Customs tariff classification services: –
- We audit the tariff classification of imported and exported goods of a company
- We identify potential duty saving and problems.
- Prepare an assessment report enumerating and explaining the findings.
- Apply for customs tariff ruling if required.
Questions to be answered when classifying an item:
- What it is?
- What is it made of?
- How will it function?
- What are the principal and secondary uses of the item?
- What types of marketing claims will be made about the goods relative to its attributes?
- Is the product a finished good or subassembly? If a subassembly, how is it incorporated into a finished product? Does it have a stand-alone function?
- How is the item packaged?
Steps of tariff classification
As classification is determined according to raw or basic material, degree of processing, use or function, economic activities, etc – the information required will vary in respect of natural products; raw materials; semi-finished goods; and fully manufactured goods, articles, machinery, vehicles, aircrafts, vessels, instruments, arms and ammunition, work of art, etc.
- Refer the heading and sub-heading. Read corresponding Section Notes and Chapter Notes. If meaning of word is not clear or there are ambiguities or confusion, refer to:
- HSTH explanatory notes
- SARS Tariff rulings
- court rulings
- WCO rulings
- Trade understanding of product
- Ruling in other countries
- Online resources
- If goods are incomplete or un-finished, but classification of finished product is known, find if the un-finished item has essential characteristics of finished goods. If so, classify in same heading. Rule 2(a).
- As per Rule 2(b), any reference to a material or substance includes a reference to mixtures or combinations of that material or substance with other material or substance.
- If ambiguity persists, find out which heading is specific and which heading is more general. Prefer specific heading. – Rule 3(a).
- If problem is not resolved by Rule 3(a), find which material or component is giving ‘essential character’ to the goods in question. – Rule 3(b).
- If both are equally specific, find which comes last in the Tariff and take it – Rule 3(c).
- If you are unable to find any entry which matches the goods in question, find goods which are most akin. – Rule 4. Internationally accepted (even with courts) that the nomenclature has not kept up with the pace of technological innovation, and therefore a subheading is presumed to include all forms of the article, unless excluded by any relevant legal notes – this is referred to as EO NOMINE PROVISION
- Rule 5(a) – Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long‑term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;
- Rule 5(b) – Subject to the provisions of Rule 5 (a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. In other words, packing containers normally used for marketing beverages, jam, mustard, spices, etc., are to be classified with the goods they contain. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.
- RULE 6 – The classification of goods in the subheading of a heading shall be determined by applying Rules 1 to 4 in sequence and Rule 5, first to the five-digit (or one-dash) subheading and then to the six-digit (or two-dash) subheadings
Broad grouping of goods in the Harmonized System (HS):
- Animal Products (Section I – Chapters 1 to 5)
- Vegetable Products (Section II – Chapters 7 to 14)
- Animal or vegetable fats (Section III – Chapter 15)
- Prepared foodstuffs, beverages (Section IV – Chapters 16 to 24)
- Mineral Products (Section V – Chapters 25 to 27)
- Chemicals, Fertilisers, soap etc. (Section VI – Chapters 28 to 38)
- Plastics and Rubber and their articles (Section VII – Chapters 39 and 40)
- Leather and articles (Section VIII – Chapters 41 to 43)
- Wood, cork, straw and their articles (Section IX – Chapters 44 and 46)
- Pulp, Paper, Paper-board and articles (Section X – Chapters 47 to 49)
- Textile and Textile Products (Section XI – Chapters 50 to 63)
- Footwear, Headgear, Umbrellas, Articles of human hair (Section XII – Chapters 64 to 67)
- Articles of stone, plaster, ceramic, glass (Section XIII – Chapters 68 to 70)
- Pearls, precious metals (Section XIV – Chapter 71)
- Base metals and articles of base metal (Iron, Steel, Copper, Nickel, Zinc, Tin etc.). (Section XV – Chapters 72 to 83)
- Machinery and mechanical appliances, electrical equipments, television etc. (Section XVI – Chapters 84 and 85)
- Vehicles, Aircrafts, vessels ( Section XVII – Chapters 86 to 89)
Optical, photographic, medical, surgical instruments, clocks, musical instruments (Section XVIII – Chapters 90 to 92)
- Arms and Ammunition (Section XIX – Chapter 93)
- Misc. Manufactured articles like Furniture, toys etc. (Section XX – Chapters 94 to 96)
- Works of Art, collectors’ pieces and antiques (Section XXI – Chapters 97 to 99)
Example of a simple tariff classification report