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Thread: Australian import tax for pipe tobacco?

  1. #1
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    Question Australian import tax for pipe tobacco?

    Would someone please help me to understand Australian import tax on pipe tobacco? I've read the Customs website but the issue is no clearer.

    Example 4: An importation of low value tobacco products (for example, 200 sticks = 8 packets x 25 sticks valued at A$60)
    A$
    Customs value (Cval)
    60.00
    Customs duty (Duty)@ $0.33267 per stick
    66.53
    (Payable)
    International transport and insurance or postage (T&I)
    30.00
    Value of the Taxable Importation (VoTI)
    (Cval+Duty+T&I)
    156.53
    Goods and Services Tax (GST) @ 10% of the VoTI
    15.65
    (Payable)
    Total payable Duty + GST
    82.18

    Customs duty of $0.33267/stick is the rate applicable as of 2/8/2010*

    (Customs duty rates are subject to change. Please check the current published rates)

    (Other import processing charges may apply)
    Firstly, this implies that someone is importing cigarettes, not pipe tobacco so I have no idea how much tax would apply, if any (I know that's unlikely). Secondly, does this mean that we're expected to pay over 130% of the value just in tax? If so, that's pretty rough.

    I just thought I'd ask the question here and hopefully get an experienced answer, rather than emailing Customs and getting a reply from someone who either has no idea or treats me like a criminal just because I have a question about tobacco.
    Leigh ~ straights, single edges, double edges, boars, badgers, pipes ~ BOTOC

  2. #2
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    Johnmrson had to pay excise on some cigars a year or so ago, he may know?

  3. #3

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    I did indeed. Mine was charged on the weight of the tobacco products which in my case was cigars. Off the top of my head I paid $100+ on approx 40 cigars.

  4. #4
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    From what I understand, in Canada I would pay around 250% of the value in tax and duties. So $100 of baccy becomes approx $350. I'd say you're doing pretty well at 130%.

  5. #5
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    Default

    Note to self, don't move to Australia or Canada
    "Life's too short for pipes that gurgle"

  6. #6
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    Travel to Cuba!
    Cheers, Luc - My Gear(Wiki) - Have a question, PM a mod. That's why we're here!

  7. #7

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    Quote Originally Posted by Badger & Bengall View Post
    Would someone please help me to understand Australian import tax on pipe tobacco? I've read the Customs website but the issue is no clearer.
    That looks pretty clear for a customs valuation:

    First they assign an arbitrary a value of $20 a packet - I'm pretty sure you could dispute this if the sale value was lower*

    Then they apply the Tobacco Duty at another arbitrary value of 33c per cigarette. This is based on the duty per kg divided by an average weight of tobacco per stick.

    Now the fun starts: they add the frieght to the above to calculate a taxable value for the package (never mind the fact that it was paid outside the country, to a foreign national not subject to Australian law or that they are double dipping by charging GST on the duty). Which leaves you owing Customs $66.53 in duty plus $16.65 in GST or $83.18 total. They are supposed to send you a demand for this amount, you pay it and they release the goods.

    You can dispute the valuation and give them permission to open the packaging and weigh the contents. I can see this being worthwhile in the case of cigars where customs will be working on an arbitrary weight per unit that may be much higher than the actual. Pipe tobacco makes everyone's life easy by having the net weight clearly printed on the tin.

    Sometime I really think they go out of their way to make this sort of info as hard to get and understand as they can.

    Quote Originally Posted by Badger & Bengall View Post
    Firstly, this implies that someone is importing cigarettes, not pipe tobacco so I have no idea how much tax would apply, if any (I know that's unlikely). Secondly, does this mean that we're expected to pay over 130% of the value just in tax? If so, that's pretty rough.
    Nope, they expect you to pay about $450 (last time I checked) per kg plus 10% GST in tax. Call it an even $500 per kg and you won't be far wrong. The duty is per weight, not value, basically to stop people getting a receipt with a lower value than they paid. All tobacco is treated the same regardless of form and all is subject to duty at the same rate. There is no gift allowance and no lower threshold on tobacco and alcohol.

    You think that's rough? You do realise you are paying that on every tobacco product bought over the counter here too? Only stores here add their margins based on the post duty value (nothing wrong with that in itself: I'd be bloody annoyed if the tax office was making more from my sales than I was) so I's generally still cheaper to buy overseas.

    Quote Originally Posted by Badger & Bengall View Post
    I just thought I'd ask the question here and hopefully get an experienced answer, rather than emailing Customs and getting a reply from someone who either has no idea or treats me like a criminal just because I have a question about tobacco.
    I've always found Customs very helpful and reasonable,

    Cpt Bluebear

    * But please don't - take it on the chin for reasons I'm happy to discuss in a PM or in The GSL but not a public forum that is indexed by Google. Feel free to PM me if you want to know about how it works in reality.
    Last edited by CptBlueBear; 04-07-2012 at 12:53 AM. Reason: Clarification

  8. #8
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    Thanks Cpt Bluebear, I really appreciate you taking the time to write such a detailed reply. You have really clarified the issue for me.

    I was considering buying four 50g tins so that should equate to approximately $100 in duty and GST. Ouch! I wish I didn't smoke my last two tins so quickly now.

    With this information, I can make an informed decision, and I think that'll be to hold off until I can bear the unreasonable cost of duty.

    This would also be a killer for the B&B's potential future tobacco PIFs for Australians.
    Leigh ~ straights, single edges, double edges, boars, badgers, pipes ~ BOTOC

  9. #9

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    Importing toobacco of any kind into Australia only makes sense if you can get it for a bargain price in the first place. The cigars I got came free with a nice second hand humidor I bought from the US so I was happy to pay the tax on them. The 40 cigars I got would have cost me around $800-$1200 retail here.

  10. #10
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    Good tip John, I'll keep my eye out for a bargain.

    This hobby just became more expensive!
    Leigh ~ straights, single edges, double edges, boars, badgers, pipes ~ BOTOC

  11. #11

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    Quote Originally Posted by johnmrson View Post
    Importing toobacco of any kind into Australia only makes sense if you can get it for a bargain price in the first place. The cigars I got came free with a nice second hand humidor I bought from the US so I was happy to pay the tax on them. The 40 cigars I got would have cost me around $800-$1200 retail here.
    Now you've got me curious - what did you get?

    Cigars are well worth doing because the local retailers seem to have followed the government's example and jacked their prices up in the wake of the tax hike. I buy Montecristos and Cohibas from OS and even paying the duty, the Montes are half the local price and Cohibas a quarter! Pipe tobacco prices seem a little more grounded in reality.
    Last edited by CptBlueBear; 04-07-2012 at 05:37 PM. Reason: grammar

  12. #12

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    I import all my pipe tobacco and have not been charged by customs yet. I only ever order 2 or 3 tins at a time though, and never bulk. One of the packages was opened by customs for inspection but they let it pass. So they should, not like I am going to sell them they are for personal use.

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