In international shipping, shipping costs will always be levied against shippers asking the services of shipping. The ruling in this industry is that any goods or container ship that will pass through international airspace or waters are subjected to the assessment and the imposition of shipping cost. Now, these costs are too general and that if you are new in the business then it is important that you should be aware of the composition of the costs. Two major composition of the cost include the duties and the taxes. Now don’t think of the duties and the taxes as crosses that every businessman and shipper should bear. The duties and the taxes are in place not just to make the lives of shippers miserable; these taxes and duties are imposed by the country in order to protect the other players and industries in the home country from the undue advantage of other industry players. Another intention for the imposition of duties and taxes is that these will help the host country raise more revenues. In the most common practice, the person will have to pay for the duties and the taxes just before the goods and the products will be released by the Customs office. The duties and the taxes that will be levied against the shipment are not random and just taken out of thin air. There are bases for the figures, and some of these factors include the value of the product, the trade agreements that are in effect, the country or origin or manufacture, how the products are used and the Harmonized System Code. The Harmonized System Code is unique to the shipping industry. This is the code that is associated to one particular product, and the intent of having this kind of coding is to allow for uniform labeling of products and packages for billing purposes.
Other important components that should be understood are the Value Added Tax and the Goods and Services Tax. The VAT is the more popular acronym, and this is the general consumption tax that is added to the value for sale of the product or package. In other countries this is known in other names including the Goods and Services Tax or the GST. And all members of the European Union have VAT, and the only question is how much will this VAT be. There are other components for the shipping costs, but keep in mind that the bulk of costs can be linked to duties, taxes and the VAT.