TALKING POINTS - Solving the Customs Duty and GST dilemma

I want to raise the issue of the payment of Customs Duty & Goods and Services Tax (GST).

Why do we offer credit on Customs charges? I would suggest that competition made us do it.

I know that not all importers are getting credit but there are many getting it that shouldn’t be.

We do not make any margin on these charges!

The Australian Tax Office ruling is that we cannot claim input tax credits that we paid on behalf of the Australian registered importer.

That means if we don’t get paid then it is a write off like the duty.

When GST was introduced they said GST would not be a tax on business – that is unless you are a customs broker. 

I am sure we are all under increased pressure with the slowing economy.

It is far easier to import today than it was yesterday because of the internet so there are a lot more people importing but without the skills to sell their product.

Other importers are struggling so we are at greater risk today than ever before.

If the customer pays up front then our risk is eliminated - at least with those charges.

My part solution is that the industry draws up a recommended practice for payment of Customs charges.

We cannot make it mandatory!

I contacted the Australian Competition and Consumer Commission and they told me it would be okay to give a recommendation as long as it was not mandatory.

This seems to be the best way forward -- for brokers and forwarders to find a way to assist customers to pay these charges up front.

Perhaps we should investigate what is happening in other countries and how they deal with it.

I heard the UK had a better system.  

I don’t think I am alone in saying this is a very big issue.

This is an issue that should be discussed by business owners or financial officers because they are the ones in control of the company’s finances. 

Jeff Harrod is managing director of Austral-Asia Freight

Should it be up to brokers to push for a better system? How important is it that the Customs duty and GST issue be addressed? What should be the priority?

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