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What is the duty on…

“What is the duty rate on (insert item here)” is the most common question we get asked, right after “Hi, how are you?” The duty rate can affect the cost of the goods you import and helps determine if it makes sense financially to import the goods.

Fortunately Orbit Brokers is here for you! Our experienced staff are ready to help. Determining the rate of duty involves a number of factors including;

  • What is the item?
  • What is the material of the item?
  • Where is the item produced?
  • Where is the item coming from?

So what exactly is duty?

Duty is a tariff that is paid on imported goods. The Department of Finance Canada determines the various rates of duty. Duty can be based on the quantity or weight, but in the majority of cases, it is ad valorem or based as a percentage of the value of the goods.

The easiest way to determine a duty rate is if the manufacturer provides a Harmonized Item Description and Coding system code (HS code).The HS code is an international standard maintained by the World Customs Organization (WCO). Over 200 countries use the system as a basis for their Customs tariff. An HS code is a 10 digit number that identifies a product for duty rate and statistic keeping purposes. The manufacturer would have all the knowledge of the composition and production process to correctly determine the HS code for an item. However, manufacturers focus on manufacturing more than HS codes. Don’t worry – we at Orbit Brokers can help you find out the HS code for your commodity.

How do we help?

An importer contacted us today and wanted to know the duty rate on a table from Vietnam. We needed to know the following;

  • What is the material of the table?
  • Is it for the home or for commercial use?
  • Is it manufactured in Vietnam?

Canada has a multitude of trade agreements with a variety of countries, so knowing where the goods are made and coming from is vital.  Each trade agreement determines duty rates on imports between 2 or more countries. A table coming from Vietnam has a different rate than the same item coming from Indonesia due to the different trade pacts. The importer was able to obtain a statement of origin from their vendor, so they would face 6% duty plus 5% GST on the cost of the table.

The Canadian Customs Tariff lists all trade agreements and corresponding rates of tax. Be careful, the info changes frequently. CSCB licensed brokers are committed to ongoing training and education and we stay up to date on all the changes. Contact Us today to make Orbit Brokers your customs clearance experts!

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