Công văn 7203/TCHQ-TXNK

Through inspection of the customs system, General Department of Customs has discovered errors committed by some customs units of provinces and cities in classification of goods and imposition of tax rates. To be specific:

1. Customs clearance is granted while names, composition, properties, contents, etc. of goods are not fully declared according to Vietnam’s Export and Import Classification Nomenclature. For instances:

- Customs clearance is granted to goods declared as “plastics duct tape” under HS code 3919.10.99 though without adequate descriptions of their composition advertisement sizes.

- Customs clearance is granted to goods declared as “copper foil” under HS code 7410.11.00 specifying they are refined copper or copper alloy, backed or not backed.

- Customs clearance is granted to goods declared as “pressed buttons” under HS code 9606.10.90 though their materials are not specifically described.

(More details in Appendix I)

2. Customs clearance is granted to shipments of goods with the same descriptions but different HS codes. For instances:

- Customs clearance is granted to goods declared as “product catalogues” under HS codes 4901.10.00 (0% tax), 4811.49.90 (15% tax), 4911.10.90 (20% tax).

- Customs clearance is granted to goods declared as “Aluminum liquid nitrogen tanks for preservation of animal semen” under HS codes 7613.00.00 (3% tax) and 7612.90.90 (15% tax).

(More details in Appendix II)

3. Customs clearance is granted to goods that do not match declared HS codes. For instances:

- Customs clearance is granted to goods declared as “Norfloxacin” under HS codes 2921.59.00, 2941.30.00, 2941.90.00 while it matches HS code 2933.59.90.

- Customs clearance is granted to goods declared as “instant seaweed” under HS code 2008.99.90 while it matches HS code 2008.99.30.

(More details in Appendix III)

4. Some Provincial Customs Departments fail to fully implement instructions provided by General Department of Customs regarding application of HS codes. To be specific: General Department of Customs sent Official Dispatch No. 1870/TCHQ-TXNK dated 28/4/2011 to Customs Departments of provinces regarding classification of ammonium nitrate under HS code 3102.30.00. However, customs clearance is still granted to this commodity under HS code 2834.29.90.

(More details in Appendix IV)

5. Inaccurate declarations of HS codes and applied duty rates under ordinary export and import tariff schedules and FTA tariff schedules. To be specific:

- Regarding export tariff: General Department of Customs issued Official Dispatch No. 832/TCHQ-TXNK dated 09/2/2018 and Official Dispatch No. 2774/TCHQ-TXNK dated 21/5/2018 on rectification of export duty declaration process. However, customs clearance is still granted to export declarations without 10-digit codes. For instance: in the first 6 months of 2020, 41 rows do not contain the 10-digit code of “aluminum ingot”.

- Regarding ordinary import tariff: General Department of Customs issued Official Dispatch No. 1693/TCHQ-TXNK dated 30/3/2018, Official Dispatch No. 2168/TCHQ-TXNK dated 23/4/2018 and Official Dispatch No. 3128/TCHQ-TXNK dated 5/6/2018 demanding inspection of application of ordinary import tariff. However, customs clearance is still granted to import declarations that contain incorrect tariff schedule codes. For instance: In declaration No. 103182010960/A11 dated 3/5/2020, the code B01 is used for Sudan as importing country.

- Regarding FTA tariff schedules: General Department of Customs finds that customs clearance is still granted to import declarations that do not contain 10-digit codes. For instance: Declaration No. 103339089121/A11 dated 30/5/2020 contains the HS code 1211.90.99, tariff schedule code B05 while the codes 1211.90.99.10 and 1211.90.99.90 of sub-heading 1211.90.99 under ACFTA tariff schedule should have been used.

(More details in Appendix V)

6. Use of units of measurement on customs declarations:

Pursuant to Circular No. 39/2018/TT-BTC dated 20/4/2018, Quantity (1) and Quantity (2) must be specified by the customs declarant.

According Customs Statistics and Information Technology Department, only 2% of enterprises declare Quantity (2) on their customs declarations.

In addition, when inspecting red channel and yellow channel declarations, customs officials usually do not inspect the Quantity (2), thus do not request declarants to provide the missing value. This causes difficulties to the process of statistics production, evaluation and formulation of export and import management policies (e.g. pricing policies).

In order to standardize the commodity classification database, uniformly apply HS codes and eliminate the aforementioned issues, General Department of Customs hereby request that:

1. Provincial Customs Departments shall:

(1) Review information about suspicious commodities in the Appendices; implement measures for uniform application of HS codes; review their own data about similar cases. Submit reports to General Department of Customs (Export and Import Duty Department); send soft copies to [email protected] before December 31, 2020 according to Form 1 and Form 2 enclosed herewith.

(2) Prepare quarterly reports on review of the cases in which a different HS codes are applied to the same commodity, declaration and application of tax under ordinary, MFN and FTA tariff schedules according to Form 1 and Form 2 enclosed hereof; send the reports to Department of Customs (Export and Import Duty Department); send soft copies to [email protected].

(3) Instruct enterprises to fully provide goods descriptions to avoid incorrect classification; customs officials must carefully inspect the goods description, codes and tax rates declared in accordance with Document No. 1921/QĐ-TCHQ dated 28/6/2018.

(4) Instruct enterprises to specify Quantity (1) and Quantity (2) on the customs declaration in accordance with Appendix I of Circular No. 39/2018/TT-BTC dated 20/4/2018; Inspect units of measurement on yellow channel and red channel customs declarations or inspect after customs clearance is granted for green channel declarations).

2. Post-customs Clearance Inspection Department and Anti-smuggling and Investigation Department shall:

Submit reports on actions against HS code-related violations according to Form 3 enclosed herewith to General Department of Customs (Export and Import Duty Department); send soft copies to [email protected].

3. Customs Statistics and Information Technology Department and Risk Management Department shall:

- Cooperate with other units in implementing measures for prevention of frauds by establishing parameters of the System and channeling criteria and receiving information about HS codes in case of changes to the Nomenclature or tariff schedules from Export and Import Duty Department.

- Customs Statistics and Information Technology Department shall create a feature in the customs declaration software (on enterprises’ end) in case units of measurement are not updated according to regulations in Vietnam’s Export and Import Classification Nomenclature in “Quantity (2)” field.

4. Customs Testing Department shall:

Review the notifications of analysis results enclosed with HS codes in order to ensure uniform application of HS codes; submit quarterly reports according to Form No. 4 to Export and Import Duty Department for consolidation.

5. Export and Import Duty Department shall:

- Quarterly review the notifications of classification results to ensure uniform application of HS codes according to Form No. 4.

- Consolidate reports of units and submit quarterly reports to General Department of Customs for timely and uniform guidance.

(Appendices are in the CD attached to this document).

For your information and compliance./.