Harmonized System-Classification and Tariff System PDF

Harmonized System- Classification and Tariff System Done by: Mrs. Tennille Perera TIME: 9:00 AM – 5:00 PM Date: 2nd November, 2024 OUTLINE/OBJECTIVE  Overview of the Structure of the HS  Identify and define what is the HS?  Recognize the...

Harmonized System- Classification and Tariff System Done by: Mrs. Tennille Perera TIME: 9:00 AM – 5:00 PM Date: 2nd November, 2024 OUTLINE/OBJECTIVE  Overview of the Structure of the HS  Identify and define what is the HS?  Recognize the purpose and importance of the HS  Describe the structure of the HS  Recognize the importance of knowing the structure in order to understand the GIR  General Interpretation of the Rules  List or state the Rules  Interpret and explain the 6 Rules of Interpretation  Analyse and apply the Rules THE LAW THAT GOVERNS US The Belize Customs Tariff and Trade Classification is governed by the International Convention  Legal authority: Chapter 48 Customs & Excise Duties Act Section 3(1) First Schedule & (10), 8, 12  WHAT IS THE HARMONIZED SYSTEM (HS)  The “Harmonized Commodity Description and Coding System”,  A standardized numerical method of classifying traded products.  Used by countries around the world to uniformly identify and describe products for purposes such as assessing duties and gathering statistics  is multipurpose international product nomenclature for the classification of products.  A universal economic language  code for goods  WHAT IS THE HARMONIZED SYSTEM (HS)  Progressive, comprehensive and systematically organized according to easily understood principles.  must adhered to the schedules set by WCO to prepare amendments to the HS every 5-6 years and also to the explanatory notes.  based on the Harmonized Commodity Description and Coding System (Ninth (9th) Edition, 2022).  Harmonized System (HS) classification Governing Bodies?  Governed by "The International Convention on the Harmonized Commodity Description and Coding System".  COTED- Council for Trade and Economic Development  established the HS in 1988  responsible for schedule of rates  WCO- Harmonized System Committee-  Administrated, developed and maintained  Responsible for nomenclature and legal notes  FUNCTION OF THE HARMONIZED SYSTEM COMMITTEE 1.The Harmonized System Committee, having regard the provisions of Article 8, shall have the following functions: a. To propose such amendments to this Convention as may be considered desirable, having regard, in particular, to the needs of users and to changes in technology or in patterns of international trade; b. To prepare Explanatory Notes, classifications opinions of the other advice as guides to the interpretation of the Harmonized System; c. To prepare recommendations to secure uniformity in the interpretation and application of the Harmonized System; d. To collate and circulate information concerning the application of the Harmonized System;  FUNCTION OF THE HARMONIZED SYSTEM COMMITTEE cont. a. On its own initiative or on request, to furnish information or guidance on any matters concerning the classification of goods in the Harmonized System of Contraction Parties, to Members of the Council and to such intergovernmental or other international organizations as the Committee may consider appropriate; b. To present Reports to each Session of the Council concerning its activities, including proposed amendments, Explanatory Notes, Classification Opinions and other advice; c. To exercise such other powers and functions in relation to the Harmonized System as the Council of the Contracting Parties may deem necessary. 2. Administration decisions of the Harmonized System Committee having budgetary implications shall be subject to approval by the Council.  Harmonized system Committee  A Committee to be known as the Harmonized system Committee, composing of representatives from each of the Contracting Parties was established under the International Convention on the Harmonized Commodity Description and Coding System.  It has undergone several changes in the classification of products.  These changes are called revisions and entered into force in  1966,  2002  2007  2012  2017/2018  2022  WHY CREATED and USED BY WHO: HARMONIZED SYSTEM (HS) WHY: contributes to :  the harmonization of Customs and trade procedures, and  the non-documentary trade data interchange in connection with such procedures,  an essential tool for international trade Who uses the HS  It is also extensively used by  Governments,  International organizations  Private sector  Why is it important: Purpose of the HARMONIZED SYSTEM (HS) Purposes such as:  o Internal taxes o Transport statistics o Trade policies o Price monitoring o Monitoring of controlled goods o Quota controls o Rules of origin o Compilation of national o Freight tariffs accounts o Economic research and analysis  HS- TARIFF SYSTEM - CET  COMMON EXTERNAL TARIFF (CET)  a uniform tax or tariff that a group of countries in a customs union or common market such as the CARICOM (Caribbean Community) apply to imported goods from outside the union or community.  The same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which country within the area they are entering.  Under the HS Convention, the contracting parties are obligated  to base their tariff schedules on the HS nomenclature,  although parties set their own rates of duty  free to adopt additional subcategories and notes.  HS- TARIFF SYSTEM - CET  The purpose of a CET is to protect the member countries from outside competition while also promoting trade between them  Member countries eliminate tariffs on trade with each other, but apply the same tariffs to imports from outside the union  The Belize CUSTOMS TARIFF and Trade Classification  National tariff has been prepared to implement the Common External tariff (CET) of CARICOM, established by COTED.  Based on 9th edition 2022  The Customs tariff schedule essentially comprises of two elements;  a goods nomenclature (WCO)  a list of tariff rates (COTED)  NOMENCLATURE?  The nomen- in nomenclature comes from the Latin word for name.  Nomenclature is a system for giving names to things within a particular discipline, profession or field. (vocabulary.com).  TARIFF RATES  A TARIFF is a tax imposed on imported or exported goods and services  THERE ARE 2 TYPES OF TARIFF RATES IN THE NATIONAL TARIFF: Specific or Advolorem  TARIFF RATES AdValorem is a duty applied to the cost of an item e.g 5%, 10%, 15% A specific tariff or specific duty is applied to items weight or volume e.g 2204 – liquor , 2710 – fuel , 2402/3 – cigarettes, cigars , 0701/03 – onion and potato  CALCULATING SPECIFIC TARIFF  THE LAWS THAT GOVERNS SPECIFIC DUTIES CALCULATIONS  Customs and excise duties act chapter 48 SECTION (8) AND (12)  Mode of ascertaining specific duty: Reputed pint, split and quart  Legal bearing: Customs and excise duties act chapter 48 revised edition 2000 showing the law as at 31st December, 2000.  “reputed split” means any volume not less than 5 fluid ounces and not more than 6 2/3 fluid ounces (equivalent to 148-197 ml)  “reputed pint” means any volume not less than 8 2/3 fluid ounces and not more than 13 1/2 fluid ounces; (equivalent to 256ml - 399 ml)  “reputed quart” means any volume not less than 20 fluid ounces and not more than 26 2/3 fluid ounces; (equivalent to 591ml - 789 ml) Mode of ascertaining specific duty. 14 of 1992. chap 48(8)  8.-(1) For the purpose of ascertaining the amount of specific duty payable on SPIRITS AND WINE,  six reputed quarts (591ml - 789 ml ) or  twelve reputed pints (256ml - 399 ml ) or  twenty-four reputed splits (148-197 ml)  shall be deemed equivalent to one IMPERIAL GALLON. Chapter 48:8(1) cont.  Where the volume of SPIRITS AND WINE in any container is other than a reputed quart, reputed pint or reputed split, the duty shall be paid on the actual volume as ascertained by measurement.  The duty on malt liquor shall in all cases be ascertained by the actual volume as shown by measurement and not by the reputed quart, pint or split method.  (2) The provisions of subsection (1) shall not apply to cordials and liqueurs  Us gallon x 0.83268 = U.K. gallon (pg 780 HS (pg. 783 2022 version)  Litres x 00219976 = U.K. gallon (pg 780 HS) What liquors may be classed as wine or malt. (48 (12)  12.-(1) No liquor containing more than forty-two (42%) per centum of proof spirit as verified by Sykes’ hydrometer, or as certified by the Government Analyst, shall be deemed wine, and no liquor containing more than twenty (20%) per centum of proof spirit as verified by Sykes’ hydrometer, or as certified by the Government Analyst, shall be deemed malt liquor.  (2) All liquor with the exception of medicinal spirits admitted as such by the Comptroller, containing more than forty-two (42%) per centum of proof spirit verified or certified as aforesaid and all liquor other than wine containing more than twenty (20%) per centum of proof spirit verified shall be deemed spirits.  What liquors may be classed as wine or malt. Chapter 48 (12)  (3) In any case where, by reason of the presence of colouring, sweetening, or other matter, the true strength of any liquor cannot be immediately ascertained by Syke’s hydrometer, a sample of such liquor may be distilled or treated by such other process as the Comptroller may direct, so that the true strength of the liquor may be ascertained by Sykes’ hydrometer. STRUCTURE OF THE HS  HARMONIZED SYSTEM- TARIFF & CLASSIFICATION  Comprises over 5,000 commodity groups, that appear as headings and subheadings  Organized into 21 sections  99 chapters of which only 96 is currently in use,  Chapter 77 is reserved for future international use only.  Chapters 98 and 99 are reserved for national use. - Chapter 98 comprises special classification provisions, and is currently being use only for personal and household effects. - 99- Reserved for special uses by Contracting Parties  the Chapters are broken down into headings  Heading into subheadings  HARMONIZED SYSTEM (HS)  each subheading is identified by a six code digit (HS CODE)  legally and logically structured  supported by well-defined rules to achieve uniform classification.  Accompanied with Legal notes, general rules of interpretation and explanatory notes.  List of rates  To determine tariff rate you must first be able to interpret the harmonized system of tariff nomenclature used to classify traded products  First, assigns goods to sections,  Assign these goods to their specific chapter heading  Assign goods to the subheading, in that order, as necessary.  HARMONIZED SYSTEM- TARIFF & CLASSIFICATION CODE  At the international level, six-digit code system.  The six digits can be broken down into three parts.  CHAPTER: (HS-2), The first two digits identify the CHAPTER the goods are classified in, e.g. 09 = Coffee, Tea, Maté and Spices.  HEADING : (HS-4), The next two digits identify groupings within that chapter,, e.g. 09.02 = Tea, whether or not flavoured.  SUBHEADING: (HS-6), The next two digits are even more specific, e.g. 09.02.10 Green tea (not fermented)...  Up to the HS-6 digit level, all countries classify products in the same way (a few exceptions exist where some countries apply old versions of the HS). HS Assigns up to a total of 8 digits at the tariff-rate (legal) level. Two extra digits may also be assigned as statistical reporting numbers for a total of 10 digits to be listed on entries.  TITLES OF THE SECTIONS  SECTION I: LIVE ANIMALS; ANIMAL PRODUCTS (Chapter 1-5)  SECTION II: VEGETABLE PRODUCTS (Chapters 6-14)  SECTION III: ANIMAL OR VEGETABLE FATS AND OILS AND THEIR CLEAVAGE PRODUCTS; PREPARED EDIBLE FATS; ANIMAL OR VEGETABLE WAXES (Chapter 15)  SECTION IV: PREPARED FOODSTUFFS; BEVERAGES, SPIRITS AND VINEGAR; TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES (Chapters 16-24)  SECTION V: MINERAL PRODUCTS (Chapters 25-27)  TITLES OF SECTIONS  SECTION VI: PRODUCTS OF THE CHEMICAL OR ALLIED INDUSTRIES (Chapters 28-38)  SECTION VII: PLASTICS AND ARTICLES THEREOF; RUBBER AND ARTICLES THEREOF (Chapters 39-40)  SECTION VIII: RAW HIDES AND SKINS, LEATHER, FURSKINS AND ARTICLES THEREOF; SADDLERY AND HARNESS; TRAVEL GOODS, HANDBAGS AND SIMILAR CONTAINERS; ARTICLES OF ANIMAL GUT (OTHER THAN SILK-WORM GUT) (Chapters 41-43)  SECTION IX: WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL; CORK AND ARTICLES OF CORK; MANUFACTURES OF STRAW, OF ESPARTO OR OF OTHER PLAITING MATERIALS; BASKETWARE AND WICKERWORK (Chapters 44-46)  TITLES OF SECTIONS  SECTION X: PULP OF WOOD OR OF OTHER FIBROUS CELLULOSIC MATERIAL; RECOVERED (WASTE AND SCRAP) PAPER OR PAPERBOARD;PAPER AND PAPERBOARD AND ARTICLES THEREOF (Chapters 47-49)  SECTION XI: TEXTILES AND TEXTILE ARTICLES (Chapters 50-63)  SECTION XII: FOOTWEAR, HEADGEAR, UMBRELLAS, SUN UMBRELLAS, WALKING-STICKS, SEAT-STICKS, WHIPS, RIDING-CROPS AND PARTS THEREOF; PREPARED FEATHERS AND ARTICLES MADE THEREWITH; ARTIFICIAL FLOWERS; ARTICLES OF HUMAN HAIR (Chapters 64-67)  SECTION XIII: ARTICLES OF STONE, PLASTER, CEMENT, ASBESTOS, MICA OR SIMILAR MATERIALS; CERAMIC PRODUCTS; GLASS AND GLASSWARE (Chapters 68-70)  TITLES OF SECTIONS  SECTION XIV: NATURAL OR CULTURED PEARLS, PRECIOUS OR SEMI-PRECIOUS STONES, PRECIOUS METALS, METALS CLAD WITH PRECIOUS METAL, AND ARTICLES THEREOF; IMITATION JEWELLERY; COIN (Chapters 71)  SECTION XV: BASE METALS AND ARTICLES OF BASE METAL (Chapters 72-83)  SECTION XVI: MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES (Chapters 84-85)  SECTION XVII: VEHICLES, AIRCRAFT, VESSELS AND ASSOCIATED TRANSPORT EQUIPMENT(Chapters 85-89)  TITLES OF SECTIONS  SECTION XVIII: OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, MEASURING, CHECKING, PRECISION, MEDICAL OR SURGICAL INSTRUMENTS AND APPARATUS; CLOCKS AND WATCHES; MUSICAL INSTRUMENTS; PARTS AND ACCESSORIES THEREOF (Chapters 90-92)  SECTION XIX: ARMS AND AMMUNITION; PARTS AND ACCESSORIES THEREOF (Chapters 93)  SECTION XX: MISCELLANEOUS MANUFACTURED ARTICLES (Chapters 94- 96)  SECTION XXI: WORKS OF ART, COLLECTORS' PIECES AND ANTIQUES (Chapters 99-99) BEES- SECTION I: LIVE ANIMALS; ANIMAL PRODUCTS MACHINERY- SECTION XVI: MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES SHOE: SECTION XII: FOOTWEAR, HEADGEAR, UMBRELLAS, SUN UMBRELLAS, WALKING- STICKS, SEAT-STICKS, WHIPS, RIDING-CROPS AND PARTS THEREOF; PREPARED FEATHERS AND ARTICLES MADE THEREWITH; ARTIFICIAL FLOWERS; ARTICLES OF HUMAN HAIR HS CHAPTERS  Using the HS Nomenclature 2022 edition, in what HS Chapter would you find the following and why?  a hat  Clock  Shoe  Live tree  School bag  Using the HS Nomenclature 2022 edition, in what HS Chapter would you find the following, state why?  a hat – Chapter 65: Headgear and parts thereof  Clock- Chapter 91 : Clocks and watches and parts thereof  Shoe- Chapter 64 : Footwear, gaiters and the like; parts of such articles  Live tree- Chapter 6 : Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage  School bag- Chapter 42 : ARTICLES OF LEATHER; SADDLERY AND HARNESS; TRAVEL GOODS, HANDBAGS AND SIMILAR CONTAINERS; ARTICLES OF ANIMAL GUT (OTHER THAN SILK-WORM GUT) KNOWLEDGE CHECK  Match the following: A. Heading 1. Subheading B. Chapters 2. First numerical breakdown C. Notes 3. Additional information D. More detailed level for a 4. First 4 digits heading 5. Provide ease to locate E. Sections items/products in the HS  GENERAL RULES OF CLASSIFICATION (GIR)  GENERAL RULES FOR THE INTERPRETATION (GIR) OF THE HARMONIZED SYSTEM  Provides the principles on which classification under the System is based  An integral part of the classification structure of the Schedule of Rates as are  the section,  Chapter and  Additional CARICOM notes  Explanatory Notes - THERE ARE SIX GENERAL RULES - THEY ARE AN INTEGRAL PART OF THE NOMENCLATURE - THE RULES SET OUT THE PRINCIPLES FOR CLASSIFICATION IN THE HS - THEY PROVIDE FOR UNIFORM APPLICATION OF THE NOMENCLATURE - THEY SHOULD BE APPLIED IN A HIERARCHICAL ORDER - THE FIRST FIVE RULES RELATE TO THE 4-DIGIT HEADINGS; - RULE 6 RELATES TO CLASSIFICATION IN THE 5- OR 6-DIGIT SUBHEADINGS GIR 1 GENERAL RULE- LEGAL AND NON LEGAL BASIS GIR IMPORTED CONDITION GIR 2 (a) INCOMPLETE OR UNFINISHED, UNASSEMBLED OR DISASSEMBLED GIR 2 (b) MIXTURES OR COMBINATIONS GIR 3 TWO OR MORE HEADINGS GIR 3 (a) MOST SPECIFIC DESCRIPTION GIR 3 (b) ESSENTIAL CHARACTER GIR 3 (c) LAST IN NUMERICAL ORDER GIR 4 MOST AKIN GIR 5 PACKAGING GIR 5 (a) SPECIAL CONTAINERS GIR 5 (b) PACKING MATERIALS & CONTAINERS GIR 6 SUBHEADING TEXTS, 5,6-DIGIT LEVEL  GENERAL RULES OF CLASSIFICATION (GIR) All existing products can be classified into the existing HS system by using the General Rules of Interpretation. The following information must be gathered first: 1. WHAT IS IT? 2. UNDER WHAT FORM IS IT IMPORTED? 3. WHAT MATERIAL OR SUBSTANCE IS IT MADE OF? 4. WHAT IS ITS FUNCTION OR USE? 5. IS IT THE ONLY POSSIBLE CLASSIFICATION? 6. WHAT IS IT PACKAGED IN? HOW GOODS ARE CLASSIFIED How goods are classified? Goods in the Harmonized System Nomenclature can be broken down into the following categories:  State  Function  Material makeup  Processed  UNDER WHAT FORM OR STATE IS IT IMPORTED Specific State: Chapter 8 – Edible fruits and nuts….. Chapter 1 – Live Animals; Meat Chapter 9 – Coffee, tea, mate and Chapter 2 – Meat and edible meat offal spices Chapter 3 – Fish and crustaceans…… Chapter 25-salt, Sulphur, earths and stone, plastering materials, lime and Chapter 4 – Dairy Produce…… cement Chapter 6 – Live trees and other Chapter 28-inorganic chemicals; … plants…. Chapter 29- organic chemicals Chapter 7 – Edible vegetables WHAT IS ITS FUNCTION OR USE Goods by function  Chapter 90, 94,95,96  Chapter 32 –  Chapter 34 –  Chapter 42 –  Chapter 84, 85,87, 88, 89, WHAT MATERIAL OR SUBSTANCE IS IT MADE OF Material makeup:  Chapter 39  Chapter 40  Chapter 48  Chapter 68  Chapter 70  Chapter 72, 73, 74, 75, 76, 78, 79  Chapter 80, 81,83, WHAT IS ITS USE Processed:  Chapter 16, 17, 18, 19, 20, 21, 22, 23,  Chapter 30  Chapter 68, 69  GENERAL RULES OF CLASSIFICATION (GIR) 1. WHAT IS IT? 2. UNDER WHAT FORM IS IT IMPORTED? 3. WHAT MATERIAL OR SUBSTANCE IS IT MADE OF? 4. WHAT IS ITS FUNCTION OR USE? 5. IS IT THE ONLY POSSIBLE CLASSIFICATION? 6. WHAT IS IT PACKAGED IN? Rule 1 : LEGAL AND NON LEGAL BASIS I- The TITLES of Sections, Chapters and sub-Chapters are provided for EASE OF REFERENCE ONLY - Not part of the legal texts, no legal force/bearing - Guideline- give a general indication of what type of goods or where a specific goods are likely located SECTION I LIVE ANIMALS; ANIMAL PRODUCTS  Chapters  1. Live animals.……………………………………………………………………………………… 01.01 Live horses, asses, mules and hinnies.  01.02 Live Bovine Animals  01.03 Live swine  01.04 Live sheep and goats  01.05 Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls.  01.06 Other live animals.  GENERAL RULES FOR THE INTERPRETATION OF THE HARMONIZED SYSTEM Classification of goods in the Nomenclature shall be governed by the following principles : RULE I The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions :  Rule1. COMPRISES OF 3 PARTS- (NON-LEGAL AND LEGAL BEARING) I. The TITLES of Sections, Chapters and sub-Chapters are provided for EASE OF REFERENCE ONLY (NON LEGAL) II. FOR LEGAL PURPOSES, I. classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes II. AND, PROVIDED such headings or Notes do not otherwise require, according to the following provisions:  RULE 1: PART I. I. The TITLES of Sections, Chapters and sub-Chapters are provided for EASE OF REFERENCE ONLY (NON LEGAL) I. TITLE? II. SECTION? III. CHAPTER? IV. SUBCHAPTER? V. EASE OF REFERENCE? VI. ONLY? Rule 1 Key Terms  TITLE  LEGAL NOTES-  SECTIONS  SECTION NOTES,  CHAPTERS  CHAPTER NOTES,  EASE OF REFERENCE  HEADING,  HEADINGS  SUB-HEADING NOTES,  TERMS OF HEADINGS  CARICOM NOTES  SUB HEADING  TERMS OF SUBHEADING  LIST OF TITLES OF SECTIONS AND CHAPTERS  SECTION I: LIVE ANIMALS; ANIMAL PRODUCTS  Section Notes  Chapters  1. Live animals.  2. Meat and edible meat offal  3. Fish and crustaceans, molluscs and other aquatic invertebrates  4. Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included  5. Products of animal origin, not elsewhere specified or included  II- FOR LEGAL PURPOSES, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes  LEGAL PURPOSE  HEADINGS  TERMS OF THE HEADINGS  RELATIVE  SECTION NOTES  CHAPTER NOTES  SECTION I-  LIVE ANIMALS; ANIMAL PRODUCTS (section title)  Notes.  1. Any reference in this Section to a particular genus or species of an animal, except where the context otherwise requires, includes a reference to the young of that genus or species.  2. Except where the context otherwise requires, throughout the Nomenclature any reference to "dried" products also covers products which have been dehydrated, evaporated or freeze-dried.  CHAPTER I - LIVE ANIMALS  Note.  1. This Chapter covers all live animals except:  (a) Fish and crustaceans, molluscs and other aquatic invertebrates, of heading 03.01, 03.06 or 03.07;  (b) Cultures of micro-organisms and other products of heading 30.02; and  Animals of heading 95.08.  Additional CARICOM Note.  For the purposes of Subheading 0102.21 and 0102.29, the term “cattle” refers only to bovine animals of the genus Bos which is divided into four sub-genera, i.e., Bos, Bibos, Novibos and Poephagus. They cover what may be regarded as the common farm cow and bull. In these subheadings, the terms cows and bulls include calves. These animals may be wild or domesticated. They are, however, usually domesticated or tamed and adapted to being under human control, and are generally provided with food and home by humans. III- AND PROVIDED such headings or Notes do not otherwise require, according to the following provisions:  Rule 2a. b  Rule 3a, b, c  Rule 4  Rule 5a, b  Rule 6  Rule 1 is ALWAYS APPLICABLE  Rule 2: IMPORTED CONDITION  GIR 2A Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. RULE 2-A (I) (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. - INCOMPLETE- VEHICLE WITHOUT ITS WHEELS OR ENGINE - UNFINISHED- BLANK KEY, PREPORM BOTTLE GIR 2A CONT. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. -UNASSEMBLED- BICYCLE, FANS - DISSASSEMBLED- PRE-FAB BUILDING  The Harmonized System 2018 THE GIR 2 BLANKS - Article, not ready for direct use - Having the approximate shape or outline of the finished article or part - Can only be used for completion into the finished article or part * Semi manufactures not yet having the essential shape of the finished articles (e.g., bars, discs, tubes, et) should not be considered as blanks.  The Harmonized System 2018 THE GIR 2 (a) For the purposes of this Rule, “articles presented unassembled or disassembled” means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved. No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to any further working operation for completion into the finished state. Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately 91  GIR- RULE 2 B:  Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. GIR 2B- II  Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance.  WOODEN/METAL CHAIR  METAL SPOON, MUG OR POT WITH RUBBER or wooden HANDLE  GIR 2b applies only in the absence of specific provisions in the Nomenclature covering mixed products- SUCH AS  2008 MIXED FRUIT OR NUTS,  3302-MIXTURES OF ODIFEROUS SUBSTANCES  The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.  The Harmonized System 2012 THE GIR 2 (b) Examples of application of GIR 2 (b) - Articles of cement reinforced with metal bars. - Articles of leaher with some intercalated plastic layers. - Plywood covered by a plastic layer. 95 Rule 3 : 2 OR MORE HEADINGS  THE GIR 3 (a): GENERAL V/S SPECIFIC DESCRIPTION -  RULE 3: 3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows : (a) The heading which provides the most SPECIFIC DESCRIPTION shall be preferred to headings providing a more GENERAL DESCRIPTION. USED WHEN 2 OR MORE HEADINGS APPLY, - SPECIFIC DESCRIPTION ? - SPEAKS OF THE EXACT CHARACTERISTICS OF A PRODUCT GENERAL DESCRIPTION? SPEAKS OF SOME ASPECTS OF THE ITEM EG- HAIR CUTTER- HAND TOOL -82 V/S TRIMMER- 8510 METAL SPOON? METAL-IRON OR STEEL -72/73 OR HOUSEHOLD /KITCHEN TOOL-82  MINT TEA- MINT (12/33)OR TEA- 09 GIR 3A(ii) CONT: mixed or composite goods or sets fro retail sale However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.  THE GIR 3 (b)- ESSENTIAL CHARACTER  RULE 3- B (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their ESSENTIAL CHARACTER, insofar as this criterion is applicable. EXAMPLE COMPOSITE- TV WITH DVD PLAYER, WASHER N DRYER, ALARM CLOCK With RADIO SETS FOR RETAIL SALE- LIQUOR GIFT SET- LIQUOR AND SHOT GLASS,  THE GIR 3 (b)- ESSENTIAL CHARACTER Essential character : 3 Possible situations MIXTURES -- WHEAT FLOUR (90%) AND GLUTEN (10%) DIFFERENT SUBSTANCES MATERIALS -- -------CONVEYOR BELT OF PLASTIC AND RUBBER DIFFERENT COMPONENTS --SPICE RACKS (WOODEN COMPOSITE GOODS FRAME AND GLASS JARS) GOODS PUT UP IN SETS FRO RETAIL SALE 104  The Harmonized System 2012 THE GIR 3 (b) Composite goods: Components are attached to each other to form a practically inseparable whole Layers of PVC intercalated with layers of plastics 105  The Harmonized System 2012 THE GIR 3 (b) Composite goods: Components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts. 106  The Harmonized System 2012 THE GIR 3 (b) A good consisting of a selection of spices, seeds, herbs, fruit, salt and seasonings, put up in hourglass- shaped glass bottles, in a wooden rack (Subheading 2103.90) Copyri ght© 2014 World 107 Bruxelles, 2014 Custo What is imparting the essential character? - NATURE OF THE MATERIAL OR COMPONENT  BULK  QUALITY  QUANTITY  WEIGHT  VALUE -ROLE IN RELATION TO USE OF THE GOODS THE GIR 3 (b): CONCEPT OF “SETS” IN THE HS 1. Must consist of at least 2 DIFFERENT ARTICLES which are classifiable in different headings. 2. Must consist of articles put up together to meet a PARTICULAR NEED or carry out a SPECIFIC ACTIVITY. 3. Must be put in a manner suitable for RETAIL SALE. CONCEPT OF SET: DIFFERENT ARTICLES  Must consist of at least 2 DIFFERENT ARTICLES which are classifiable in different headings.  IS THIS A SET? CONCEPT OF SETS: PARTICULAR NEED  Must consist of articles put up together to meet a PARTICULAR NEED or carry out a SPECIFIC ACTIVITY. CONCEPT OF SET: RETAIL SALE  Must be put in a manner suitable for RETAIL SALE  THE GIR 3 (b) Concept of “sets” in the HS : 30.06 - FIRST-AID KITS 61.03 - MEN’S SUITS 61.04 - WOMEN’S SUITS 63.08 - NEEDLECRAFT SETS 82.06 - HAND TOOL SETS 82.14 - MANICURE AND PEDICURE SETS 84.84 - GASKET SETS 90.17 - DRAWING SETS 96.05 - VARIOUS TRAVEL SETS (TOILET, SEWING, SHOE CLEANING, ETC.) Copyright© 2014 World Customs Organization. Bruxelles, 2014 113  THE GIR 3 (b) Concept of “sets” in the HS : “SPAGUETTI FOR DINNER FOR TWO”  PACKING OF NON COKKED SPAGETTI (19.02)  PACKING OF CHEESE (04.06)  BOX OF TOMATO (21.03)  PRESENTED FOR RETAIL SALE Copyri ght© 2014 World 114 Bruxelles, 2014 Custo RULE 3C- LAST IN NUMERICAL ORDER RULE 3-C  (c) When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. EXAMPLE: SETS FOR RETAIL SALE-  BRUSH & COMB SET  PEN AND PENCIL SET  SHAMPOO AND CONDITIONER SET RULE 4: MOST AKIN  GIR 4: Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin. - MOST AKIN- MOST ALIKE - NORMALLY FOR NEW PRODUCTS THIS IS THE RULE ONE WILL TURN TO WHEN THERE ISNT ANY OTHER RESORT.  DVD PLAYER,  THE GIR 4 Very rarely applied Only when goods cannot be classified in a heading, including a residual heading Classification according to kinship Copyright© 2014 World Customs Organization. Bruxelles, 2014 119  GIR 5 5. In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein : (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; GOLD INSTRUMENT CASE? COMPUTER BAGS?  THE GIR 5 (a) Containers to be classified with the articles for which they are intended are : (1)Specially shaped or fitted to contain a specific article or set or articles; (2) Suitable for long use term ; (3)Presented with the articles for which they are intended, whether or not the articles are packed separately for convenience of transport, and (4)Of a kind normally sold with such articles (5)does not, however, apply to containers which give the whole its essential character Copyri ght© 2014 World 122 Bruxelles, 2014 Custo  The Harmonized System 2012 THE GIR 5 (a) - Plastic soap boxes (heading 34.01) - Electric shaver cases (heading 85.10) - Binocular cases (heading 90.05) - Musical instrument cases (heading 92.02) - Gun cases (heading 93.03) Bruxelles, 2014 123  GIR 5B  (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.  However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use. Example:  GOODS PACKED IN PLASTIC CONTAINER RULE 6: SUB-HEADING CLASSIFICATION  GIR 6 For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, (WITH RESPECTIVE DIFFERENCES HAVING BEING CONSIDERED (WEBSTER, 2016) making necessary alterations while not affecting the main point at issue (oxford,2016) to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires  THE GIR 6 Directs that classification below heading level be determined in accordance with the application of all interpretation rules in an identical manner to that used at heading level (GIR 1) Copyright© 2014 World Customs Organization. Bruxelles, 2014 128  RULE 6  Classification at subheading level is based on the terms of the subheadings and related subheading notes  GIRs 1 to 5 can be used with the required changes, e.g. changing heading to subheading  Each level of subheadings is considered separately, that is, all the five digit subheadings that fall under the chosen heading are examined first, without consideration of any six digit subheadings  The Harmonized System 2012 THE GIR 6 Bottles of plastic are classified in subheading 39.23 by application of GIR 1 Bottles of plastic are classified in subheading 3923.30 by application of GIR 1,2a and 6 Copyright© 2014 World Customs Organization. Bruxelles, 2014 130  The Harmonized System 2012 THE GIR 6 We always compare subheading with the same number of dashes. Where would you classify black ink for drawing?? 131  The Harmonized System 2012 THE GIR 6 We always compare subheading with the same number of dashes. Where would you classify black ink for drawing?? 132  APPLICATION OF THE GIR 6 Can we classify Rhodium in heading 71.10? Yes  APPLICATION OF THE GIR 6 We classify Rhodium in powder subheading 7110.31 by GIRs 1 and 6 When Rule 6 is not needed  2817  3101  4112  8449.00.00.00  GIR 1 is the primary rule for classification.  On the face of it, it is quite simple. Just read the terms and any Notes to find the heading.  So we will look at how this might work in practice. Thank you!!!