Please be advised that the Department of Immigration and Border Protection ( DIPB ) have recently informed industry of changes in the way in which overseas insurance is calculated on customs import declarations where the incoterms are FOB.
In 1990 the DIPB informed industry that, in cases where overseas insurance is unknown, an amount of 0.25% of the FOB ( Customs ) value may be taken as an estimate and used on import declarations. This rule has been followed and accepted for the past 26 years. The DIPB have now instructed industry that the combined overseas freight and insurance amount is to be estimated as 10% of the FOB value in circumstances where the actual amount paid is not known at the time of clearance. This will have implications where GST is payable as these charges are taxed at the GST rate of 10%.
In light of this change in procedure, we suggest that import customs clearance clients of BRi inform our Customs team of any insurance premiums paid for shipments so that we can declare the correct amount on import declarations. BRi’s Customs brokers will also now begin requesting insurance amounts where necessary.
Please note that this change does not affect CIF consignments.
For further information, please see the DIPB’s recent notice to industry at the following link:-
Please feel free to contact the BRi Customs team should you have any further queries in relation to this matter.
Keeping you updated,
BRi Customs Department
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