Import VAT is often the largest tax line on a garment shipment, and the most misunderstood. Unlike customs duty, it is not a cost for a VAT- or GST-registered business in most markets: it is claimed back, and in several countries it never has to be paid at the border at all. This guide shows how import VAT is calculated on clothing from India in five markets and how a registered importer recovers it. Checked against official sources on 7 10月 2026.
Two different taxes at the border
- Customs duty is a final cost. A trade agreement can lower it, for example to 0% in the UK, Australia and the UAE for Indian garments with proof of origin.
- Import VAT or GST is a consumption tax collected early. A registered business deducts it as input tax, so it is a cash-flow item, not a cost. Trade agreements do not remove it.
Because VAT is usually charged on the customs value plus the duty, a lower duty also lowers the VAT slightly.
Market by market
| Market | Rate on adult clothing | Charged on | How a registered importer recovers it |
|---|---|---|---|
| 英国（UK） | 20% (children’s clothing zero-rated) | 関税額 (CIF) + duty | Postponed VAT accounting: nothing paid at the border; declared and reclaimed on the same VAT Return. No approval needed. |
| 欧州連合（EU） | Member-state standard rate, 例えば. 19% ドイツ, 20% フランス, 21% オランダ | 関税額 (CIF) + duty | Deducted as input tax on the VAT return. Several states allow accounting in the return instead of paying at the border (例えば. オランダ’ Article 23 licence, Belgium’s ET14000); Germany offers a customs deferment account. |
| オーストラリア | 10% 消費税 | 関税額 + duty + international freight and insurance | Deferred GST scheme for monthly BAS lodgers: reported and credited on the same BAS. Otherwise paid at clearance and claimed as an input tax credit. |
| アラブ首長国連邦（UAE） | 5% VAT | CIF value + duty | Reverse charge: a registered importer self-accounts in its VAT return and recovers the same amount, so nothing is paid at the border. |
| アメリカ合衆国 | No import VAT | — | Not applicable; state sales tax is not collected at the border. |
Worked examples
コットン ドレス invoiced at 10,000 (local currency), と 600 freight and 50 保険, imported with proof of Indian origin:
| Market | Duty | Import VAT / 消費税 | Net cost of the VAT to a registered importer |
|---|---|---|---|
| イギリス (CETA 0%) | GBP 0.00 | GBP 2,130.00 (20% × 10,650) | Nil under postponed accounting |
| ドイツ (GSP 9.6%) | EUR 1,022.40 | EUR 2,217.76 (19% × 11,672.40) | Nil once deducted; cash-flow until then unless deferred |
| オーストラリア (ECTA 0%) | AUD 0.00 | AUD 1,065.00 (10% × 10,650) | Nil under deferred GST |
| アラブ首長国連邦 (CEPA 0%) | AED 0.00 | AED 532.50 (5% × 10,650) | Nil under reverse charge |
In Australia, duty is charged on the FOB value (here AUD 10,000). Freight and insurance are added back for GST.
When import VAT IS a cost
- The importer is not registered for VAT or GST, for example a small boutique below the registration threshold or a private buyer.
- The importer cannot deduct input tax for that activity.
- The goods are imported under terms where nobody registered recovers it. Under DDP terms the seller pays the import VAT and can recover it only if it is registered for VAT in the destination country.
Check your own garment
Every duty calculator shows the VAT line and its base: イギリス · ドイツ · オーストラリア · アラブ首長国連邦 · 私たち · all 53 国々.
We manufacture and export garments from India and provide the origin documents that lower the duty line. Talk to us.
Sources
- GOV.UK: Working out the VAT value using the customs value; Account for import VAT on your VAT Return
- EUR-Lex: VAT Directive 2006/112/EC, Articles 85–86 そして 211; European Commission: Taxes in Europe Database (VAT rates)
- Australian Border Force: GST and other taxes on imported goods; ATO: Deferred GST scheme
- UAE Federal Tax Authority: VAT Importers User Guide
- Cornell LII: 19 CFR 152.103 (US transaction value)
Indicative information from official sources, written 7 10月 2026. Rates verified on against the official tariffs. It is not tax advice; confirm your position with your accountant or customs broker.
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