Moves by the Australian government to restructure the Import Processing Charge (IPC) to recover the costs of all import-related cargo and trade functions undertaken by the Customs and Border Protection Service have been slammed by advocacy body Freight & Trade Alliance (FTA).
Paul Zalai, director FTA, described the magnitude of the IPC increase as “staggering”, and said he was concerned about the level of consultation by the government on this issue. For consignments valued over A$10,000, the IPC for electronic sea import declarations will be increased by A$102.60 to A$152.60 per consignment, while the IPC for electronic air import declarations will be increased by A$81.90 to A$122.10 per consignment. For consignments valued over A$1,000 and up to A$10,000 the IPC will remain at current levels: A$50.00 for electronic sea import declarations and A$40.20 for electronic air import declarations. The IPC is not applied to consignments valued at A$1,000 or less. The new charges come into effect on 01 January 2014. Zalai said the rationale for imports to cross-subsidise exports is generally accepted (allowing exports to be exempt from IPC), however the need for the same model whereby commercial import consignments are subsidising IPC-exempt low-value consignments needs to be questioned. “While retailers have been making strong statements, arguing whether internet trade should be exempt from paying duty and GST, I believe the ‘sleeper’ in public debates to date has been that low value consignments are also exempt from IPC. Perhaps the government has awoken the sleeping giant and this will resurrect arguments of equity and fairness of tax-free low value consignments.” While commercial importers will now either wear this cost or pass it on to the end consumer, Zalai says there are other intermediaries affected by this. “Customs brokers commonly pay duty, GST and IPC on behalf of importers with periodic invoicing to recover these costs along with service fees,” said Zalai. “It is not uncommon for smaller to medium size customs brokers to complete 500 to 1000 import declarations per month. In an already highly competitive market place, where are they going to find the cash flow to pay the additional hundreds of thousands of dollars per year for IPC?
IPC hikes will pressure brokers - FTA
AirCargo Archive Stories #223
Monday, 27 May 2013
Moves by the Australian government to restructure the Import Processing Charge (IPC) to recover the costs of all import-related cargo and trade functions undertaken by the Customs and Border Protection Service have been slammed by advocacy body Freight & Trade Alliance (FTA).
Paul Zalai, director FTA, described the magnitude of the IPC increase as “staggering”, and said he was concerned about the level of consultation by the government on this issue. For consignments valued over A$10,000, the IPC for electronic sea import declarations will be increased by A$102.60 to A$152.60 per consignment, while the IPC for electronic air import declarations will be increased by A$81.90 to A$122.10 per consignment. For consignments valued over A$1,000 and up to A$10,000 the IPC will remain at current levels: A$50.00 for electronic sea import declarations and A$40.20 for electronic air import declarations. The IPC is not applied to consignments valued at A$1,000 or less. The new charges come into effect on 01 January 2014. Zalai said the rationale for imports to cross-subsidise exports is generally accepted (allowing exports to be exempt from IPC), however the need for the same model whereby commercial import consignments are subsidising IPC-exempt low-value consignments needs to be questioned. “While retailers have been making strong statements, arguing whether internet trade should be exempt from paying duty and GST, I believe the ‘sleeper’ in public debates to date has been that low value consignments are also exempt from IPC. Perhaps the government has awoken the sleeping giant and this will resurrect arguments of equity and fairness of tax-free low value consignments.” While commercial importers will now either wear this cost or pass it on to the end consumer, Zalai says there are other intermediaries affected by this. “Customs brokers commonly pay duty, GST and IPC on behalf of importers with periodic invoicing to recover these costs along with service fees,” said Zalai. “It is not uncommon for smaller to medium size customs brokers to complete 500 to 1000 import declarations per month. In an already highly competitive market place, where are they going to find the cash flow to pay the additional hundreds of thousands of dollars per year for IPC?
