PRODUCTION ASSIST COSTS – FORMING PART OF CUSTOMS VALUE
In recent times the Department of Immigration and Border Protection ( DIBP ) have increased their auditing focus on Customs valuation and, in particular, Production Assist Costs ( “Assists” ).
BRi would like to remind all customers that “assists” must be included in the value of imported goods when making a declaration to Customs ( DIBP ).
What are Production Assist Costs (“assists” ) ?
Assists relate to assistance ( ie. goods, materials or services ) provided to a foreign supplier by an Australian buyer of imported goods. Where such assistance is provided free of charge or at a reduced cost the actual cost of this assistance ( to the Australian buyer ) must be included in the value declared to the DIBP upon importation and is therefore dutiable.
Categories of Assists
The following list of goods, materials or services can be categorised as dutiable assists :-
a) materials, components or other goods that form part of the imported goods
b) materials consumed in the production of the imported goods
c) tools, dies, moulds or other machinery or equipment used in the production of the imported goods
d) art work, design work, development work and engineering work (including models, plans and sketches) – the design of which has been undertaken outside Australia
e) inputs in the production of the goods referred to in (a) to (d) above
f) overseas transportation and packing costs relating to (a) to (e) above
g) foreign customs duties, sales tax, or other duties or taxes on production tooling, work goods or subsidiary goods
h) repairs or modifications to the materials, components, subsidiary goods, tools, dies, moulds, and other goods referred to above.
Example of an assist
An example of a transaction involving “Assists” would be an Australian furniture importer providing Australian fabric to a Chinese manufacturer for incorporation into Australian imported sofas. If the fabric is provided free of charge, or at a reduced price, to the manufacturer then the actual value of this fabric would need to be included in the Customs value on the Customs import declaration. Furthermore, it is important to note that any transport costs, taxes or fees incurred to ship the fabric to the manufacturer must also be declared. Whether the goods are duty free or not is irrelevant as importers are obliged to report accurately to the DIBP and could potentially be subject to penalty provisions should any under-valuation be detected.
Should you have any concerns or questions in relation to assists please do not hesitate to contact your BRi Customs Broker.
Keeping you updated,
BRi Customs Department
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