Splashback

I refer to Jeff Harrod’s comments, regarding the collection of duty and GST from the importing community (Lloyd’s List DCN Online, May 19).
This has been an ongoing scenario (problem), since I first joined this industry.
Too many years ago to remember!
It has always been, and I believe will continue to be, the established practice that importers believed that the brokering community is their second and even third bank.
Unfortunately it has become the norm, for those who provided credit on duty, GST and freight, as a means to obtaining and keeping work; not relying on their expertise, skills, experience and ability.
Brokers cannot expect the logistics industry, be it brokerage or forwarding, to police the problem for them, by having some form of industry charter.
It is a hard world and very much a laissez faire-based commercial world, especially in the international trade logistics environment.
The industry compounds the problem by continuing to provide credit to these importers who seek it and even to those that do not; and most do it without obtaining a director’s guarantee from those businesses.
The answer is simple: Don’t provide credit or if you do, then ensure you personally police it and obtain director’s guarantees or ensure you obtain payment up front, prior to release of the consignment.
Peter A Hodder
Managing Director
Peter Hodder & Associates
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If it was simply a matter of getting money up front and director’s guarantees then it would not be a problem!
You are right – this has been a problem going back ages but we should not sweep it under the carpet – we should discuss it and see if there is a better way.
In New Zealand they defer both duty and GST which might encourage more importers to go onto the deferral scheme. We should discuss this further and not simply accept the current system.
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I agree Jeff, It is absolutely absurd that brokers are left out of pocket when an importer does not fulfil their obligations.
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Have your import customers register for direct debit/eft with Customs.
That way the duty/GST comes straight out of their account.
Importers should not risk sending duty payments via the brokerage because if the broker does not pass on the duty payment to Customs (due to fraud or insolvency), the importer will end up paying the duty twice. Customs will still demand payment.
Another solution is for Australia to adopt the New Zealand system where the importer pays Customs via a monthly account.
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Could not agree more Jeff. This is the biggest issue facing our company.
If we cannot make it mandatory for importers to pay their own duty and GST direct to Customs.
Then Customs should at least give us some terms for payment like most other first world countries.
Having to pay before release causes constant cash flow problems.
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Agree with this issue: may some serious discussion and negotiation come from this in these desperate economic times.
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We already make customers pay up front for GST & duty.
Big or small companies, it does not matter who you are, we get no credit so we make all companies pay up front.
We already run it this way and so should everyone else, we are not a bank.
Mark
ICAL.
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Unfortunately most brokers/forwarders need to act as a bank to clients in order to keep their business in these tough times – it is a service the client expects.
To try and force them on to direct debit/eft for duty/GST may force clients to utilise other brokers/forwarder services that offer terms to include duty/GST ( and generally freight etc.)
Every year when we update our LOAs we send out the direct debit forms – not many clients take this option up.