Every shipment. Every single one. For months, possibly years, an Australian importer had been paying 5% import duty on goods arriving from China that should have attracted zero duty.
They did not know. Their freight forwarder had not told them. And the Chinese supplier had simply never provided the one document that would have made all of the difference.
When they finally called Platinum® Freight Management, Peter McRae did not just fix the problem going forward. He helped them get the money back.
The Discovery
The Shipments That Were Costing More Than They Should
The importer had been bringing goods in from China on a regular basis through another freight forwarder. The shipments were moving. Clearances were happening. Duty was being paid. From the outside, everything appeared to be working.
What was not working was the duty rate being applied. Australia’s free trade agreement with China, the China-Australia Free Trade Agreement (CHAFTA), came into force in December 2015. Under CHAFTA, thousands of categories of goods imported from China are subject to reduced or zero duty, provided the importer can demonstrate that the goods originated in China and are properly documented.
That documentation is a Certificate of Origin, sometimes called a Free Trade Certificate. Without it, the Australian Border Force applies the standard Most Favoured Nation (MFN) duty rate instead. For this importer’s goods, the difference was 5%.
On every shipment. Every time.
5% duty was being paid on every shipment that should have attracted zero.
“The Chinese supplier was not providing the free trade certificate. So the importer was paying 5% duty on every shipment. When they asked us how to get that money back, we told them: you need to get the certificates issued retrospectively. And then we went and got the refunds.”
— Peter McRae | Licensed Customs Broker, Platinum® Freight Management
What CHAFTA Actually Means for Importers
The Free Trade Agreement Most Australian Importers Are Not Using Properly
The China-Australia Free Trade Agreement is one of Australia’s most significant bilateral trade agreements. For Australian businesses importing goods from China, it progressively eliminated tariffs across a broad range of categories following its 2015 commencement.
For many product categories, the duty rate under CHAFTA is now zero. The benefit is real and significant, but it is not automatic.
To claim the preferential CHAFTA rate, the importer must provide a Certificate of Origin issued by an authorised Chinese body at the time of export. In China, this is typically issued by the China Council for the Promotion of International Trade (CCPIT) or by Chinese customs authorities. The certificate confirms that the goods meet the rules of origin requirements under the agreement and are therefore eligible for the preferential rate.
If the certificate is not provided, the Australian Border Force cannot apply the preferential rate. The standard rate applies instead. This is not a grey area, and it is not a matter of discretion. No certificate, no concession.
The importer in this case had never been told any of this by their previous freight forwarder. Duty had been paid at the standard rate on every shipment for as long as they had been importing.
The Retrospective Claim
Getting the Money Back: How Retrospective Certificates Work
This is the part of the story that most importers find surprising, because most assume that once duty has been paid, it is gone.
It is not always gone.
Under Australian customs law, an importer who has paid duty at a rate higher than the correct preferential rate may be eligible to lodge an amendment to their import declarations and claim a refund of the overpaid duty, provided they can produce the required documentation.
For CHAFTA claims, this means obtaining Certificates of Origin retrospectively from the Chinese supplier for each prior shipment. A Chinese supplier can, in most cases, approach the relevant issuing authority to obtain back-dated certificates for shipments that have already taken place, provided the goods genuinely met the rules of origin requirements at the time of export.
Platinum® worked with this importer to do exactly that. The supplier was contacted. Retrospective certificates were obtained for the previous shipments. The amended declarations were lodged. The refunds were processed.
“There would have been lost money had they not come to us. They were able to get back the 5% duty. And going forward, they then made sure that every single shipment had the China-Australia free trade certificate accompany it.”
— Peter McRae | Licensed Customs Broker, Platinum® Freight Management
The importer recovered the overpaid duty and, critically, put a process in place that meant the same mistake would never happen again.
Time Limits
There Is a Clock Running on Your Refund Entitlement
Retrospective duty refund claims are not available indefinitely. Under the Customs Act 1901, time limits apply to amendment applications and duty refund claims. Once those limits have passed, the entitlement is extinguished regardless of how much duty was overpaid.
This means that every month an importer continues to pay the incorrect duty rate without taking steps to identify and recover the overpayment is a month of potential refund entitlement that may be lost permanently.
If you are importing goods from China and you are not certain that a valid Certificate of Origin accompanies every shipment, the time to investigate is now.
Why This Happens
The Difference Between a Freight Forwarder and a Customs Broker
The gap that allowed this importer to overpay duty for so long is not unusual. It reflects a fundamental difference between what a freight forwarder does and what a licensed customs broker does.
A freight forwarder organises the movement of goods: booking cargo space, coordinating logistics, and managing transport documentation. Many freight forwarders also offer customs clearance as part of their services, and many do a competent job at a basic level.
But identifying whether an importer is entitled to a preferential duty rate under a bilateral trade agreement, knowing which certificate is required to claim that rate, and knowing how to recover overpaid duty retrospectively: these are customs brokering skills. They come from training, from experience, and from holding a licence that requires ongoing professional development to maintain.
Peter has held his customs broker licence since 1998 and holds a Master of International Customs Law. His team does not just process shipments. They look at every clearance through the lens of whether the importer is paying the correct amount of duty and not a cent more.
“It is lost money. They were paying import duty that they simply did not owe. All it took was the right certificate, and we were able to get it back for them.”
— Peter McRae | Licensed Customs Broker, Platinum® Freight Management
What to Do Now
Is Your Business Overpaying Import Duty Right Now?
If your business imports goods from China on a regular basis, here are the questions worth asking today:
Speak with Platinum® Freight Management
Platinum® Freight Management reviews import duty positions as a standard part of their client onboarding process. If you are importing goods from China and want to confirm you are not paying more duty than you owe, call Peter McRae’s team today.
Call 1300 882 877Every shipment has a number. Every person has a name. Platinum® knows the difference.
Platinum® Freight Management is a licensed customs brokerage operating Australia-wide since 2000. Peter McRae holds a Master of International Customs Law and a Master of International Revenue Administration (University of Canberra) and has been a licensed customs broker since 1998. Member: IFCBAA and Freight & Trade Alliance. ABN 58 095 228 934. This article is general in nature. For advice specific to your import situation, speak with a licensed customs broker.