Duty-Free: Cheap Products or Consumer Rip-Off?
Ever wonder if purchasing duty-free is actually worth it? Read below to find out.
Have you ever excitedly purchased the massively discounted products at an airport’s duty-free shop, only to discard them or pay a hefty fee at the security check-point? The duty-free industry is a lucrative business, full of complex legislation and tourist traps. Here are a few key items to be aware of:
When purchasing duty-free powder, liquid, aerosol and gel items (LAG’s) from an Australian Airport duty-free shop, the Department of Home Affairs recommends that you pack these items in the checked-in luggage. LAG’s purchased in Australia and carried in cabin bags are subject to both Australian , and the transit country’s Customs regulations.
For example, when travelling from Sydney to London via Hong Kong, the duty-free LAG’s in your cabin bag can be inspected twice- at Sydney, as well as Hong Kong. Additionally, if you do not fulfill the Customs requirements in Hong Kong, or do not have a valid permit to carry LAG’s into Hong Kong, security officials have the right to confiscate them for destruction.
It is thus crucial to read the LAG policy of your transit country before purchasing items at an Australian duty-free shop. Be sure to confirm if the invoice and permit attached with the goods meet the Customs requirements of both your destination and transit countries. Alternatively, it might be a better idea to purchase the duty-free LAGs at your destination airport as all proprietors in a duty-free shop need to comply with domestic regulations. These regulations are applicable to businesses that import goods as well.
When arriving in Australia, duty-free products should be purchased either at the last transit airport, or upon landing in Australia. You should not purchase an LAG at an Australian duty-free if you have a transit through:
- South America
- Hong Kong to USA (only)
- Bangkok to Manila & Taiwan with a connecting DOMESTIC flight (only).
- Hong Kong/Auckland with United Airlines
Tourist Refund Scheme (TRS)
When travelling abroad, the Australian Government’s Tourist Refund Scheme (TRS) can be a better pricing option than a duty-free shop, as it allows you to find the best retail price at a regular store and claim a further 10% GST refund on that. You can claim a GST refund at the TRS facility on the airport if you:
- Purchase items that you can wear or carry on the plane (excluding alcohol except wine)
- Spend $300 or more at a single store, within 60 days of your flight departure
- Bring the item and the tax receipt to the TRS facility at least 30 minutes before your flight departs
- The tax receipts for the goods is under your name
Consumers importing goods into Australia should also be wary of the GST they need to pay on those goods. While previously they only had to pay GST on goods costing more than $1000, the recent GST legislation requires them to pay a GST on goods costing $1000 or less too.
Duty-free can help you save a lot of money on items such as liquor and tobacco. You can bring up to 2.25 litres of alcoholic beverages, and 25 grams of an unopened tobacco product into Australia. However, due to a monopoly at the airports, they substantially mark-up the prices of items such as confectionery and perfumes. Be sure to do your research before buying these products.
Worried that you have been scammed by a duty-free shop? Contact a consumer lawyer or a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest Legal Marketplace.
Avi is a legal intern at Lawpath. He is currently studying a Bachelor of Commerce (Finance) with a Bachelor of Laws at Macquarie University.