| Q.1 | How is duty on liquor assessed? |
| A.1 |
Duty on liquor is calculated according to the value of the goods. The value of the goods for assessment of duty will be the normal price which the goods would fetch, at the relevant time, on their sale in the open market between a buyer and seller independent of each other.
The 'relevant time' will be, for imported liquor, the time when such goods are removed from the seller's premises for export to a buyer in the Hong Kong Special Administrative Region (HKSAR), or, for locally manufactured liquor, the time when such goods are removed from the factory.
Therefore, the value for duty assessment would be the ex-warehouse price which should include all costs incidental to the sale of the goods borne by the seller such as packing cost, commission, royalty and licence fee but exclude the freight and insurance charges incurred in bringing them into HKSAR.
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| Q.2 | What are the documents required for duty assessment? |
| A.2 |
Upon Department's request, importers or manufacturers of dutiable goods are required to produce contracts of sale, invoices, books of account and any other documents like payment records, export market price lists issued by the suppliers and purchase orders, which are considered to be necessary for the purpose of assessing and calculating duties.
If the importers or manufacturers fail to submit the requested document, the Department may fix a value which shall be deemed to be the value of the goods for assessing duty by virtue of Section 26A (5) of the Dutiable Commodities Ordinance, Chapter 109, Laws of Hong Kong (the Ordinance).
In these circumstances, the importers or manufacturers can provide any documents that can substantiate its declared dutiable value is the 'normal price' stipulated in Section 26A (1) of the Ordinance for the Department's consideration.
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| Q.3 | Is there any penalty for false declaration? |
| A.3 |
Any person deliberately makes a false declaration by providing forged or falsified document may be liable to prosecution with maximum penalty for a fine of $1,000,000 and to imprisonment for 2 years.
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| Q.4 | What do the different kinds of codes appeared on a Dutiable Commodities permit represent? |
| A.4 |
'Supplier Code': code for a specific supplier of the goods. 'Carrier Code': code for a specific carrier, i.e. a specific flight, vessel, etc. 'Commodity Code': unique code for a specific dutiable commodity.
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| Q.5 | What will be the exchange rate if foreign currencies are involved in the duty assessment? |
| A.5 |
The Hong Kong dollars equivalent of the other currency is calculated at the opening indicative counter exchange selling rate published by the Hong Kong Association of Banks: -
- for a person permitted to make monthly returns, on the last date of that return; and
- in any other case, on the 15th day of the month immediately preceding the month in which the goods are imported.
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| Q.6 | Is there any other obligation for an importer or a manufacturer of Dutiable Commodities? |
| A.6 |
In pursuance of Regulation 22A of the Dutiable Commodities Regulations, Chapter 109A, Laws of Hong Kong, the importer or manufacturer of dutiable goods should keep contracts of sale, invoices, books of account or other documents for at least 2 years after their creation.
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| Q.7 | Are all the costs relating to the transportation of the imported dutiable goods deductible from dutiable value? |
| A.7 |
Only delivery cost incurred at the time when the imported dutiable goods are removed from the supplier's premises for the purpose of export to the buyer is deductible from the dutiable value. Supporting documents relating to the delivery costs would be required to be submitted for proof upon request.
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| Q.8 | I have been offered a 10% price discount by my supplier. Should the discount be reflected in the declared dutiable value? |
| A.8 |
Discounts given by suppliers under normal trade practices, such as cash discount and quantity discount, are acceptable deductions and can be excluded for duty assessment. When filling in permit application, you should input the amount of discount offered into the 'discount %' field and the total dutiable value before discount into the 'dutiable item cost' field.
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| Q.9 | My overseas supplier intends to offer me liquor sample that is free-of-charge (FOC). Is duty charged on the FOC item? |
| A.9 |
Unless an exemption from duty on the FOC liquor samples has been granted by the Department, you should obtain a normal market price of the goods from the supplier for the purpose of duty assessment on the sample. Otherwise, the Department would fix a value which shall be deemed to be the value of the goods for assessing duty by virtue of Section 26A (5) of the Dutiable Commodities Ordinance, Chapter 109, Laws of Hong Kong.
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| Q.10 | What should I do if my imported dutiable liquors, which is now stored in a bonded warehouse, do not bear labels on their containers stating their alcoholic strength information? |
| A.10 |
To comply with Regulation 67A of the Dutiable Commodities Regulations, Chapter 109A, Laws of Hong Kong, you should contact the related manufacturer of the imported liquors to ascertain the alcoholic strength information and then serve the Department a "Notification of Operation-in-bond" (CED 86) to apply for operation-in-bond with the available information.
However, if you cannot ascertain the alcoholic strength information from the manufacturer after effort, you can apply for exemption from the labelling requirement on alcoholic strength in writing or in the form of an electronic record.
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