Do you buy goods from overseas?
Maybe you use online stores to shop for consumer items like books, jewellery, clothes, and toys? If the stores you shop at are overseas based you are most likely importing the goods.
From July, the New Zealand Customs Service will begin applying an import transaction fee (ITF) of $24.75 ($22 plus GST) to a range of personal imports that attract GST and import duty.
Generally the ITF will apply to goods valued over $400 but at times packages valued at less than $400 will attract the fee.
The fee will apply to all import items such as jewellery, clothing and electrical appliances.
A MAF Biosecurity system entry levy (BSEL) of $12.50 (including GST) will also be charged whenever an ITF is applied.
Customs says these import transaction fees are applied to cover the time and costs associated with processing imports and are used to fund border risk management activities.
More information
The New Zealand Customs Service have provided us with the following information in response to the questions and comments made by our members (see below). For more information see www.customs.govt.nz.
The New Zealand Customs Service notes the comments on the Consumer website relating to proposed changes which will mean that in future private importers of import shipments (commonly through the International Mail system) will be required to pay an Import Transaction Fee – in cases where revenue of over $50 is payable.
We are aware that this area can be confusing for people importing – especially those who do not import frequently.
The simple rule is that the issues of import duty, GST and any import transaction fees apply to an import consignment. A consignment is a package or a set of packages imported on the same day. If the consignment is of a value which will attract duty and GST exceeding $50, then it will be required to also pay an Import Transaction fee of $24.75 (including GST), and a Biosecurity Systems Entry Levy of $12.50 (including GST). The examples that we provided are designed to show how this system works.
In the first example, of a shipment of toys valued at $380 with freight cost of $19, the total value for estimating GST is $399 as no duty is payable (these items are duty free into New Zealand). However, even though no duty is payable, all imports into New Zealand are liable for GST. The GST that would be payable is $49.88. Under the Customs and Excise Act, if the duty and GST to be paid is less than $50, it is not collected.
So in this case, no GST is to be paid. In such cases no Import Transaction Fee or Biosecurity System Entry levy is payable either.
In the examples for clothes and jewellery, the duty and GST combined does exceed $50. In these cases the importer – or addressee, in the case of mail items – is liable to pay the duty and GST before the goods are released. Under the new rules they will also need to pay the Import Transaction Fee and the Biosecurity System Entry Levy.
These import transaction fees have up until now been paid on all commercial imports. The change means that they will be applied in future to personal imports, but only where duty/GST exceeding $50 is payable.
Tony Irvine correctly notes that if you haven’t paid duty and GST previously, in future you won’t pay these, and you won’t pay the import transaction fee either.
Faye King wonders if, when she buys a book valued at $30, will she need to pay the Import Transaction Fee? The answer is no. However, if she buys 15 books, totaling a value plus freight such that the liable duty and GST will exceed $50, and which arrive in a single shipment, then she will need to pay the duty/GST and the Import Transaction Fee, and the Biosecurity Systems Entry Levy.
This charge will apply to CD/DVD purchases – if the consignment is liable to pay duty and GST, collectively, of more than $50.
The Customs website has information on the specific items that are liable for duty as well as GST.
One of your correspondents has asked in what circumstances goods valued at below $400 will be liable for duty/GST and the Import Transaction Fee. We have indicated in the examples in the table above some goods which, valued at below $400, will still attract duty/GST and transaction fees. (For example, clothing valued at $250, depending on the freight cost, might be liable for duty/GST and the Import Transaction Fee and the Biosecurity Systems Entry Levy.)
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From the Customs website:
An import entry transaction fee of NZ$38.07 (GST inclusive) is payable on every import entry clearance and import declaration for goods.
Note: The fee includes the MAFBNZ biosecurity system entry levy of $12.77 (GST inclusive).
Rate: $38.07 (GST inclusive)
Does this now mean that all imports are subject to the ITF regardless of their value? I've trolled through the website, spoken to customs call centre and even tried to read the legislation(!) but there seems to be no clear answer.
For Christmas I received a bangle from Tiffany and co from my husband. He bought it in from the States. Problem began when it didn't fit and I needed a larger size. We sent it back to the states and they have sent us a larger size. Meanwhile it is sitting in customs and they will not release it until we provide evidence it was a repair or exchange. I have forwarded all correspondence which openly shows the transaction and that it was an exchange. I have provided the original consignment note from NZ post to show we sent it from here and why. I have also provided all receipts.
Meanwhile they need an importer code which I have done and now they require after 2 weeks of communication, an export certificate. I do not have one of these and have no idea what they are talking about.
It is now the 14th of Feb and no sign of my bangle. Yes it's value is over 1K.
Am I being given the run around? I think after all this if they expect the GST they just should have sent me the bill. I don't mind paying when fair is fair but I feel ripped off and my husband is totally over it. Tiffany and co offered us a refund on our credit card in the first place and we have been to Brisbane since and walked right past the tiffany and co store.
Janine :)
I understand having to pay GST on goods over a certain value imported into NZ. I don't have a problem with that. What I don't understand is how the NZ Govt can charge GST on an overseas postal service fees?
What do other people think?
I've bought four lots of clothing from the UK since July and I have only been charged an import duty once. The person at the Customs Call centre could not explain what their own policy was (even in the most general terms), and given this and the fact I cannot return my now very expensive goods to avoid the fee, it feels like entrapment to me.
I am NOT happy and I have written a letter of complaint to this effect.
There must be oodles of people buying things online internationally and government policy needs to be clearer than this. I'm prepared to pay my dues, provided I know what they are before I incur them via purchasing.
Grrrrr
What will happen when GST increases? Does this mean goods that are duty fee will not attract charges if they are less than $333.33, to keep them under the $50 limit, or will this limit be raised to $60 to keep goods under $400 GST free if there is no duty?
With the relentless march of inflation, this could mean a lot more work for Customs that may offset any revenue gained. Or is that what the new charges are about? Presumably Customs or someone will have modelled the existing situation to predict the effect on them.
Some people seem to be taking exception to this and I cannot see why... GST is a consumption tax that applies to almost all goods sold to NZ consumers while in NZ. When you buy goods within NZ from a local store, local companies make a profit, they pay local people wages, which they in turn spend locally. The tax that is collected pays for our roads, schools, hospitals. When you buy offshore, not only does the local retailer miss out on income and profit, the government loses tax revenue on all those <$50 that they waive, and they spend more tax dollars paying customs staff to process all the imports that they get nothing back for.
A healthy economy is an economy where the government generates enough tax revenue to pay for the greater good of society. This importing of goods rort has been going on for years and it good to see the government finally taking a tougher line on this. Now you will have to pay towards the real cost of importing goods which would otherwise deny the government and local businesses their cut...
And fair enough too.
Fairs fair guys - 20 years ago buying stuff over the Internet from offshore was unheard of and buying by mail order from offshore was relatively rare too. The government is simply playing catchup on all the GST that they are otherwise losing. Think of all the GST that the govt loses on all the millions of small lower value imports that did not incur GST. Think of the lost profits to NZ based retailers because you have purchased your goods offshore. Think of the man power required by customs to administer the growing tide of imports that they get nothing for. I'm not against people importing goods because I do it too, I am against people importing goods and not paying their dues. GST is a consumption tax that technically applies to almost ALL goods - just consider yourself lucky that GST is waived up to $50 - many countries it is not and GST is higher. Stop bitching about the govt doing what they are rightfully entitled to do.
I think Consumer should have referred to the rise in GST in October. This is even more expensive to us than the fee. Both in the value of the GST component and the fact that MORE parcels will be charged. The $400 charging threshold for non-duty items suddenly drops to $333.