Quick answer
Customs duty on goods imported into Australia depends on the goods' tariff classification, their customs value and where they were made. Rates vary by product, and many goods from free trade agreement partners can enter at reduced or nil rates if origin rules are met. Tariff concession orders, customs warehouses and Tradex can reduce or defer duty, while anti-dumping measures can add to it.
Key points
- Classification drives the duty rate — a wrong classification is a common cause of landed-cost blowouts.
- Free trade agreements can reduce duty, but only if the goods meet the agreement's rules of origin.
- Tariff concession orders allow concessional entry where there are no known Australian makers of the goods.
- Dumping and countervailing duties can apply to particular goods from particular countries.
What decides how much duty I pay?
The ABF’s starting position is that all goods imported into Australia are liable for duties and taxes unless an exemption or concession applies. How much duty you pay comes down to three things:
- Classification — where your goods sit in the Customs Tariff. Each classification has its own rate.
- Customs value — the value the rate is applied to, converted into local currency at the rate prevailing on the day of export.
- Origin — where the goods were made, which decides whether a free trade agreement rate can apply.
Get any of the three wrong and your landed cost is wrong. Classification is the one that most often catches importers out, because similar-looking products can sit in different classifications with different rates.
Why does tariff classification matter so much?
The tariff is detailed. A product’s material, function and construction can all change its classification. A “bag” might be classified by what it’s made of; a “light” by how it’s powered and used. Classification also affects whether an FTA rate, a TCO or an anti-dumping measure applies.
That’s why the best time to classify goods is before you place the order, not when the container lands. A licensed customs broker can classify your goods from the specification, and for complex or high-value lines you can seek a formal classification decision. See customs broker fees for what brokers do.
How do free trade agreements reduce duty?
Free trade agreements remove or reduce trade barriers between Australia and partner countries. business.gov.au notes that FTAs can reduce costs for imported materials, and points to DFAT’s FTA Portal, which includes a tariff finder.
To use an FTA rate:
- the goods must meet the agreement’s rules of origin — usually being wholly made or sufficiently transformed in the partner country
- you’ll generally need origin documentation — a certificate or declaration of origin in the form the agreement requires
- your broker claims the preferential rate on the import declaration
It’s worth asking your supplier early whether they can provide origin documentation. A lower duty rate also reduces import GST slightly, because duty is part of the GST base.
What concessions can reduce or defer duty?
| Scheme | What it does |
|---|---|
| Tariff concession orders (TCOs) | Concessional entry where there are no known Australian manufacturers of the same goods |
| Customs warehouses | Store goods under customs control and defer duty until they’re entered for home consumption |
| Tradex | Upfront exemption from duty and GST on goods imported for re-export or as inputs to exports |
| Duty drawback | Refund of duty on imported goods later exported (claims within four years for most goods, minimum $100) |
| Certain Inputs to Manufacture | Duty reductions on some inputs used in Australian manufacturing |
The ABF’s concession schemes page describes each. Customs warehouses are particularly useful for cash flow: rather than paying duty on a whole container at once, you pay as goods are released for sale.
What are anti-dumping and countervailing duties?
Australia has an anti-dumping system to address imported goods that are dumped (sold below normal value) or subsidised, where they cause or threaten material injury to an Australian industry. When measures are in place, extra dumping or countervailing duties can apply to particular goods from particular countries — sometimes from specific exporters. These can be substantial, so before ordering any new product line, ask your broker to check whether a measure applies to that product from that country and supplier. business.gov.au has an overview of the system.
Illustrative example
Illustrative only. An importer of outdoor furniture assumed a single duty rate across a mixed container. The broker’s classification found that the aluminium-framed chairs and the timber tables fell into different classifications, and that the tables qualified for a reduced rate under a free trade agreement if the supplier provided a declaration of origin. Getting that document before shipment reduced the duty on the tables and, with it, a little of the import GST. The importer now asks for classification advice on every new line before placing the order.
When is duty paid, and does it need funding?
Duty is paid before goods are released from customs control — unless they go into a customs warehouse. Unlike import GST, it isn’t refundable as a credit, so it’s a genuine part of your landed cost. It lands in the same week as import GST and your broker’s fees, just after you’ve paid the supplier’s balance and freight.
If the border bill is the payment that stretches you, see funding duty and GST at the border, or make a quick enquiry — there’s no credit check to ask.
How can I avoid duty surprises?
- Classify every new product before ordering, and keep a record of the classification used.
- Ask suppliers about origin documentation at the quotation stage.
- Ask your broker to check for dumping or countervailing measures on each new product and origin.
- Review whether a TCO exists for machinery or equipment you import.
- Recalculate landed cost when exchange rates move, because customs value moves with them.
- Build duty into the landed cost calculator at the rate your broker confirms, not a guess.
Get the border bill covered
Duty is a cost you can plan for but can’t claim back. If your next container’s border costs are going to be tight, start a Trade Loan enquiry. It’s credit-check free to ask, and your details go to a real person rather than a queue of lenders. Please give accurate figures for the order and arrival date, so we can point you to the right option first time.
Frequently asked questions
How is customs duty calculated in Australia?
Duty is generally a rate applied to the customs value of the goods, with the rate set by the goods' tariff classification and, where a free trade agreement applies, by their origin. Some goods have specific rates instead. A licensed customs broker can classify your goods and confirm the rate.
Are all imports subject to duty?
The ABF says all goods imported into Australia are liable for duties and taxes unless an exemption or concession applies. In practice, many goods have low or nil rates, particularly under free trade agreements.
How do I use a free trade agreement to reduce duty?
The goods must qualify under the agreement's rules of origin, and you'll usually need the right origin documentation from your supplier. DFAT's FTA Portal has a tariff finder that shows rates by agreement.
What is a tariff concession order (TCO)?
A TCO allows concessional entry of imported goods where there are no known Australian manufacturers of the same goods. If a TCO covers your product, it can reduce the duty payable.
Can I get duty back if I export the goods?
The ABF's duty drawback scheme lets exporters claim a refund of customs duty on imported goods that are later exported, either unused or as inputs to exported goods. Claims must generally be made within four years of export, with a minimum claim of $100.