New Customs notice on Incoterms and customs duty

The Australian Customs and Border Protection Service ACN 2014/36 advised of the revocation of ACN 2000/30. ACN 2000/30 represented Customs’ view from the year 2000 on the interaction between the relevant Incoterms and liability for customs duty.

Specifically, ACN 2000/30 clarified the previous position of Customs as to who the owner of imported goods was for Customs entry purposes, and who the importer was for Goods and Services Tax (“GST”) purposes in regards to Delivery Duty Paid (“DDP”) and Delivery Duty Unpaid (“DDU”) transactions.
In regards to DDP transactions, ACN 2000/30 stated that the overseas supplier is the owner for Customs purposes and the importer for GST purposes. This meant that the overseas supplier was liable to pay duty, duty short-paid or erroneously refunded, any penalty imposed and retain commercial documents.

In regards to DDU transactions, ACN 2000/30 also stated that whichever party was nominated to take responsibility for Customs clearance and acquittal of GST was regarded as the owner for Customs entry purposes and the importer for GST purposes.
While ACN 2000/30 was not legally binding on Customs, it did represent an important statement as to Customs’ position.  The revocation of ACN 2000/30 suggests that Customs is of the view that the categories of parties who could be liable for duty, GST and penalties have been expanded. This means that Customs could require importers using DDP and DDU transactions to pay duty short-paid, duty erroneously refunded and penalties on past importations. It is therefore possible that Customs will target past DDP and DDU importers in respect of transactions where adequate duty was not paid. In addition, the revocation of ACN 2000/30 raises GST issues. Customs stated that ACN 2000/30 should be revoked as it pre-dates the developments in, amongst other things, the 2010 Incoterms review.