Do you know all about imported ocean freight transportation and its associated costs?

 

 

According to Article 5 of the Measures of the Customs of the People's Republic of China for Determining the Duty-Paid Prices of Imported and Exported Goods (Decree No. 213 of the General Administration of Customs), the duty-paid price of imported goods shall be determined by the Customs on the basis of the transaction price of the goods and shall include the transportation and its related costs and insurance premiums prior to the arrival of the goods at the place of importation and unloading in the People's Republic of China. Transportation and its related costs shall be included in the duty-paid price of imported goods under the following three conditions: they are related to transportation; they shall be calculated until the arrival of the goods at the place of importation in the People's Republic of China; and they shall be paid by the buyer.

 

 

It shall be deemed to be transportation-related if one of the following circumstances is met:

1. basic freight charges for imported goods;

2. transportation surcharges for imported goods;

3. port charges such as pilotage, tugboat charges, unhooking charges, etc.;

4. warehousing costs incurred in the course of transportation; and

5. other costs incurred in the course of transportation.

 

 

Place of entry into the territory means the place where the imported goods first leave the means of international navigation after the means of international navigation on which the imported goods are carried has entered the customs territory of the country.

 

Before loading and unloading refers to the goods before the start of the act of loading and unloading. "Before unloading" is an important point to distinguish between the costs that need to be declared or not. Costs incurred after loading and unloading do not need to be declared.

 

 

Transportation and related costs of imported goods shall be calculated on the basis of the costs actually paid and payable by the buyer. If they have already been included in the price paid or payable for the imported goods before loading or unloading, they shall not be counted repeatedly in the duty-paid price.

 

 

 

① Basic freight constitutes the major part of the full freight chargeable and is included in the duty-paid price of the imported goods.

② Transportation surcharges, such as common fuel surcharges, emergency fuel surcharges, low-sulfur fuel surcharges, currency depreciation charges, terminal handling charges incurred at the port of origin or at the port of transshipment, etc., as part of the freight charges and occurring before loading or unloading at the place of importation, are included in the duty-paid price of the imported goods.

③  Other common surcharges. Surcharges derived from the characteristics of goods, such as overweight, overlength, and oversize surcharges; surcharges derived from transportation and port reasons, such as direct voyage surcharges, transshipment surcharges, port surcharges, etc.; temporary surcharges, such as port congestion surcharges, bypassing surcharges, selecting port surcharges, change of unloading port surcharges, peak season surcharges, etc.; surcharges derived from other reasons, such as container imbalance surcharges, security surcharges, inland fuel surcharges, etc. surcharge, security surcharge, inland fuel surcharge, etc. The above-listed charges are related to the transportation process and are included in the duty-paid price of the imported goods if they are incurred before loading and unloading at the place of importation.

 

 

① Demurrage refers to the agreed payment to be made by the charterer to the shipowner for the failure to unload all cargoes within the stipulated period of time, resulting in the ship continuing to berth in the harbor, which causes the shipowner to increase the expenditure of expenses in the harbor and suffer the loss of the ship's time.

 

If demurrage occurs before the unloading of the goods, i.e., if demurrage has been generated when the actual unloading of the goods has begun, in the case that the enterprise applies in writing and provides relevant documents, and there are objective and quantitative data to accurately differentiate between demurrage generated before and after the unloading of the goods, only demurrage generated before the unloading of the goods is included in the Duty-Paid Price (DPP) of the imported goods, or else all of it is included in the DPP of the imported goods; demurrage occurs after the unloading of the goods, i.e., when the actual unloading of the goods has begun. If the demurrage has not been generated when the actual unloading of the goods begins, it will not be included in the duty-paid price of the imported goods.

② Dispatch Money (Dispatch Money) refers to the unloading of goods completed in advance of the specified time, shortening the ship's life cycle and requiring the shipowner to return to the charterer the agreed amount.

 

Dispatch money occurs in the export of goods loaded and returned by the shipowner to the buyer; the cost of imported goods can be deducted from the duty-paid price. If the quick-repatriation charge is incurred after the goods have been loaded or unloaded at the place of import, the charge shall not be deducted from the duty-paid price of the imported goods.

 

 

The short stay during transportation due to route arrangement or waiting for the export loading period in the exporting country is regarded as related to the transportation process and is included in the duty-paid price of the imported goods as transportation-related expenses.

 

After the buyer purchases the goods and before transporting them to China, the buyer carries out warehousing in the place of export for the consideration of business arrangements, and the warehousing cost is regarded as unrelated to the transportation process, which does not belong to the "transportation and its related costs" and is not included in the duty-paid price of the imported goods.

 

 

Deduction for delayed shipment refers to the situation in commodities trading where the buyer and seller have clearly stipulated in the shipping schedule clause or penalty clause of the contract the "delayed shipment" and the matters that will lead to the deduction of the payment for the goods, which is essentially liquidated damages and does not belong to the transportation-related expenses.

 

If there is a "delayed shipment" clause in the contract and the seller specifies the corresponding deduction in the invoice after the delayed shipment stipulated in the contract, the amount should be regarded as the penalty for the seller's delayed shipment, which is the compensation for the buyer for the seller's failure to ship the goods in accordance with the time agreed in the contract. The "deduction for delayed shipment" could not be a deduction from the transaction price and should not be deducted from the duty-paid price of the imported goods.

 

 

 

 

If the CIF price includes all taxable freight charges, the "Freight" column need not be filled in. If the CIF price does not include all the taxable "transportation-related expenses," such as fuel surcharge, low-sulfur fuel surcharge, currency devaluation surcharge, port of departure terminal handling charges, cargo demurrage, and other surcharges or miscellaneous charges paid by the buyer, it should be reported in the "Miscellaneous Charges" column in the customs declaration. should be reported in the "Miscellaneous Charges" column of the customs declaration.

 

 

If the CFR/CPT price includes all taxable freight charges, the "Freight" column is not required. If the CFR/CPT price does not include all taxable "transportation-related expenses," it should be reported in the "Miscellaneous Expenses" column of the customs declaration.

 

 

Since the FOB/FCA/FAS price does not include freight charges, it is necessary to fill in the "Freight" column of the Customs Declaration with "Transportation Costs of Imported Goods Before Arrival at the Place of Importation and Unloading in China" and fill in the "Miscellaneous Charges" column of the Customs Declaration with the taxable "Transportation-Related Costs," which are not included in the freight charges.

 

 

Since the EXW price does not include freight charges, it should be reported in the "Freight Charges" column of the Customs Declaration as "the total sum of freight charges before the goods arrive at the place of importation and unloading in China from the place of delivery in the exporter's territory," and the taxable "Transportation-Related Expenses" that are not included in the freight charges should be reported in the "Miscellaneous Expenses" column of the Customs Declaration.