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THE IMPORTANCE OF KNOWING THE CORRECT TARIFF CLASSIFICATION OF PRODUCTS

THE IMPORTANCE OF KNOWING THE CORRECT TARIFF CLASSIFICATION OF PRODUCTS. Understanding Tariff Classification All traded goods that enter a country must be categorized according to the Harmonized System The act of placing goods in the correct category is called classification .

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THE IMPORTANCE OF KNOWING THE CORRECT TARIFF CLASSIFICATION OF PRODUCTS

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  1. THE IMPORTANCE OF KNOWING THE CORRECT TARIFF CLASSIFICATION OF PRODUCTS

  2. Understanding Tariff Classification • All traded goods that enter a country must be categorized according to the Harmonized System • The act of placing goods in the correct category is called classification. • Classification determines how much duty will be collected.

  3. Harmonized System • an international multipurpose product • nomenclature developed by the • World Customs Organization (WCO) • To achieve international uniformity in the classification of goods • To provide an updated nomenclature to take account of technological developments and changes in international trade patterns

  4. Harmonized System Section II Vegetable Products Chapter 8 Edible fruits and nuts; peel of citrus fruit or melons Heading 08.03 Bananas, including plantains, fresh or dried 0803.10 - Plantains 0801.90 - Other

  5. ASEAN Harmonized Tariff Nomenclature • An 8-digit commodity nomenclature based • on the HS • It involves an alignment of national tariff • requirements of each ASEAN member • country • Started in 2004 • The NEDA Board approved the adoption of AHTN 2012 on 18 Sept 2012

  6. ASEAN Harmonized Tariff Nomenclature Section II Vegetable Products Chapter 8 Edible fruits and nuts; peel of citrus fruit or melons Heading 08.03 Bananas, including plantains, fresh or dried 0803.10.00 - Plantains 0801.90.00 - Other

  7. Tariff and Customs Code of the Philippines • The HS- and AHTN-based Philippine tariff • nomenclature which determines the tariff • classification and the corresponding rates of • duty is contained under Sec 104 of the TCCP. • The TCCP is being administered and • maintained by the Tariff Commission under • Executive Order No. 688 which empowers • the Tariff Commission to amend the • nomenclature but not the tariff rates.

  8. FREE TRADE AGREEMENT • a legally binding agreement between • 2 or more countries to reduce or • eliminate barriers to trade, and facilitate • the cross border movement of goods, • services and investments between the • territories of the Parties

  9. Benefit of FTAs to businesses Trade in Goods (TIG): Tariff concessions for eligible exports • FTAs do not award tariff benefits to all goods. • To qualify for preferential tariffs, goods must be (Philippine) originating. Rules of Origin An objective set of criteria set up to determine a product’s originating status.

  10. Top traded products between Japan and Philippines

  11. Top traded products between Japan and Philippines

  12. Top traded products between Japan and Philippines

  13. Top traded products between Japan and Philippines

  14. How can you avail of these incentives? • Know the correct AHTN heading of your product. • 2. Verify if the product is offered under FTAs. • 3. Compare the tariff rates under MFN and FTA. • 4. Check the “Product Specific Rules or PSR”.

  15. TARIFF CLASSIFICATION RULINGS • Section 1313a of the Tariff and Customs Code • TC Form 1 (Imports) • TC Form 2 (Exports) • Forms downloadable at TC Website • Submit accomplished form, together with samples, technical brochures (description, function, composition, etc.) • Filing Fee (P300.00 per article)

  16. Advance Ruling issued Accomplished TC Form 1

  17. TARIFF COMMISSION 5th Floor Philippine Heart Center, East Avenue, Diliman, Quezon City Tel. (+632) 926-8731 Fax (+632) 921-7960 Website: www.tariffcommission.gov.ph Email/s: info@tariffcommission.gov.ph

  18. Thank you!!

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