Trade and goods compliance

Valuation of imported goods

Inclusion of production assist costs

Production assist costs, defined in section 154 of the Customs Act 1901 (the Act), are the costs incurred when an importer provides directly or indirectly goods, materials and certain services, either free of charge or at a reduced cost to use in the production of the imported goods. These costs must be included in the customs value upon import.

Examples of production assist costs include production materials, dyes, moulds and tools used during the manufacture of the imported goods.

Customs value and quantity

The information used to determine the customs value of imported goods must correctly reflect the price paid or payable for the goods to ensure the customs value declared is correct. The customs value provisions are contained in sections 154 to 161L of the Act.

Quantities must be reported in accordance with the unit required by the good's tariff classification. For example, for some goods it might be by square metre, by weight or by the number of goods. In some instances, it is not a requirement to declare the quantity.

As an example, the quantity unit directed by tariff classification 6106.10.00 for women's cotton blouses is 'number'. If the commercial invoice for a shipment of women's cotton blouses stipulates the quantity as a value in kilograms and this quantity is declared, the unit price per blouse will be incorrect. The units must be converted to 'number' and that quantity must be declared.

It is important that the correct quantity and unit is declared. When we analyse importations for risk, if an incorrect quantity or unit is declared, the unit value per item will be inaccurate. It will indicate a possible issue where none might exist and action might be initiated.