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Customs contradicts vendors over IT pricing

Joins Treasury in endorsing 'grey market'

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The Australian Information Industry Association’s claim that customs duty contributes to high IT prices in this country has been flatly contradicted by the Australian Customs Service.

Customs, whose submission to the IT price inquiry being conducted by the Australian parliament at the urging of MP Ed Husic has been published here (submission number 88), states that duty does not apply to IT products.

As a signatory to the WTO’s Information Technology Agreement, Customs says, Australia agreed to eliminate tariffs on computers and peripherals, electronic components, software, and telecommunications kit – such duties were eliminated in 1998.

Someone should mention this to the AIIA, which claimed that the “costs associated with product and service sales in this market” include “GST, customs duty and regulatory requirements”.

Customs also noted that there is “no customs duty on goods such as game consoles, iPads and e-readers. Similarly there is no duty on CDs, DVDs and the like.” GST does apply, of course, on imports over $1,000, and each consignment is subject to a $AU50 processing charge.

Customs also emphasized the legality of parallel importation. Rather than the “grey market” label it so often gets, Customs notes that “the parallel importation of genuine trade marked goods is permitted as a way of encouraging the free movement of goods, enhancing competition and providing lower prices for consumers”.

Treasury backs 'grey market'

Customs isn’t the only department to state that parallel importation is good for consumers. The Treasury (submission 85) makes similar comments, stating that “consumers take advantage of parallel imports to avoid high prices” for physical goods, and are likely to “seek ways to reduce the impact of international price discrimination for digital products as well”.

Even the impact of GST isn’t black-and-white, Treasury states: downloads from overseas suppliers “are generally not subject to GST or customs duty” because of the “difficulty of enforcing compliance by non-resident suppliers who do not have a presence in Australia”.

In spite of a stance which might be regarded as more sympathetic to the IT industry than most of the submissions to the inquiry so far, even Treasury notes that “higher prices that cannot be explained by differences in the cost of supplying to Australia are not optimal for Australian consumers or businesses.”

The Register notes that the inquiry doesn’t seem to have heard from the Department of Foreign Affairs and Trade, which is responsible for our Trans-Pacific Partnership negotiations – and is therefore accused by Greens Senator Scott Ludlam of trying to trade away some of the parallel import rights that are so benignly endorsed by Customs and Treasury. ®

Bootnote: While browsing the submission by the Australian Home Entertainment Distributors Association, El Reg came across this gem: “90 percent of P2P piracy in Australia is infringing”. I just thought I’d share that with you.

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