The below is to advise on some important changes to legislation which have just been implemented in relation to Import GST, effective 1st October 2016. Unfortunately we were given very little notice of this policy change, so changes must be made at the last minute.
As you may be aware, Import GST is calculated along with Customs Duty as part of the Customs Clearance process. Included in the calculation for Import GST are the costs incurred for Ocean Freight and Ocean Insurance (where applicable). We have traditionally been able to provide DIBP with accurate figures for Ocean Freight as the greater majority of freight is shipped through our service, and up until Friday 30th September, we were permitted to use an estimate for the Ocean Insurance of 0.25% of the FOB value. Basically this meant we were not required to confirm freight or insurance values with our clients per shipment.
What has changed?
DIBP have now issued notice 2016/33 which has the following effect:
The previously permitted estimate of 0.25% of the FOB value has been removed
Exact amounts for both Ocean Freight and International Insurance are required
Where exact amounts are not available, an estimate of 10% of the FOB is now allowed to cover both the Ocean Freight and Ocean Insurance amounts used to calculate GST
What is required of importers shipping through Navia’s service?
All above considered, the only effect is that our Clients will need to advise insurance amounts where possible (we already have the accurate freight amounts).
What if I cannot provide this amount?
Some importers ‘self-insure’ or in other words don’t have insurance (Ex-Works, FOB or CFR consignments), in this case the value will be zero – we just need to be advised
Some importers have blanket policies which cover 12 months of shipping – in this case a factor can be used (please discuss with our Brokerage Team)
Some importers do not have access to this information at all
In cases where importers are not able to provide the Ocean Insurance amount at all, we must use an insurance figure that is soundly based and approximates the amount actually paid or payable.
If later you are able to identify the correct Insurance amount we can amend the entry and possibly refund some GST back to you.
Please do not hesitate to contact our Customs Brokerage Team on 03 9331 5715 where we will be able to assist with any queries.