A suspicion that an enterprise made an incorrect declaration on HS code of imported car tires to evade tax

Source: Internet

Tax rate 0% or 25%

Company T. recently opened an import declaration at the Dinh Vu Port Customs Branch. The goods declared were four items: a set of rubber tires (including tyres, tubes, and bibs) used for tractors to pull semi-trailers of all kinds, brand new 100%, made in China, HS code 4011.90.10, with a special preferential import tax rate of 0%.

At the time of carrying out customs procedures, besides the prescribed set of dossiers, the enterprise must present two more copies of the catalog with the manufacturer's seal showing the four tire models declared in the declaration using for tractors. This enterprise did not provide information of the manufacturer's website address.

The declaration is classified in the Yellow Channel (inspect customs dossiers in detail).

Through examining the documents presented by the customs declarant, the customs branch found that there were not enough grounds to determine the goods codes and tax rates.

At the same time, the customs branch looked up information at the manufacturer's website. At that time, on the website, there was information about the goods models declared in the declaration of company T. However, the documents on the website showed that these models were classified in the group of truck tires, which were different from the declaration of the enterprise (declaration for road tractors).

On the basis of collecting and analyzing the above information, during the examination of dossiers, there is a suspicion that goods are not declared in terms of types, codes and tax rates, the customs branch conducted a physical inspection of the goods.

Through the inspection, the customs branch identified that the goods were correct in terms of product name, quantity, and tire code. However, based on the existing documents and the results of physical inspection of the goods, customs officer did not have enough grounds to determine the purpose of use, so they sent a request for an assessment conducted by Vinacontrol Group Joint Stock Company, Hai Phong branch.

According to the inspection certificate of Vinacontrol Group Joint Stock Company, Hai Phong branch, the specific goods are as follows: item one is an inflatable rubber tire with inner tubes used for cargo trucks, dump trucks running on gravel roads, mines; Items 2, 3, 4 are inflatable rubber tires with inner tubes used for trucks, semi-trailers, cargo trucks, and tanks.

Based on the above results and instructions in Official Dispatch 4389/TCHQ-TXNK dated September 13, 2021 of the General Department of Vietnam Customs, the customs branch determined that the items declared in the import declaration of Company T were tires with many uses, which can be used for cargo cars, appropriated with HS code 4011.20.10, and a preferential import tax rate of 25%.

Next, the customs branch carried out a directive on the electronic customs clearance system asking the company to make additional declarations following the result of the physical inspection.

According to the Department's assessment, company T. has violated acts of declaring wrong types, codes, and tax rates, leading to a lack of tax payable. The value of infringing goods is more than VND1 billion, the estimated tax amount that the enterprise must pay is nearly VND280 million.

Should based on the enterprise's dossiers and documents for carrying out cargo clearance or not?

However, as of December 1, 2021, T. Company did not make the additional declaration at the request of the Customs authority, because it did not agree with the opinion of the Dinh Vu port Customs Branch.

In the official dispatch sent to the Customs Branch and the working session with Dinh Vu port Customs Branch, this company stated the point of view: requesting the Customs Branch to only base on customs documents and technical documents presented by the enterprise for carrying out goods inspection and cargo clearance.

They protested to the Customs Branch to transfer to conduct physical inspection and request for an assessment to determine the actual goods for taking a basis for further settlement of procedures.

The representative of the business confirmed that the shipment was produced exclusively for the company, so the documents were sent by a separate e-mail, without using the manufacturer's website. At the same time, the enterprise presents the manufacturer's email sent to the company with the content confirming that the goods are only used for tractors, trailers, and semi-trailers.

However, the Customs Branch said that the declared items of company T. had been cleared by another enterprise with the declaration of the name of a set of car tires with code 4011.2010, and preferential import tax rate of 25%. On the other hand, the documents presented by the enterprise did not match the documents of the manufacturer that the Customs authorities looked up on the manufacturer's website.

In addition, the content of the manufacturer's e-mail was not a legal basis and there was not enough reliable basis. So it is suspected that the email address is not owned by the manufacturer.

Therefore, the Dinh Vu port Customs Branch said that the actual imported car tires of the enterprise had HS code 4011.20.10, with a preferential import tax rate of 25%.

However, company T. did not make the additional declaration because it did not agree with the inspection results of Vinacontrol Group Joint Stock Company, Hai Phong branch, nor did it solicit the re-inspection of the goods in accordance with the regulations and did not send an authorized representative to confirm the violations.

Pursuant to the provisions of the law, Dinh Vu port Customs Branch issued a decision on tax assessment, the tax amount to be collected is VND279 million; they made a record of violations in the absence of the customs declarant and transferred it to the competent unit to handle violations in accordance with the regulations.