Advance Ruling & Disputes Involving Tariff Classification PDF

TL DAY 03 ADVANCE RULING & DISPUTES INVOLVING TARIFF CLASSIFICATION By: CB Aldrin Alvarez, MBA ADVANCE RULING (Chapter 1 of Title XI, CMTA & TC Order 2017-01)  ADVANCE RULING ON TARIFF CLASSIFICATION - an official written decision issued by...

TL DAY 03 ADVANCE RULING & DISPUTES INVOLVING TARIFF CLASSIFICATION By: CB Aldrin Alvarez, MBA ADVANCE RULING (Chapter 1 of Title XI, CMTA & TC Order 2017-01)  ADVANCE RULING ON TARIFF CLASSIFICATION - an official written decision issued by the Commission which provides the Applicant with the appropriate tariff classification of goods under the AHTN prior to an importation or exportation.  SECTION 1100: Classification Ruling Application: An importer or exporter may file a written application for an advance ruling on the tariff classification of goods with the Tariff Commission. Ruling Timeframe: The Tariff Commission shall render a ruling within thirty (30) days from receipt of a properly documented application.  SECTION 1100: Classification Ruling Disputes: When a declared tariff classification of goods, not subject of a pending application for advance ruling, is in dispute, the importer, exporter, or the Bureau shall submit the matter to the Commission for a ruling. Binding Nature: The rulings of the Tariff Commission on commodity classification shall be binding upon the Bureau, unless the Secretary of Finance shall rule otherwise.  SECTION 1103: Conditions for Application and Effect of Advance Ruling Single Product Rule: An application for an advance ruling shall cover only one (1) product or item. Filing Deadline: The application for advance ruling shall be filed at least ninety (90) days before the importation or exportation of the product or item, as the case may be. Office or Division: Commodities Studies Division (CSD) Classification: Stage 1: Simple (assessment of application) Stage 2: Complex (pre-classification evaluation) Stage 3: Highly Technical (preparation and issuance of advance ruling) Type of Transaction: G2C – Government to Citizen G2B – Government to Businesses G2G – Government to Government Who may avail: An importer or exporter  CHECKLIST OF REQUIREMENTS WHERE TO SECURE TC Form 1 (2 copies, 1 original and 1 photocopy) TC Public Assistance Officer or TC Website Technical catalogue/brochure (2 copies, original Manufacturer of the good or photocopy) Duly certified complete product composition and Manufacturer of the good and/or third-party use (2 copies, original or photocopy) laboratory Picture of product (2 copies, original or Manufacturer of the good photocopy) and actual sample Technical specifications (2 copies, original or Manufacturer of the good photocopy) Manufacturing process (2 copies, original or Manufacturer of the good photocopy) Authorization letter for the representative of Applicant importer/exporter importer/exporter (2 copies, 1 original and 1 photocopy, with signatures and government- issued IDs of importer/exporter and authorized representative)  Filing Fee A Filing Fee of Five Hundred Pesos (P500.00) and Legal Research Fund Fee of Ten Pesos (P10.00) is collected for every application for advance ruling.  Administrative Provisions (TC order 2017-01) Who May Apply: An Applicant or his/her Authorized Representative may apply for an Advance Ruling. Condition: An application for an Advance Ruling shall cover only one product or good, as determined by the Commission. Filing Period: Applications for an Advance Ruling should be filed at least ninety (90) days before the date of the importation or exportation.  Administrative Provisions (TC order 2017-01) Filing Procedure: Applicants shall submit three (3) copies of the filled-out application form prescribed by the Commission together with supporting documents and samples of the good, if required. The Commission shall assess the sufficiency of the filled-out form and its supporting documents before payment of appropriate fees and assignment of a unique application reference number.  Administrative Provisions (TC order 2017-01) Grounds for Non-acceptance of Application An application for an Advance Ruling may not be accepted in any of the following cases: a) the application is not in the prescribed application form; b) it is not possible to determine tariff classification based on the presented information/documents; c) the request pertains to multiple goods under different subheadings as ascertained by the Commission; d) the application is filed less than ninety (90) days before importation or exportation; or, e) non-payment of filing fee.  Administrative Provisions (TC order 2017-01) Grounds for Non-issuance of Ruling The Commission may not issue an Advance Ruling in any of the following cases: a) when the Applicant fails to provide any additional information requested within the reasonable period required by the Commission, without prejudice to the filing of a new application; b) the goods involved are subject of a pending court litigation or of an administrative review or of an appeal involving tariff classification; c) the Applicant did not allow the Commission to conduct on- site verification; d) misrepresentation; or e) other similar cases.  Administrative Provisions (TC order 2017-01) Validity of an Advance Ruling on Tariff Classification The Advance Ruling shall be valid for a period of five (5) years from the date of its issuance unless it is earlier revoked or modified due to changes in facts or circumstances on which the Advance Ruling is based.  Motion for Reconsideration The Applicant in an Advance Ruling may file a motion for reconsideration with the Commission, in writing, within ten (10) days from receipt thereof, on the ground of mistake of fact and excusable negligence or newly discovered evidence or information not discovered during the application that if presented may alter the result of the Advance Ruling. The Commission shall resolve the Applicant's motion within ten (10) days from receipt thereof. Only one (1) motion for reconsideration is allowed.  Appeal An appeal may be filed by the Applicant before the Court of Tax Appeals within thirty (30) days from receipt of the decision of the Commission denying its motion for reconsideration, or of the decision of the Secretary of Finance, as the case may be. DISPUTES INVOLVING TARIFF CLASSIFICATION (Chapter 1 of Title XI, CMTA & TC Order 2018-01)  Tariff Classification - refers to the act or process of determining the subheading in the AHTN to which goods appropriately belong in accordance with Sections 1610 and 1611 of the CMTA.  Tariff Classification Dispute - refers to a situation or case when a declared tariff classification of goods, not subject of a pending application for advance ruling, is in dispute because the BOC has a different classification or the tariff.  Tariff Classification Dispute Ruling - an official written decision issued by the Commission on the disputed tariff classification which provides the importer, exporter or the BOC with the appropriate classification of goods under the AHTN during importation or exportation.  Initiation of Tariff Classification Dispute A dispute on tariff classification, not subject of a pending application for advance ruling, can be initiated through the following: a) endorsement from BOC in the case of difficult or highly technical questions on tariff classification, as determined by BOC; or b) filing of case by the importer or exporter when BOC has a different tariff classification.  Initiation of Tariff Classification Dispute In either case, the importer or exporter or the BOC shall submit the following documentary requirements: 1. letter-endorsement, or ruling or assessment reflecting the tariff classification made by the BOC; 2. filled-out form prescribed by the Commission (for importer or exporter only); 3. product description, brochures, technical specifications; 4. pictures of products and/or samples, as may be appropriate; 5. BOC SAD; and 6. affidavit or certification under oath that the goods are not subject of a pending application for advance ruling (for importer or exporter only). Office or Division: Commodities Studies Division (CSD) Classification: Stage 1: Simple (assessment of application) Stage 2: Complex (pre-classification evaluation) Stage 3: Highly Technical (preparation and issuance of dispute ruling) Type of Transaction: G2C – Government to Citizen G2B – Government to Businesses G2G – Government to Government Who may avail: An importer, exporter, or the Bureau of Customs (BOC) CHECKLIST OF REQUIREMENTS WHERE TO SECURE TC Form 2 (2 copies, original and signed) TC Public Assistance Officer or TC Website Letter-endorsement/ ruling/ assessment from BOC BOC (2 copies, original or photocopy) Affidavit or certification under oath that the goods Applicant are not subject of a pending application for advance ruling (2 copies: 1 original and signed, 1 photocopy) Copy of BOC Single Administrative Document (SAD) BOC (2 copies, original or photocopy) Technical catalogue/brochure (2 copies, original or Manufacturer of the good photocopy) Duly certified complete product composition and Manufacturer of the good and/or third- use (2 copies, original or photocopy) party laboratory Picture of product (2 copies, original or photocopy) Manufacturer of the good and actual sample Technical specifications (2 copies, original or Manufacturer of the good photocopy) Manufacturing process (2 copies, original or Manufacturer of the good photocopy) Authorization letter for the representative of Applicant importer/exporter importer/exporter (2 copies, 1 original and 1 photocopy, with signatures and government-issued IDs of importer/exporter and authorized representative)  Fees Pursuant to the Commission's relevant Administrative Orders, the importer or exporter, upon filing of the case, shall pay the following: a) filing fee; b) Legal Research Fund fee; and c) other fees, as may be prescribed by the Commission. Failure to pay the fees shall cause the non-acceptance of the case.  Filing Fee A Filing Fee of One Thousand Pesos (P1,000.00) and Legal Research Fund Fee of Ten Pesos (P10.00) is collected for every application for tariff classification dispute ruling.  Evaluation of Cases Endorsed by BOC Within seven (7) working days from receipt of the case, the Commission shall notify the importer or exporter and, if it deems appropriate, require him/her to submit additional information and/or allow on-site verification to determine the proper tariff classification of the subject goods. Within ten (10) working days from receipt of notice, the importer or exporter shall submit additional information and/or allow on-site verification.  Evaluation of Cases Filed by an Importer or Exporter Within seven (7) working days from receipt of the case, the Commission shall, if it deems appropriate, require the importer or exporter to submit additional information and/or allow on-site verification to determine the proper tariff classification of the subject goods. Within ten (10) working days from receipt of notice, the importer or exporter shall submit additional information and/or allow on-site verification.  Evaluation of Cases Filed by an Importer or Exporter Within five (5) working days from receipt of the case, or receipt of additional information, or conduct of on-site verification, the Commission shall notify the BOC that a tariff classification dispute is filed before it and request comments. Within ten (10) working days from receipt of the notice and the records of the case, the BOC may file a comment or submit any additional explanation or documents to justify its findings.  Conduct of Hearing The Commission, if it deems necessary, shall conduct a hearing to clarify facts necessary to resolve the pending dispute on tariff classification. The Commission shall accordingly notify the Parties of the time and date of the scheduled hearing. The hearing shall be summary and fact-finding in nature and shall be presided by a hearing officer designated by the Commission.  Issuance of Tariff Classification Dispute Ruling Within twenty (20) working days from receipt of all required information or documents or the termination of the hearing, the Commission shall issue the appropriate ruling on the dispute furnishing the importer or exporter, BOC, and the Secretary of Finance their respective copy thereof. Depending on the complexity of the case, said period may be extended for another twenty (20) working days upon prior notice to the importer/exporter and BOC. Pursuant to Paragraph 2, Section 1100 of the CMTA, tariff classification rulings of the Commission shall be binding upon the BOC, unless the Secretary shall rule otherwise.  Grounds for Dismissal for Cases Filed by an Importer or Exporter The Commission may dismiss cases in any of the following circumstances: a) when the importer or exporter fails to provide any additional information requested within the reasonable period required by the Commission; b) the importer or exporter did not allow the Commission to conduct on- site verification; c) misrepresentation; or d) non-compliance with these Rules or any Order of the Commission.  Motion for Reconsideration The importer or exporter aggrieved by the ruling of the Commission may file a motion for reconsideration within fifteen (15) days from receipt of the ruling on the ground of mistake of fact and excusable negligence or newly discovered evidence or information not discovered during the proceedings that if presented may alter the result of the Dispute Ruling. Only one (1) motion for reconsideration is allowed.  Appeal Within fifteen (15) days from receipt of the Order denying the motion for reconsideration, an appeal may be filed by the importer/exporter before the Secretary of Finance.  Finality of the Ruling Unless a motion for reconsideration or an appeal is made in the manner and period prescribed herein, the ruling of the Commission shall be final and executory. In accordance with Section 1100 of the CMTA, rulings of the Commission on commodity classification shall be binding upon the Bureau, unless the Secretary of Finance shall rule otherwise. THANK YOU!