VCN - In the case of Minh Giang private enterprise suing Da Nang Customs Department, it is claimed that the basis for HS code determination of the Customs agency is not specific. However, the basis for classification of the Customs agency is very clear!
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The basis for goods classification is very clear
The leader of the Department of Import-Export Tax (General Department of Customs) said that the Customs agency always classify goods based on the law.
Minh Giang private enterprise presented that items can be linked together to create a complete chain used for lifting objects of different weight. However, the manufacturer's documentation information and actual use showed that the hook, connecting link, master link and shortening hook are not disassembled parts of the chain but are attached accessories. Therefore, these items are classified as separate items.
According to the current regulations in Clause 1, Article 26 of the Customs Law No. 54/2014 / QH13 dated June 23, 2014, Article 16 of Decree 08/2015 / ND-CP of the Government and Article 4 of Circular No. 14/2015 / TT-BTC dated January 30, 2015:
The classification of goods must be based on customs documents, technical documents and other information related to imported and exported goods for identification of goods’ names and HS codes according to the Vietnam Imports and Exports Classification Nomenclature
If the classification of goods have been done but HS codes according to Vietnam Imports and Exports Classification Nomenclature have not been identified, the documents prescribed in Article 6 of Circular No. 14/2015/TT-BTC shall be used: Explanatory Notes; the Compendium of WCO’s Classification Opinions; the Supplementary Explanatory Notes of ASEAN Harmonized Tariff Nomenclature 2017 (AHTN) and Database of Vietnam Imports and Exports Classification Nomenclature.
The Vietnam Imports and Exports Classification Nomenclature in particular, issued together with Circular No. 103/2015 / TT-BTC dated July 1, 2015 of the Ministry of Finance took effect from January 1, 2016 to December 31, 2017. This Nomenclature was developed in compliance with the HS Nomenclature of the World Customs Organization (at 6- digit level) and the ASEAN Harmonized Nomenclature (at 8-digit level).
The classification of chains, parts thereof of chains, chain accessories, in addition to the contents described in the Vietnam Imports and Exports Classification Nomenclature, the Explanatory Notes and the Compendium of WCO’s Classification Opinions for related headings is as follows:
Explanatory Notes 73.15 "Chains and parts thereof of chains, of iron or steel": All these chains may be linked with final parts or parts thereof (eg hook and spring hook, linkage, links, clamp, fittings, belt rings and T-parts). They may or may not be cut in length, or have been defined for special uses.
Removable parts of iron or steel of specialized chains in the correct sense such as articulated links, rollers, screws for articulated link chains, connecting links and links for disarticulated link chains are also in this heading
Thus, heading 73.15 covers items as specialized parts, which can be clearly defined for use for the chain types within heading 73.15.
The Explanatory Notes for heading 73.26 "Other products of iron or steel". This heading covers all products of iron or steel obtained by forging, stamping, cutting or embossing or by other methods such as bending, assembling, welding, turning, grinding or punching excluding products in the above headings of this Chapter or products described by the Note 1 to Section XV or in the Chapter 82 or 83 or more specifically described elsewhere in the Nomenclature.
This heading covers hangings or joints for porcelain chains (hanging bars, clamp rings, collars, eyelets or rings with riveted joints, spherical joints, clamps for hanging, rag nail, forged hooks for cranes, spring hooks for all purposes;
Heading 73.26 therefore covers items identified as chain’s accessories
In addition, in the Compendium of WCO’s Classification Opinions 2017, the item with trade name "Connecting link" is an accessory of the chain and is classified into heading 73.26.
On the basis of the above classification rules, chains, chain parts and chain accessories are classified as follows:
Chain parts items are classified in heading 73.15 "Chains and parts thereof of chains, of iron or steel", sub-heading 7315.90 " Other ".
Chain’s accessories items are classified in heading 73.26 "Other articles of iron or steel", subheading 7326.90 " Other".
Is the guidance contradictory?
Official Letter No. 5342/TCHQ-TXNK dated June 8, 2016 of the General Department of Customs sent to the provincial and municipal customs departments identified that "shackles of steel (without thread) often used to connect between two links are subject to the heading 7315.90." Now, Official Letter No. 5048 / BTC-TCHQ sent to the People's Court of Da Nang City classified these items into heading 73.26.
According to the leader of the Import and Export Tax Department, the Official Letter No. 5342/TCHQ-TXNK dated June 8, 2016 guided that the Kenter shackle is a shackle of steel (without thread) which is commonly used between two links, and is subject to code 7315.90.
The Kenter shackle is defined as a part of the chain, used to connect the links to each other. Meanwhile, the Connecting link item is a chain’s accessory, often used in chain hoists, to connect chains, to connect chains with hooks and connect chains with master rings. Therefore, Kenter shackle and Connecting link have different nature and uses.
Items from section 08 to 42 in the declaration are accessories, not parts thereof of the chain, so they are not eligible to apply rule 2 (a) for unassembled or disassembled items.
Responding to the claim that the items imported by Minh Giang private enterprise from section 08 to 42 in the customs declaration have no name, are not described in heading 73.26 but in Official Letter No. 5048, they are classified in code 73.26, which is contrary to the "The International Convention on the Harmonized Commodity Description and Coding System” that Vietnam has acceded to; violates Clauses 1 and 2, Article 6 of Circular No. 14/2015/TT-BTC dated January 30, 2015 of the Ministry of Finance, the representative of the Department of Import-Export Tax, said that items not specifically identified in the Vietnam Import and Export classification Nomenclature, shall be classified into the sub-heading “Other”.
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Items from section 08 to 42 in the customs declaration imported by Minh Giang private enterprise belong to Chapter 73 "Articles of iron or steel", but have not been detailed elsewhere, so they are classified into heading 73.26 "Other articles of iron and steel”
By Thu Trang/ Huyen Trang