Beverage importers in Sydney ordered to pay $1.25M penalties for misclassifying imports

By @chelean on
A bottle of Korean soju.
A bottle of Korean soju. Creative Commons

Two beverage importers based in Sydney will be forced to pay more than $1.25 million in penalties and recorded duty and GST for mislabelling goods classification to avoid paying taxes. The companies came into the attention of the Australian Border Force (ABF) following an investigation into the undervaluation of imported beverages.

According to ABF’s Compliance Audits Unit investigation, which commenced in June, there have a number of imports of beverages fortified with Soju liquor over a four-year period. The first company had classified the goods as fermented beverages, which are duty-free. It should have declared them under a different classification that is subject to customs duty. It has been ordered to pay the outstanding duty and GST amounting to $721,311. It was also fined more than $19,000.

The second company had apparently been involved in a similar practice. It was ordered to pay outstanding duty and GST totalling $505,069, as well as fine of almost $11,000. Both companies have accepted the finding, promising to implement changes to their practice to ensure they pay the correct duty in the future.

“As Australia’s customs service, the ABF plays a leading role in trade enforcement to ensure the correct amount of duty and GST are paired on imported goods,” Claire Rees, ABF acting assistant commissioner for Port Operations Command, said. “Had these two cases not been identified, the Australian economy and ultimately Australian taxpayers would have missed out on more than a million dollars in revenue.

“ABF officers work diligently to ensure importers comply with reporting and revenue collection requirements to ensure a level playing field for business.”

Last week, the ABF have also arrested five men for illicit tobacco-importing in Sydney. They were believed to have attempted to import tobacco worth about $6.8 million in evaded tax.