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.
Classification determines how much duty will be collected.
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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
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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

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
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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

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.
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Rate of Duty (%) MFN Hdg. No. AHTN Code 2012 DESCRIPTION 20122013 20142015 ASEAN Member States Enjoying Concession

ATIGA

(1) 84.01

(2)

(3) Nuclear reactors; fuel elements (cartridges), non-irradiated, for nuclear reactors; machinery and apparatus for isotopic separation.

(4)

(5)

(6)

(7)

8401.10.00
8401.20.00

- Nuclear reactors
- Machinery and apparatus for isotopic separation, and parts thereof - Fuel elements (cartridges), nonirradiated - Parts of nuclear reactors

3
3

3
3

0
0

Except LA.
Except LA.

8401.30.00
8401.40.00

3
3

3
3

0
0

Except LA.
Except LA.
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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

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 products originating status.
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Top traded products between Japan and Philippines

AHTN 2012 DESCRIPTION FTA MFN RATE, % FTA RATE, % PSR

0803.90.00
(PH rate: MFN 15% PJEPA 0 AJCEPA 8)

Bananas, fresh or dried

Japan
AJCEPA

20 / 25 / 3
15.5 / 22.7 / 0 CC

PJEPA

5.5 /9.1 / 10.9/19.1 / 0

CC

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Top traded products between Japan and Philippines

AHTN 2012 DESCRIPTION FTA MFN RATE, % FTA RATE, % PSR

4418.10.00
(PH rate: MFN 5% PJEPA 0 AJCEPA 0)

Windows, Frenchwindows and their frames

Japan AJCEPA PJEPA

0
0 0 CTH CTH

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Top traded products between Japan and Philippines

AHTN 2012 DESCRIPTION FTA MFN RATE, % FTA RATE, % PSR

4418.90.10
(PH rate: MFN 5% PJEPA 0 AJCEPA 0)

Cellular wood panels

Japan AJCEPA PJEPA

5
0 0 CTH CTH

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Top traded products between Japan and Philippines

AHTN 2012 DESCRIPTION FTA MFN RATE, % FTA RATE, % PSR

8544.30.12 8544.30.13 8544.30.14 8544.30.19

(PH rate: MFN 15/30 PJEPA 8/S AJCEPA 8/15/30)

Wiring harnesses for motor vehicles

Japan AJCEPA
PJEPA

0
0 0 RVC (40) or CTH RVC (40) or CTH

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How can you avail of these incentives?

1. 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.

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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)
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Accomplished TC Form 1

Advance Ruling issued

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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
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Thank you!!

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