Improving management efficiency in commodity classification

	Handling the case of Customs and enterprises disagreeing over the identification result
	Customs Assessment Department needs to implement right functions and duties
	Uniform classification of agricultural machines

Operational activities at the Thai Nguyen Customs Branch - Bac Ninh Customs Department. Photo:Thu Trang

As assessed by Mr. Luu Manh Tuong – Director of Import-Export Duty Department, now, the commodity classification process was approved on views on classification of different commodities between units before promulgating a notification on commodity classification results. Also thereby, forming MHS software system to save the analysis and classification results in Customs, helping enterprises to easily lookup commodity classification results to apply to the classification of their commodities because all classification results are posted on the website of the General Department of Vietnam Customs

For commodity classification only, the General Department of Customs issued more than 4,620 notifications on commodity classification results and solved more than 260 applications for HS code pre-determination in 2016. There were a lot of complicated commodities with many different opinions in classification such as: non-carbonated beverages, collagen drinks; scar cream; artemia - eggs as animal feed; Internet connected devices; ceiling mounted air conditioners; blade sharpening tools and marbles.

Along with that, the regulations on predetermination of HS code and origin of commodities were deployed to help enterprises actively calculate business profits, reduce the costs of compliance and increase management efficiency of Customs authorities. The Import-Export Tax Department will have handled within 30 days most received dossiers and within a maximum of 60 days for complex dossiers.

The implementation of the regulations on HS code predetermination benefits for both Customs and enterprises. The Customs authorities improved their management efficiency by accelerating Customs clearance and reasonably allocating resources in the stages before, during and after Customs clearance. Meanwhile, the business will base on the information provided with legal binding for market research, business planning and profitability calculations. This increases reliability and predictability for enterprises in international trade transactions.

Therefore, recently, the disputes between Customs and enterprises on HS code and preferential tax rates dropped significantly. In 2016, there were only 4 complaints which mainly focused on complicated and confusable commodities. Finally, enterprises declared the additional tax or re-imposed tax of 87.2 billion vnd for commodity classification only and paid over 57.5 billion vnd to the State budget.

To complet the amount of work above, the work of civil servants at the Import-Export Duty Department increased a lot, however, the positive feedback from enterprises which have been supported by the General Department of Customs on HS code predetermination showed that the commodity classification in general and HS code predetermination in particular were positive regulations and well supported to the import-export activities of enterprises

In 2017, further improving the efficiency of commodity classification, applying duty rates, ensuring the uniform of commodity classification across the country, detecting and handling on time the non-uniform cases in declaration, HS code and duty rates are targets which will be deployed by Customs.

According to Director of Import-Export Duty Department, Luu Manh Truong, to perform these targets, the Department will review the related information and data system to detect, prevent and handle on time the wrong performance on regulations on commodity classification and duty rates under the current tax list. And practically examining the commodity classification in some local Customs units.

Solving problems relating to the classification and duty rates of local Customs units and enterprises in a timely fashion as described. At the same time, proactively promoting specialized knowledge for civil servants to improve working efficiency and ensure commodity classification in accordance with the Law.

Along with that, coordinating with the Customs IT Department to implement, operate and exploit effectively the MHS system and collaborating to upgrade the MHS system eligible for newly issued documents and policies as well as actual exploitation and use. In parallel with that is reviewing and amending the list of import-export commodities with risk on classification.

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One of the key activities in the classification is building a Circular of the Ministry of Finance promulgating the list of Vietnam imports-exports (replacing Circular No. 103/2015/TT-BTC dated 1/7/2015). This is an important task in commodity classification for the List of Vietnam Import and Exports in line with the AHTN 2017 (ASEAN Harmonized Tariff Nomenclature), MFN tax list and FTA tax list, and lists of specialized management under the AHTN 2017 to ensure uniformity.