Question 1 (5 marks)

• Identify the custom classification code for each listed product in Table 1.

https://www.abf.gov.au/importing-exporting-and-manufacturing/tariff-classification/current-tariff

• Calculate amount of duty payable on entering the product for home (local)
  • Provide hard copy of foreign exchange rate used for calculations
• Calculate the VoTI (Refer to 110-115 of the prescribe textbook)
• Calculate the total cost of product at the end of the customs clearance Please note:

Freight costs are for sea transport from the country of origin to Melbourne Victoria Australia In calculating the costs, you will have to convert these to AUD.

Cost of goods given as an equivalent FOB value for customs purposes.

Question 2 (5 marks)

Complete Import Declaration (N10) form for the product you have calculated as the cheaper one in total cost. There is no option in deferring GST.

Table 1: Product and origin information

Question 3 (5 marks)

XYZ Pty Ltd has decided that it will be exporting to China. You have heard about the benefits of preferential duty treatment for Australian goods under the China Australia Free Trade Agreement (ChAFTA).

The products you will export are (prices shown on an EXW Incoterms 2020 basis):

1. Australian Code AULM.
   • 40 kgs per box
   • Price USD 14.00 per kg
   • Total quantity of lamb: 600 kgs

1. Australian Code AWWT.
   • Twelve bottles per box
   • Price USD 14 per bottle
   • Total quantity of wine: 600 bottles

Table 2 Product sizes and measurements

• Decide whether you will enter into a forward exchange contract or not. On Tuesday in Week 1 you are to obtain the following information:
  • The spot rate for the United States Dollar - USD (Provide evidence of source of exchange rate)

The value of the contract is as per the product you are selling above (details as in Table 2).

Calculate The amount receivable when converted to AUD using the spot rate obtained on

Wednesday in Week 1

Briefly anticipate the amount receivable in Week 2 even if you have incomplete and imperfect information about the future spot rate on Tuesday in Week 2.

• On Tuesday in Week 2 you are required to:

• Obtain the current spot rate (must be from the same source as of Week 1). Calculate: The amount receivable in AUD using the spot rate obtained on Monday in

Week 2 from the same source as of Week 1. (Provide evidence of source of exchange rate)

Table 3 Comparison of amount receivable in Week 1 and Week 2

Analyse the effect of the exchange rates movement on the amount receivable in AUD; and the benefit and cost of forward contract as an exchange risk management tool.

Question 4 (5 marks)

Use OZDOCS to complete this assignment.

Complete the necessary documentation to clear Customs and enable the importer to complete border clearance processes in Thailand for products in Table 2, Question 3. You must complete a Certificate of Origin (from the exporter’s point of view) for the above products. Decide whether to use air or sea transport, based on the information provided below.

Seller: XYZ Pty Ltd, 1002 Gumbeach Avenue, Portside, Vic 3999 Australia; Tel: +61 3 94135432

Buyer: TCE Imports. 156 Portbank Road, Bang Bon, Bangkok, 10150, Thailand; Tel: +66 0 26013826

Terms of Delivery: CIP Bangkok, uncleared for import, all charges outside for buyer’s account, Incoterms 2020

Method of payment: Letter of Credit

Transport details:

1. Sea transport: Vista Voyage 706,

Departing Melbourne 7April 2020, destination Port of Laem Chabang, Thailand Latest receival date: 1 April 2020

Bill of Lading Number: BS2614

Transit time to Port of Laem Chabang: 18 days Costs:

• Seafreight: AUD 00;
• Carriage to wharf: AUD 00;
• Documentation: AUD 00

1. Air Transport: Flight TG466 Melbourne- Bangkok, 7 April 2020, AWB: 076 – 26067621

Costs:

• Airfreight: AUD 00;
• Carriage to airport: AUD 00;
• Documentation: AUD 00

Insurance charges (regardless of mode of transport chosen). Premium = (CPT invoice value X 110%) X 0.3%