How Much Are Australian Import Duties On Diamond Engagement Rings?

Question: Hi, I am enquiring about buying a diamond from a US site, but don’t want to get slugged with taxes (duties and GST ). What are the taxes I would have to pay? would it be more than I would save by buying at an overseas site? I don’t want to buy something from overseas and find out that it would have been cheaper to buy it here locally. I know that it’s good to go to a jeweller, but for the type I want (H, VVS1, 1 carat, excellent cut) I can’t seem to find anyone in Australia who will charge less than AU$20,000. I am willing to spend up to $15,000. Also with the exchange rate fluctuating, I don’t know if it’s a good idea to buy from overseas. How much is import duty in Australia if I buy a diamond from overseas online? Is it cheaper to just buy locally? How much can I save? Or will it be more costly? Greg.

Answer: I’m glad you asked about this because it’s important to run the numbers so as not to be intimidated by the “unknown”. As you can see from the listed prices on the jewellery sites I recommend there are some incredible bargains, but no one wants to pay any more tax than is absolutely necessary. So let’s break it down and see what you will have to pay.

In Australia you used to have to pay 5% customs duty on the value of the goods (anything over AU$1,000.00), and 10% on the total cost, after you’ve added the customs duty.

The 5% customs duty has now been waived under the AUSFTA.

So there’s only GST to calculate. If you see something you want at a site that is in the USA just make sure it is at least 10% cheaper.

Just to show an example we can test this out with some “street prices” that are advertised as “wholesale” from a diamond seller in Brisbane.

Here is a list of prices of diamonds which fit your criteria from an Australian jeweller (Brisbane).

australian-diamond-prices-screenshot

These all have GIA certificates, which makes it easy to compare with overseas diamond sellers. Please note that this only includes the diamond, so you’ll be adding a ring setting as well, which would add anywhere from $300 to $2000.

I will use the seventh diamond on this list as our chosen diamond for this comparison, as it seems to be a fairly good deal. There is a cheaper one, and while I don’t think it’s necessary to panic over fluorescence in a diamond, I will exclude this one for the purposes of this exercise.

The one I chose has all the characteristics you are looking for, though it doesn’t have the highest grade as far as symmetry goes. It will fit within the budget with enough money left over to get a nice ring, even platinum, if desired.

Let’s say you choose this diamond at US$13,738.00. In Australian dollars this comes to AU$13,258.00. We will still have to add a setting, for which we will budget AU$1,100.00.

Total is AU$14,358.00 The shipping and insurance cost is AU$175.00.

So unless you go and pick it up in person the total cost is AU$14,533.00.

australian-diamond-prices-screenshot

 

 

Now let me compare this to a diamond with nearly all the same characteristics (except, a little bit better fluorescence grade) found at Diamonds-USA

http://www.diamonds-usa.com/diamonds/diamond_details.asp?wizard=Diamonds&Did=1103454&MDSID=1&ext=1&refid=1381

  • Shape: Round
  • Color: H
  • Clarity: VVS2
  • Cut: Ideal Cut
  • Weight: 1 ct
  • Measurements: 6.36-6.40*3.99
  • Depth: 62.5%
  • Table Diameter: 55%
  • Certificate Issuer: GIA
  • Symmetry: Very Good
  • Fluorescence: none
  • Price: AU$8353.00
  • Shipping cost: $0
1 carat, Round Diamond, Ideal Cut, H Color, VVS2 Clarity, certified by GIA
click to go to this diamond at Diamonds-USA.com

 

If you budget about $1,100.00 for the setting there are a number of styles to choose from Diamonds-USA’s selection of platinum ring settings.

 

The dollar amount we have so far comes to AU$9,453.00

Then add 10% GST which makes the complete cost of this diamond engagement ring bought at Diamonds-USA come to AU$10,398.30 

Compare this to the diamond engagement ring from Brisbane which had a total cost of AU$14,533.00

Total savings: AU$4,134.70

Of course if you buy something under $1,000.00 from overseas then there isn’t even the GST charge.

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