Customs By-law No. 0540004

Administered by Attorney-General's Department

Legislation au F2005L03057 ByLaws Not in force Legislative Instrument

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EXPLANATORY STATEMENT

By-law No. 0540004

Customs Act 1901

Background

Section 271 of the Customs Act 1901 (the Act) provides, in part, that where an item of a Customs Tariff is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law, the Chief Executive Officer of Customs may make by-laws for the purposes of that item. A Customs Tariff is defined in section 4 of the Act to mean an Act imposing duties of customs, that is the Customs Tariff Act 1995 (the Customs Tariff Act)..

Item 32B of Schedule 4 to the Customs Tariff Act provides that the following goods are dutiable at the rate of ‘Free’:

Goods, as prescribed by by-law, which, in the opinion of the Chief Executive Officer, the amount of duty that, but for this item, would be payable and the value are insubstantial

By-law No. 0040020 previously prescribed for the purposes of item 32A:

a) goods imported by post, the total value of which does not exceed $1,000; and

b) goods imported otherwise than by post the total value of which does not exceed $250;

and in respect of which the combined duty and GST payable does not exceed $50.

By-law No 0040020 has been revoked and replaced with By-law No. 0540004.

The new by-law prescribes for the purposes of item 32B goods imported into Australia, the customs value of which does not exceed $1,000. The new by-law aligns the threshold value of goods imported otherwise than by post, that is by sea and air, with the threshold value of goods imported by post. This means that all goods imported into Australia that have a value not exceeding $1,000 will be duty free. Under section 42-5 of the A New Tax System (Goods and Services Tax) Act 1999, such goods will also be GST free. However, this by-law does not apply to:

a) tobacco, tobacco products or alcoholic beverages;

b) goods imported by a passenger or a member of the crew of a ship or aircraft arriving in Australia from a place outside Australia; or

c) goods forming part of a bulk order.

The new revenue collection threshold is also aligned with the new value threshold that determines whether imported goods must be the subject of a formal entry, which was amended by Customs Regulations Amendment 2005 (No. 6).

In regard to the new formal import entry threshold for the new Integrated Cargo System (ICS), the Government indicated its preference for a system that reduced, as much as possible, the ‘red tape’ associated with the importation of low value goods. The Government also made it clear that when consideration was given to the associated revenue collection threshold, it too should strike an appropriate balance between revenue collection, risk management and administrative efficiency.

The new threshold value applies to the goods that:

a) are on board a ship or aircraft that is due to arrive at its first port in Australia from a place outside Australia at or after the import cut-over time; or

b) were on board a ship or aircraft that has arrived at its first port in Australia from a place outside Australia if the ship or aircraft was due to arrive at that port or airport at or after the import cut-over time; or

c) are or were on board a ship or aircraft that arrives at its first port or airport in Australia from a place outside Australia at or after the turn-off time.

“Import cut-over time” and “turn-off time” have the same meaning as in section 5 of the Customs Legislation Amendment (Application of International Trade Modernisation and Other Measures) Act 2004.

The new by-law will continue to apply the previous threshold values to goods that:

a) are on board a ship or aircraft that is due to arrive at its first port in Australia from a place outside Australia before the import cut-over time; or

b) were on board a ship or aircraft that has arrived at its first port in Australia from a place outside Australia if the ship or aircraft was due to arrive at that port or airport before the import cut-over time, unless the ship or aircraft arrives at or after turn-off time.

Instrument

By-law no. 0540004 prescribes goods for the purposes of item 32B of Schedule 4 to the Customs Tariff Act and revokes By-law No. 0040020.

Consultation

Any change to the revenue threshold affects importers and their agents, the industry sector managing the importation of goods into Australia (express couriers, freight forwarders, customs brokers, the Australian Postal Corporation). Customs has been in detailed consultation about the threshold with stakeholders since early 2004.

The Customs National Consultative Committee, comprising representatives of major industry stakeholders, meets quarterly to discuss Customs legislative and administrative issues, and has received regular updates on threshold developments.

The requirement for a revenue threshold is integral to the import module of the Integrated Cargo System (ICS). As part of the rollout of the ICS, the Minister for Justice and Customs has held a quarterly roundtable meeting with industry representatives. Discussion of the revenue threshold was an agenda item at these meetings, and industry was kept informed of the requirement for the Government to consider the administrative and revenue implications of a changed threshold.

Customs (along with the Australian Quarantine and Inspection Service) meets quarterly with the Australia Postal Corporation as part of a tripartite agreement. Customs has had ongoing discussions among this group about business process matters, including workload implications under a changed revenue threshold.

Once a preferred position was arrived at for the revenue threshold the Commonwealth Government consulted with the State and Territory Governments about the impact on Goods and Services Tax revenue.

Aligning the revenue collection threshold directly with the new formal entry import threshold promotes a significant reduction in ‘red tape’ for a large number of importers and other stakeholders involved in the importation of goods. It treats all modes of transport into Australia in the same manner and results in a transparent method of calculating customs duty and GST.

Commencement

By-law No. 0540004 commences on 8 October 2005.

Overview

The Customs Act 1901 was enacted to provide for the regulation of customs and excise, including the imposition of duties on imported goods, and the administration of the Customs Tariff. In response to the need for streamlined customs processes and a balanced approach to revenue collection, risk management, and administrative efficiency, By-law No. 0540004 was introduced by the Australian Government. This by-law was made under the authority of section 271 of the Customs Act 1901 and aims to align the revenue collection threshold with the new formal entry import threshold for low-value goods, effectively reducing bureaucratic hurdles for importers while ensuring efficient revenue management. By-law No. 0540004, which revokes By-law No. 0040020, sets a uniform threshold of $1,000 for duty-free imports, irrespective of the mode of transport, and excludes certain goods such as tobacco, tobacco products, alcoholic beverages, and bulk orders from this provision. The by-law reflects extensive consultations with industry stakeholders and state and territory governments, ensuring a balanced approach to the regulatory changes.

Scope and Application

By-law No. 0540004 under the Customs Act 1901 applies to goods imported into Australia that have a customs value not exceeding $1,000, aligning the duty-free threshold for goods imported by post with those imported by other means such as sea and air. This change ensures that all low-value imported goods, regardless of the mode of transport, qualify for duty-free status as long as the customs value does not exceed $1,000. However, this by-law excludes tobacco, tobacco products, alcoholic beverages, and goods imported by passengers or crew members, as well as goods that form part of a bulk order. The by-law also synchronises the threshold value for the formal entry of goods with the new revenue collection threshold, aiming to reduce administrative burdens while balancing revenue collection and risk management. The new threshold applies to goods arriving at their first Australian port or airport after the specified import cut-over and turn-off times, as defined in the Customs Legislation Amendment Act 2004.

Key Provisions

By-law No. 0540004, under the Customs Act 1901, primarily modifies the conditions under which goods are considered dutiable. Section 271 of the Act allows the Chief Executive Officer of Customs to make by-laws for items in the Customs Tariff. Specifically, By-law No. 0540004 aligns the threshold for duty-free goods to a uniform value of $1,000, regardless of whether they are imported by post or any other means. This by-law replaces By-law No. 0040020, which had different thresholds for goods imported by post ($1,000) and by other means ($250). The new by-law ensures that all goods with a customs value of $1,000 or less are duty-free, provided they do not fall under specific exclusions. The by-law imposes certain obligations on importers and other stakeholders involved in the importation process. Importers must ensure that the goods they are importing comply with the new threshold, which applies to goods on board a ship or aircraft arriving in Australia from outside the country at or after the specified import cut-over time. The by-law also mandates that certain goods, such as tobacco, tobacco products, alcoholic beverages, and goods forming part of a bulk order, remain subject to duty and GST regardless of their value. Additionally, the by-law aligns the threshold for formal import entries with the new revenue collection threshold, as stipulated in the Customs Regulations Amendment 2005 (No. 6). This alignment aims to reduce administrative burdens and streamline the importation process for low-value goods. Breaching the provisions of By-law No. 0540004 can result in various consequences. If an importer fails to declare goods correctly or misclassifies them to avoid duty, they may face penalties. The Customs Act 1901 and associated regulations provide for both civil and criminal penalties. Civil penalties can include fines up to a maximum of $22,200 for individuals and $111,000 for bodies corporate, depending on the severity and intent of the breach. Criminal penalties may also apply, with potential fines and imprisonment for more serious offences. The Act ensures that those who deliberately evade duties or provide false information to Customs officers are held accountable, thereby maintaining the integrity of the customs system.

Area of Law: Customs Law; International Trade Law
Instrument: By-law / Ordinance
Concepts: Definitions & Interpretation; Regulatory Standards; Compliance Obligations

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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