Someone please explain Customs' GST to me

[FROSTY]

Hey folks I've been trying to figure this one out and its just plumb doing my head in.
When Importing "stuff" from overseas our wonderfull customs service Fixes the exchange rate for 2 weeks when they calculate their GST take.
So rather than paying GST on (for example) 150000yen at the real exchange rate you PAY at say 62.5 = $2400 + Gst is $360 AT TIME OF PAYMENT Their take is calculated and fixed at a rate they decide -and they change whenever they decide. so they may decide to fix at 60
150000 at 60 =$2500 meaning $375 GST Yea the difference is "only " $15.00 but tell that to the accountants.

I'm sure theres people here who really actually know this stuff --If someone could explain it to me it would be great

[White trash]

Hey folks I've been trying to figure this one out and its just plumb doing my head in.
When Importing "stuff" from overseas our wonderfull customs service Fixes the exchange rate for 2 weeks when they calculate their GST take.
So rather than paying GST on (for example) 150000yen at the real exchange rate you PAY at say 62.5 = $2400 + Gst is $360 AT TIME OF PAYMENT Their take is calculated and fixed at a rate they decide -and they change whenever they decide. so they may decide to fix at 60
150000 at 60 =$2500 meaning $375 GST Yea the difference is "only " $15.00 but tell that to the accountants.

I'm sure theres people here who really actually know this stuff --If someone could explain it to me it would be great

Quite simply, the exchange rate against any overseas currency is constantly changing. So the rate charged @ 13:00 today will be different at 13:30 today. There's no sure way to calculate it identically.

Also, as the GST is charged on the CIF value of the goods, converted to NZD the 15% of that.

[FJRider]

You want answers on the workings of a (NZ) goverment department ... :killingme

[Scuba_Steve]

You want answers on the workings of a (NZ) goverment department ... :killingme

Well at-least their end goal is easy to explain -> :buggerd:

[steve_t]

You want answers on the workings of a (NZ) goverment department ... :killingme

Would it be that hard for them to use a daily exchange rate? Isn't it all computerised?

[imdying]

Think about it very carefully, and consider what Jimmy has said, and there's your answer. Absolute accuracy and practicality are working against each other here :yes:

[Toaster]

Their take is calculated and fixed at a rate they decide -and they change whenever they decide. ...

If you want to know why, talk to the Communications team in at head office in Wellington.

As per the website, the rates (for both private and commercial use) are set for a 14 day period and is split into 2 - 7 day periods.

This would I expect give some certainty as to the rate on any given day within the coming period should one wish to plan ahead.

[White trash]

If you want to know why, talk to the Communications team in at head office in Wellington.

As per the website, the rates (for both private and commercial use) are set for a 14 day period and is split into 2 - 7 day periods.

This would I expect give some certainty as to the rate on any given day within the coming period should one wish to plan ahead.

Bling-Go <tenchars/>

[FROSTY]

Quite simply, the exchange rate against any overseas currency is constantly changing. So the rate charged @ 13:00 today will be different at 13:30 today. There's no sure way to calculate it identically.

Also, as the GST is charged on the CIF value of the goods, converted to NZD the 15% of that.
AHH EXACTLY--so why not just have the gst calculated at time of payment at the rate you pay at?

[imdying]

AHH EXACTLY--so why not just have the gst calculated at time of payment at the rate you pay at?What happens if the arse falls out of the economy during that week and you end up paying twice the amount you had planned for, making importing that item temporarily economical? Probably seems like an unlikely occurence to us, but I bet the people bringing millions of dollars of whatever might think differently? I reckon Toaster's point about fore planning is probably on the money too.

[BMWST?]

What happens if the arse falls out of the economy during that week and you end up paying twice the amount you had planned for, making importing that item temporarily economical? Probably seems like an unlikely occurence to us, but I bet the people bringing millions of dollars of whatever might think differently? I reckon Toaster's point about fore planning is probably on the money too.

customs are a law unto themselves,they have more power than the police in some regards.Dont try to understand why,just understand what YOU need to do.I think its just to give a certain ammount of certainty as to the payment of next weeks customs charges for importers.If it floated with the exchange rate it would change from wednesday to thursday,depending on what happened to the currency market overnight.

[imdying]

customs are a law unto themselves,they have more power than the police in some regards. Dont try to understand why,just understand what YOU need to do.Solid advice. Apply it to the IRD too.

[FJRider]

Well at-least their end goal is easy to explain -> :buggerd:

Too often it's an "own-goal" ... :doh:

[FROSTY]

What happens if the arse falls out of the economy during that week and you end up paying twice the amount you had planned for, making importing that item temporarily economical? Probably seems like an unlikely occurence to us, but I bet the people bringing millions of dollars of whatever might think differently? I reckon Toaster's point about fore planning is probably on the money too.
Dude Im not talking about the PURCHASE price beng at a fixed rate. That always floats unless you forward purchase currancy. I'm talking about the customs GST figure.
so I could score a really good foreighn echange but still get hammered by customs gst--its just strange

[rwh]

I guess if you buy through a gst-registered importer this whole thing goes away - because when they on sell it, they presumably claim back the gst they paid (whatever it was; it's now irrelevant), and charge you based on what they're selliing it for.

Richard

[FROSTY]

I guess if you buy through a gst-registered importer this whole thing goes away - because when they on sell it, they presumably claim back the gst they paid (whatever it was; it's now irrelevant), and charge you based on what they're selliing it for.

Richard
LMAO-the issue though doesn't "go away" --it just goes away in kiwi style--Hey its someone elses problem. :devil2: SOMEONE still has to deal with it.

[imdying]

Dude Im not talking about the PURCHASE price beng at a fixed rate. That always floats unless you forward purchase currancy. I'm talking about the customs GST figure.
so I could score a really good foreighn echange but still get hammered by customs gst--its just strangeI know what you're talking about. The GST is a component of the cost of goods, and for bigger players that big money.

[Mully]

Just consider yourself lucky that cars aren't dutiable, Frosty.

[Naki Rat]

LMAO-the issue though doesn't "go away" --it just goes away in kiwi style--Hey its someone elses problem. :devil2: SOMEONE still has to deal with it.
The only problem for the importer is that the import duty (if applicable) is based on the greater amount and is not refundable at the next GST balance date, like GST is.

We have this situation as we pay for our import shipments by PayPal so payment is immediate and the forex rate is set in stone at that time - done deal. With the volatility of the US$ in particular this makes for some inaccuracies in the rate that IRD uses but there's not a lot that can be done about it so just suck it up, though admittedly on the goods we import the import duty rates are only 10% at most.