was about the only small piece of luck i had with that thing!! lol

I can''t wait for the dollar to go back up so i can buy myself some earrings!

 

[CushionNovice]

Hi guys,
I know i''m late on this post however the gst/duty etc is charged at the rate on the day of the transaction. I learned that the hard way, when I purchased my GOG and JBeg setting the US TO AUD rates were really in my favour! However we sooo bad this week when they were working out the GST on the total value (which was WAAAAY more inflated that what I paid).

 

[whiteandginger]

Hi all,

I just recieved my ring last this week from BGD to Melbourne!!!

All you have to do is get someone from BGD to send you a letter via email stating that the ring falls under the aus trade agreement etc etc...(they have this letter already made up )

then call FedEx, speak to a broker and tell them to put a note on the tracking order stating that you have sufficient evidence for the ring to be excluded from duty tax. My FedEx broker then asked that I forward the letter from BDG to them and that was it!

Yay!

I hope it works for you too!

 

[arjunajane]

Date: 6/4/2010 7:18:04 AM
Author: CushionNovice
Hi guys,

I know i''m late on this post however the gst/duty etc is charged at the rate on the day of the transaction. I learned that the hard way, when I purchased my GOG and JBeg setting the US TO AUD rates were really in my favour! However we sooo bad this week when they were working out the GST on the total value (which was WAAAAY more inflated that what I paid).

CN,
can you please clarify as I''m not sure I understand your post -
do you mean "date of transaction" as in when you bought your ring?
Or do you mean date of importation to Aus?

I would like to know what occurred in your case, as it seems like everyone''s stories are different and I plan
on emailing customs soon to get a definitive answer on this.

As you say, it can really inflate the costs if it goes the wrong way.

 

[arjunajane]

Date: 6/4/2010 8:07:08 AM
Author: whiteandginger
Hi all,


I just recieved my ring last this week from BGD to Melbourne!!!


All you have to do is get someone from BGD to send you a letter via email stating that the ring falls under the aus trade agreement etc etc...(they have this letter already made up )


then call FedEx, speak to a broker and tell them to put a note on the tracking order stating that you have sufficient evidence for the ring to be excluded from duty tax. My FedEx broker then asked that I forward the letter from BDG to them and that was it!


Yay!


I hope it works for you too!

Hi whiteandginger,

Glad the advice given worked for you and hopefully future PS''ers transactions can go as smoothly

Also cheers for the info that BGD have a specific letter prepared - I was thinking this would be the case as I discussed the whole thing at quite length with Brian and Lesley after the original thread.



So that means a number of PS vendors such as GOG, BGD and WF are aware and actively helping their Aussie consumers with this practice - woot for people power!

 

[loveloveloveit]

OK AJ, thank you so much for your posting - I received the shipping notification today from BGD adn toniight have called Fedex and spoken to a nice man who put a note on the file regarding the FTA form in the pouch and the exclusion from the 5% duty ... now to wait and see, ho hum ho hum ho hum. Not so excited about the supposed 5 day wait until it arrives but otherwise happy happy happy. Hoping for some pics from BGD tomorrow to keep me engaged!

I will be sure to let you know if it does go as smoothly as it could based on your instructions.