HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION

(20 November 2013)

TOPICS OUTLINE
REPUBLIC OF THE PHILIPPINES
TA R I F F C O M M I S S I O N I. HS/AHTN Background
a. The HS
b. The AHTN
SEMINAR ON c. The TCCP-AHTN
CLASSIFICATION, GIRs II. CLASSIFICATION TECHNIQUES
a. How to Classify
and IMPORT DUTY b. Role of Punctuation Marks in the HS
c. HS/AHTN Structure and Numbering
DETERMINATION System
d. Dash System
(20 NOVEMBER 2013) e. “Other” Description
III. GENERAL INTERPRETATIVE RULES
ENG’R ARTEMIO D. BERNARDINO a. GIRs 1 to 6
DIRECTOR, TARIFF COMMISSION IV. IMPORT DUTY DETERMINATION
1 2

What is the
Harmonized Commodity Description and Coding System?

The Harmonized Commodity Description and

I. (a) Coding System or simply Harmonized System
THE (HS) is an internationally standardized system of
names (description) and numbers (codes) for
HARMONIZED COMMODITY classifying traded goods.
DESCRIPTION AND The HS is a product nomenclature where each
CODING SYSTEM (HS) product is assigned its corresponding “6-digit”
code. The first four digits are referred to as the
heading. While the code up to the sixth digit is
known as a subheading.
3 4

What is the What is the

Harmonized Commodity Description and Coding System? International Convention on the Harmonized System?

It was developed to facilitate international

It was developed and presently maintained
trade by establishing a uniform system for
by the World Customs Organization (WCO)
the collection, comparison and analysis of
(formerly known as the Customs Co-
international trade statistics.
operation Council (CCC)) headquartered
in Brussels, Belgium. It was established in 1983 and entered into
force in 1988.
The HS nomenclature is annexed to the
International Convention on the Under this Convention, contracting parties
Harmonized Commodity Description and are obligated to base their tariff schedules
Coding System. on the HS nomenclature, although parties
5 set their own rates of duty. 6

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What is the
International Convention on the Harmonized System?
Individual countries may extend a Harmonized
System code to eight or ten digits for customs
Countries that have adopted the purposes.
Harmonized System are not permitted to More than 200 countries, customs and economic
alter in any way the descriptions unions, representing more than 98% of world
associated to a heading or a subheading trade use the HS.
nor can the numerical codes at the four or Primary uses of the Harmonized System:
six digit levels be altered. This is what  Determination of customs tariffs (import duty)
keeps the Harmonized System harmonized.  Collection of international trade statistics
 Rules of origin
The Philippines began implementing the
 Ascertain eligibility of a product under a Free Trade
harmonized tariff coding system back in Agreement
1989 - the 104th country to do so. 7  Compliance with customs requirements 8

What is the Composition of the Harmonized System?

General Interpretative Rules (GIRs)
- Rules providing the principles of classification of goods
under the HS
- There are 6 rules
Sections
- The HS is primarily divided into 21 Sections I. (b)
Chapters
- Sections are divided into Chapters THE ASEAN HARMONIZED
- There are 99 Chapters under the HS
- However, Chapter 77 is reserved for future use, while TARIFF NOMENCLATURE
Chapters 98 & 99 are reserved for special uses by contracting
parties to the HS Convention (AHTN)
Headings
- Chapters are divided into headings
- Headings are assigned with four-digit codes
Subheadings
- Headings are further divided into subheadings
9 10
- HS subheadings are assigned with six-digit codes

What is the ASEAN Harmonized Tariff Nomenclature (AHTN)? What is the ASEAN Harmonized Tariff Nomenclature (AHTN)?

The Association of Southeast Asian The AHTN is based on the Harmonized

Nations (ASEAN) comprising of Brunei, System up to the 6-digit subheadings. It is
Cambodia, Indonesia, Laos, Malaysia, supplemented with the national
Myanmar, Philippines, Singapore, Thailand requirements of each of the 10 ASEAN
and Vietnam, agreed to adopt a common member countries in the form of 8-digit
tariff nomenclature to facilitate the flow of subheadings.
trade within the region.
Any amendments on the Harmonized
The AHTN is the harmonization of each System would also be reflected on the
ASEAN member country’s customs AHTN.
nomenclature.
11 12

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DIRECTOR, PHILIPPINE TARIFF COMMISSION
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(20 November 2013)

What is the TCCP Volume I?

In 1957, Congress enacted R.A. 1937, otherwise known as
the Tariff and Customs Code of the Philippines.
The TCCP Volume I is a nomenclature consisting of customs
I. (c) laws and mostly of description of commodities and their
corresponding import duty rates.
THE TARIFF AND CUSTOMS CODE It is used in the tariff classification of imported commodities.
OF THE PHILS. It is the AHTN (up to the 8-digit subheadings) further
(TCCP) supplemented with our national requirements in the form of
alphanumeric subheadings.
Volume I It is now known as the TCCP-AHTN Volume I and the latest
import duty rates are under Executive Order No. 61 s. 2011
reflecting MFN rates from 2011 up to 2015.
The TCCP-AHTN Volume I is currently maintained and
13 14
updated by the Tariff Commission.

What is the Composition of the AHTN-TCCP 2013 Edition? AHTN - TCCP

(2013 Edition)
HS with 2012 Amendments
(GIRS, Sections, Chapters, GENERAL SUPPLEMENTARY 21 SECTIONS
HS INTERPRETATIVE EXPLANATORY (I to XXI)
4-digit headings Nomenclature RULES (GIRs) NOTES (SEN)
and 6-digit subheadings)
Rules 1 to 6
99* CHAPTERS
(96 are in use)
ASEAN Subheadings AHTN Rules 1 to 5: Rule 6:
(8-digit ASEAN subheadings) Governs Governs
classification classification
in the 4-digit in the 6-digit 4-digit
or heading or subheading Headings
Philippine National Subheadings TCCP-AHTN level. level.
(Alphanumeric subheadings: Vol I, * Chapters 77, 98,
Philippine requirement) 6-digit 8-digit Alphanumeric
2013 edition and 99 are not
HS Subheadings AHTN Subheadings National Subheadings
MFN and ATIGA Rates used.
15 16

SECTION
TITLE

AVAILABLE AT THE SECTION

NOTE
TARIFF COMMISSION

5th Floor Phil. Heart Center Bldg., CHAPTER

East Ave., Diliman, Q.C. TITLE

CHAPTER
Selling Price : P 900.00 NOTES
Student Discounted Price : P 800.00
(For BSCA students. Bring School ID
and registration of enrollment) SUBHDG.
NOTES
Check Availability:
Contact 925-2401 loc. 3511
17 18

ENG’R ART D. BERNARDINO ( Page 3 of 20 )

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HEADING RATES OF DUTY Specifies which ASEAN Member States are

NO. HEADING (Tariff/Import Duty Eligible to Enjoy the Preferential ATIGA Rate of Duty
DESCRIPTION For MFN and ATIGA)
(4-Digits)
(Terms of the Heading)

SUBHDG. SUBHDG.
NO. (6-Digits) DESC.
(Terms of the SubHdg.)

SUBHDG.
NOS.
(8-Digits)
ALPHA-
NUMERIC
SUBHDGS.

NOTE: Effective 01 Jan 2010, “CEPT rates” under Column (6) is now referred19to 20
as “ATIGA Rates”.

HOW TO CLASSIFY
I. Identification of the goods – get the full
and accurate description.

II. Basic Questions to Ask in Determining the

Identity of Goods:
CLASSIFICATION 1. What is it?
2. What is the substance or material
TECHNIQUES composition?
3. What is its function or use?
4. Under what form is it imported?
21
5. Is it the only possible classification? 22

HOW TO CLASSIFY HOW TO CLASSIFY

II. Familiarization of the Tariff Nomenclature. III. Take note that Chapters are generally arranged
according to the degree of processing.
1. Table of Contents (Titles of Sections and Chapters);
Example 1:
2. Chapters are grouped under 21 Sections:
Chapter 01 - Live animals
Section I (live animals) to Section XXI (works of art
and antiques); Chapter 41 - Raw hides and
skins and leather
3. Section Notes, Chapter Notes, Subheading Notes;
Chapter 64 - Footwear
4. Description of Headings and Subheadings, and
TARIFF RATES:

 Coding System utilized in the AHTN

 Dash system 23 24

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Example 2: HOW TO CLASSIFY

Chapter 06 - Live trees IV. Headings of some Chapters are likewise
Chapter 44 - Wood and articles arranged according to the degree of
of wood processing.
Chapter 47 - Pulp of wood Example 1:

Chapter 48 - Paper and paperboard Heading 72.01 Pig Iron

Heading 72.07 Billets
Chapter 49 - Printed books,
Heading 72.13 Wire Rods
newspapers
Heading 72.17 G.I. Wire

25 26

HOW TO CLASSIFY
Example 2:
V. Read the Section Notes, Chapter Notes and
Heading 52.01 Cotton… Subheading Notes. The Notes can be:
Heading 52.05 Cotton yarn… 1. Inclusion/coverage – enumerates goods that
Heading 52.08 Woven fabric are included.
of cotton… Example 1:
Note 2 to Chapter 60 (Knitted
or crocheted fabrics) - “This
Chapter also includes fabrics
made of metal thread and of a
kind used in apparel, as
furnishing fabrics or for
27 similar purposes”. 28

Inclusion/coverage – enumerates goods that

are included.
2. Exclusion – enumerates goods that
are excluded.
Example 2:
Example:
Note 1 to Section I (LIVE ANIMALS; ANIMAL
PRODUCTS) states that “Any reference in this Chapter 64 covers “footwear”
Section to a particular genus or species of an
animal, except where the context otherwise However, Note 1 (c) to
requires, includes a reference to the young of that
genus or species.” Chapter 64 states that “This
Chapter does not cover
worn footwear of heading
63.09 (Worn clothing and
other worn articles).”
29 30

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3. Definition – Provides a description for a particular HOW TO CLASSIFY

good covered by the Section, Chapter, or
Subheading VI. Examine the HEADINGS and
Example : Subheading Note 1 to Chapter 88 (Aircraft, SUBHEADINGS, Including Dashes.
spacecraft, and parts thereof) – “For the
purposes of subheadings 8802.11 to 8802.40, VII. Go back to the identification if still in doubt.
the expression “unladen weight” means the
weight of the machine in normal flying order,
excluding the weight of the crew and of fuel and
equipment other than permanently fitted items
IDENTIFY CLASSIFY
of equipment.”

VIII. Classify according to the Rules of

Classification - GIRs.
31 32

Steps to follow in choosing the most

appropriate tariff classification:
1. Choose the Section and Chapter.
2. Compare all possible Headings while reading
pertinent Legal Notes (i.e., Section/Chapter Notes) Role of Punctuations
to determine possible headings that can be
considered. within the Text of HS
3. Use the GIRs (Rules 1 - 5) to determine the
appropriate heading classification. Necessary Tools for the
4. Compare all possible subheadings under the Correct Interpretation of the HS
chosen heading by the dash-level of subdivisions,
while reading pertinent Legal Notes (i.e.,
Subheading Notes).
5. Finally, use GIR Rule 6 to determine the applicable
33 34
subheading classification.

Punctuations Roles of Punctuations within the

texts of the AHTN

1. COMMA 1. Comma (,)

 Used to separate items or list of

2. SEMI-COLON goods described in the heading and
subheading texts.

3. COLON  Used to separate the list of items from

the descriptor phrase or from a series
of descriptors to which the items
4. PERIOD belong.
35 36

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Roles of Punctuations within the Roles of Punctuations within the

texts of the AHTN texts of the AHTN

2. Semi-Colon (;) 3. Colon (:)

 It is used to indicate a full-stop and  It is used to indicate that further

that a good or list of goods separated subdivisions will occur.
by semi-colons must be treated as
distinct and separate from each other  The colons appear after the end of
when considering tariff classification every subheading text which has
at the heading or subheading level. further breakdowns.
37 38

Roles of Punctuations within the Commas (,)

texts of the AHTN
Commas are used to separate items in
a list.
4. Period (.)
Example:
It is used to indicate a full stop in the
heading text which means only those 84.29 Self-propelled bulldozers,
products mentioned are included and angledozers, graders, levellers,
nothing more. scrapers, mechanical shovels,
excavators, shovel loaders,
tamping machines and road
39
rollers. 40

Commas (,) Semi Colons (;)

Commas are also used to separate Indicate a full stop; separate items within
descriptors in a heading/subheading text. the descriptive text into independent
Example: units.
72.21 Bars and rods, hot-rolled, in Example:
irregularly wound coils, of stainless
steel.
83.06 Bells, gongs and the like, non-
Descriptor is an element or term that serves to electric, of base metal; statuettes
describe, identify, or index something. and other ornaments, of base
The description of the heading states that the “bars metal; photograph, picture or
and rods” classified under the heading should be similar frames, of base metal;
“hot-rolled”, imported in “irregularly wound coils”, mirrors of base metal.
AND made “of stainless steel.” 41 42

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Colons (:) Period (.)

Indicate that a list is to follow and that
Indicates the end of the text.
further subdivisions will occur.
Example: Example:
01.04 Live sheep and goats.
42.03 Articles of apparel and clothing
0104.10 - Sheep:
0104.10.10 - - Pure-bred breeding animals
accessories, of leather or of
0104.10.90 - - Other composition leather.
0104.20 - Goats:
(The period indicates the end of the
0104.20.10 - - Pure-bred breeding animals
descriptive text of the heading. Only those
0104.20.90 - - Other:
article described therein can be classified
0104.20.90A - - - In-Quota
43
under the term of that heading.) 44
0104.20.90B - - - Out-Quota

CHAPTER NUMBERS
 The numbers/codes are laid down in an
ascending manner. (e.g., hdg. 01.01 then 01.02,
then 01.03, and so on)
 The first Chapter is designated by a 2-digit
STRUCTURE AND number, e.g., “01” (Chapter 1 - “Live animals”),
the second Chapter (Chapter 2 - “Meat and
NUMBERING SYSTEM edible meat offal”) is 02,
the third (Chapter 3 - “Fish and crustaceans,
molluscs and other aquatic invertebrates”) is
03,
the tenth Chapter (Chapter 10 - “Cereals”) is 10
45 and so on and so forth. 46

HEADING NUMBERS SUBHEADING NUMBERS

 The numbering/coding pattern is followed in the headings  Subheadings in the Harmonized System (HS) are up
and, if there are any, in subheadings. to 6-digits;
Example: Chapter 10 (Cereals)  Subheadings in the AHTN are up to 8-digits;
10.01 Wheat and meslin.
10.02 Rye.  HS subheadings in the AHTN that are not further
10.03 Barley. divided are assigned “.00” after the 6th digit (example:
10.04 Oats. “1002.10.00”);
10.05 Maize (corn).
10.06 Rice.  Similarly, headings in the AHTN with no subheadings
10.07 Grain sorghum. are assigned “.00.00” after the 4th digit (example:
10.08 Buckwheat, millet and canary seed; other cereals.
“0205.00.00”); and
 The first heading is assigned with the numbers “10.01”,
the second with “10.02”, then “10.03” and the last  To incorporate tariff requirements unique to the
“10.08”. Philippines, alphanumeric subheadings are created
 In a heading code, notice that a dot is added after the and incorporated in the TCCP-AHTN (example:
second digit of the chapter number.
47
“8413.91.90A”, “0301.99.21B”). 48

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COMPONENTS OF THE SUBHEADING NUMBERS

CODING / NUMBERING SYSTEM Description with no subheadings???
0 1 0 4.2 0 .9 0A Hdg. AHTN Code
Description
No. 2012

01.02 Live bovine animals.

- Cattle:
Alphanumeric Subheading 0102.21.00 - - Pure-bred breeding animals
0102.29 - - Other:
AHTN Subheading (up to the 8-digit) 0102.29.10 - - - Male cattle (including oxen)
0102.29.90 - - - Other
Subheading (up to the 6-digit)
- Bufallo:
[one-dash when ending with a 0102.31.00 - - Pure-bred breeding animals
zero, else two-dashes] 0102.39.00 - - Other
Heading Number (4-digit) 0102.90 - Other:
0102.90.10 - - Pure-bred breeding animals
49 50
Chapter Number 0102.90.90 - - Other

EXERCISES
Fill in the blanks: Provide the correct AHTN Codes.
96.19 Sanitary towels (pads) and tampons,
napkins and napkin liners for babies
and similar articles, of any material.
- Disposable articles:
9619.00.11 - - With an absorbent core of

_________
wadding of textile materials
- - Other:
DASH SYSTEM
_________ - - - Of paper pulp, paper, cellulose
wadding or webs of cellulose
fibres
Philippine requirement
_________ - - - Other
- Other:
9619.00.91 - - Knitted or corcheted
_________ - - Other 51 52

DASH SYSTEM DASH SYSTEM

Hdg. AHTN Code Description
 In the Harmonized System (HS), when a Heading No. 2012
is divided into two or more 6-digit subheadings, 20.02 Tomatoes prepared or
a single dash appears before the description of Primary
preserved otherwise than by
products to indicate the first level of divisions. vinegar or acetic acid.
(one-dash)
subhdgs. 2002.10 - Tomatoes, whole or in
 And when necessary, subheadings are broken
pieces:
down into two or more 2-dash subheadings to 2002.10.10 - - Cooked otherwise than by
indicate the second level of subdivisions. steaming or boiling in
water
 Dashes are laid down in an increasing manner. 2nd level
2002.10.90 - - Other
(two-dash)
A one-dash is followed by two dashes, two 2nd level 2002.90 - Other:
(two-dash) subhdgs.
dashes by three dashes, three dashes by four 2002.90.10 - - Tomato paste
of 2002.10
dashes, and so on. subhdgs. 2002.90.20 - - Tomato powder
53 of 2002.90 2002.90.90 - - Other 54

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DASH SYSTEM EXERCISE

PRINCIPLES: Provide the dashes for every subheading
When classifying goods, compare only subheadings 28.11 Other inorganic acids and other inorganic
at the same level: oxygen compounds of non- metals.
1) Only compare one-dash subheadings that are under Other inorganic acids:
2811.11.00 Hydrogen fluoride (hydrofluoric acid)
the same heading. Choose the one-dash 2811.19 Other:
subheading that fits the description of the goods 2811.19.10 Arsenic acid
being classified; 2811.19.90 Other
2) If the established one-dash subheading is further Other inorganic oxygen compounds of
divided, compare all two-dash subheadings that are non-metals:
under that one-dash subheading and choose the 2811.21.00 Carbon dioxide
2811.22 Silicon dioxide:
two-dash subheading that fits the description of the 2811.22.10 Silica powder
goods being classified; and, if applicable, 2811.22.90 Other
3) Compare all three-dash subheadings under the 2811.29 Other:
established two-dashed and determine the correct55 2811.29.10 Diarsenic pentaoxide
56
three-dash subheading classification, and so on… 2811.29.20 Sulfur dioxide

OTHER
 “Other” is the most recurring description
found in almost all HS headings.

 “Other”, provides for a more general, widely-

scoped, and sometimes vague coverage.
OTHER  When headings are further divided into
subheadings, two major groups are generally
created:

1. Subheading/s with specific description

2. Subheading/s with the description “Other”
57 58

OTHER OTHER

Steps in describing Other:

Describing the coverage of “Other” is
just like answering a puzzle since it is 1. Read the terms of the heading, i.e., the
sometimes difficult and tricky. articles mentioned under the 4-digit
heading.

Extra care should be taken into 2. Take note of the dash level of subheadings.
consideration in describing the 3. “Other” covers articles not provided by
coverage of “Other” especially when subheadings under the same dash level
there are too many subheadings taking into consideration the description of
involve. the preceding subheading with a lower
59 dash count. 60

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OTHER OTHER
Example 1: Determine the complete coverage of Example # 2: Give the complete description of
subheadings 0101.29.00 and 0101.90.00 subheading 8904.00.39
Hdg. AHTN Code Hdg. AHTN Code
DESCRIPTION DESCRIPTION
No. 2012 No. 2012
01.01 Live horses, asses, mules and 89.04 Tugs and pusher craft.
hinnies. 8904.00.10 - Of a gross tonnage not
- Horses: exceeding 26
0101.21.00 - - Pure-bred breeding animals - Of gross tonnage exceeding 26:
0101.29.00 - - Other 8904.00.31 - - Of a power not exceeding
0101.30 - Asses: 4,000 HP
0101.30.10 - - Pure-bred breeding animals 8904.00.39 - - Other
0101.30.90 - - Other
0101.90.00 - Other 61 62

OTHER OTHER
Example # 3: Determine the product coverage of 8712.00.30 and Hdg. AHTN Code
8712.00.90 Description
No. 2012
Hdg. AHTN Code 87.12 Bicycles and other cycles (including delivery
Description
No. 2012 tricycles), not motorized.
87.12 Bicycles and other cycles (including delivery 8712.00.10 - Racing bicycles
tricycles), not motorized.
8712.00.20 - Bicycles designed to be ridden by
8712.00.10 - Racing bicycles
children
8712.00.20 - Bicycles designed to be ridden
8712.00.30 - Other bicycles
by children
8712.00.30 - Other bicycles 8712.00.90 - Other

8712.00.90 - Other
Subheading 8712.00.30 covers:

63 64

OTHER
Hdg. AHTN Code
Description
No. 2012
87.12

8712.00.10
Bicycles and other cycles (including delivery
tricycles), not motorized.
- Racing bicycles
III.
8712.00.20 - Bicycles designed to be ridden by
children THE GENERAL
8712.00.30 - Other bicycles
8712.00.90 - Other
INTERPRETATIVE
Subheading 8712.00.90 covers:
RULES (GIRs)
65 66

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THE GENERAL INTERPRETATIVE RULES THINGS TO REMEMBER

 There are SIX GENERAL RULES.  The application of the GIRs (1 – 4) should
always be in SEQUENTIAL ORDER:
● The first five (5) Rules relate to
classification in the 4-digit headings. Rule 1 is to be taken into consideration
first.
● Rule 6 relates to classification in the If classification is not covered by the
subheading level. provisions of Rule 1, then apply Rule 2,
 The Rules set out the principles for and so on.
classification in the HS nomenclature.  Goods must first be classified in the 4-
digit HS heading whose terms most
 They are an integral part of the specifically describe the goods (unless
Nomenclature, providing uniform otherwise required or directed by the
application and interpretation. GIRs); and…

THINGS TO REMEMBER THE GENERAL INTERPRETATIVE RULES

 Only 4-digit headings are comparable: Rule 1 Terms of the Headings,
Section/Chapter Notes
Do not compare a heading description with
Rule 2 (a) Incomplete or unfinished;
a subheading description. Unassembled or disassembled
Example: Rule 2 (b) Mixtures or combinations
Classification of an electric toothbrush. Rule 3 2 or more headings
Rule 3 (a) Most specific
? Heading 85.09 as an “Electro-mechanical
domestic appliances with self-contained Rule 3 (b) Essential character
electric motor,…” Rule 3 (c) Last in numerical order
OR Rule 4 Most akin
? Subheading 9603.21 which provides for Rule 5 (a) Special containers
“Toothbrushes,…”.
Rule 5 (b) Packing materials & containers
(Heading 96.03 provides for “Brooms,
brushes…”) Rule 6 Subheading rule

THE GENERAL INTERPRETATIVE RULES RULE 1: Terms of the heading and any
RULE 1: relative Section or Chapter Notes

 Titles of Sections, Chapters and Sub- EXAMPLE: Live poultry… (heading 01.05)
Chapters are provided for ease of
reference only.
 Classification shall be determined
according to the TERMS of the
HEADINGS and any relative SECTION
or CHAPTER NOTES.
● Provided such headings or Notes do
not otherwise require, according to
the following provisions, i.e., GIRs 2
to 6.

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THE GENERAL INTERPRETATIVE RULES THE GENERAL INTERPRETATIVE RULES

RULE 2(a) – Examples:
RULE 2:
 Preform bottle -
EXTENDS THE SCOPE OF CLASSIFICATION Unfinished (heading 39.23
TO INCLUDE GOODS IMPORTED IN A covers plastic bottles)
CONDITION NOT SPECIFICALLY
RECOGNISED IN THE TARIFF  Wrist watch without strap - Incomplete
NOMENCLATURE. (heading 91.02 covers wrist watches)
 INCOMPLETE, UNFINISHED,
UNASSEMBLED OR DISASSEMBLED
GOODS.
 REFERENCE TO GOODS COMPRISED OF
DIFFERENT MATERIALS OR  Unassembled office chair
SUBSTANCES. (heading 94.01 covers seats)

THE GENERAL INTERPRETATIVE RULES THE GENERAL INTERPRETATIVE RULES

RULE 3:
RULE 3(a) : Example - Chair/ladder
For goods classifiable under two or
more headings:  Wooden ladder (heading 44.21- Other
articles of wood);
(a) Most specific description.
 Wooden chair (heading 94.01 - Seats)
(b) Mixtures, composite goods, and
goods put up in sets for retail sale,
shall be classified on the material
or component that gives the
essential character.

(c) Classified under the heading which

occurs last in numerical order.

THE GENERAL INTERPRETATIVE RULES THE GENERAL INTERPRETATIVE RULES

Rule 3(b): Essential character
Rule 3(a): Principles
 MIXTURE: Mixture of barley (60%) of heading
10.03 and oats (40%) of heading 10.04.
Relative Specificity
 COMPOSITE GOOD:
Combined wrist watch of
 A description by name is more heading 91.02 and lighter
specific than a description by of heading 96.13 (both
class. contained in the same
housing).
 A description that more clearly  SET: Hairdressing kit
consisting of an electric
identifies a product is more hair clipper of heading
specific than one which is less 85.10, a comb of heading
96.15, a pair of scissors of
complete. heading 82.13, and a brush
of heading 96.03.

ENG’R ART D. BERNARDINO ( Page 13 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

What is the Essential Character THE GENERAL INTERPRETATIVE RULES

of a Product?
Rule 3(c): Last in numerical order
The essential character of a product, may, for
example, be determined by:  Chandeliers  Electric lamp
 The nature of the material or component (heading 94.05) (heading 94.05)
 Its bulk with electric fan with alarm clock
 Its quality (heading 84.14) (heading 91.05)
 Its weight
 Its value
 Role of the constituent material in relation
to the use of the goods
 Other factors
The essential character is determined on a
case-to-case basis.

THE GENERAL INTERPRETATIVE RULES Kinship may depend on

such factors as:
RULE 4: Most Akin
Goods which  Description
cannot be
classified in  Character
accordance with
the above Rules  Purpose or intended use
shall be
classified under  Designation
the heading
appropriate to  Production process
the goods to EXAMPLE:
which they are Exhaust Air Jack  Nature of the goods
most akin. (heading 84.25)

THE GENERAL INTERPRETATIVE RULES THE GENERAL INTERPRETATIVE RULES

RULE 5: RULE 5 (a)

(a) The case or container presented  Violin with case (heading 92.02)
normally with an article is classified
under the heading where the article
is classified.
(b) Packing materials and packing
containers entered with the goods
are classified with the goods. Packing materials and packing containers
 If of a kind normally used for packing. entered with the goods therein shall be
classified with the goods if they are of a
 But not when material or containers kind normally used for packing such
are clearly suitable for repetitive use.
goods.

ENG’R ART D. BERNARDINO ( Page 14 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

THE GENERAL INTERPRETATIVE RULES THE GENERAL INTERPRETATIVE RULES

RULE 5 (a) RULE 5 (b): Packing materials and packing
 CONTAINERS TO BE CLASSIFIED WITH THE containers entered with the goods.
ARTICLES FOR WHICH THEY ARE INTENDED
ARE: Example:
(1) SPECIALLY SHAPED OR FITTED TO  MEN’S SHIRTS
CONTAIN A SPECIFIC ARTICLE OR SET OF INDIVIDUALLY SEALED IN A
ARTICLES; POLYBAG THEN
(2) SUITABLE FOR LONG-TERM USE;
(3) PRESENTED WITH THE ARTICLES FOR PACKED IN CARDBOARD
WHICH THEY ARE INTENDED, WHETHER BOXES.
OR NOT THE ARTICLES ARE PACKED
SEPARATELY FOR CONVENIENCE OF ENTIRETY
TRANSPORT; AND CLASSIFIED
(4) OF A KIND NORMALLY SOLD WITH SUCH
AS SHIRTS
ARTICLES.

THE GENERAL INTERPRETATIVE RULES THE GENERAL INTERPRETATIVE RULES

Packing materials or containers

designed for REPETITIVE USE. RULE 6: SUBHEADING RULE
Example:
Classification of goods in the
Gumball dispensing machine
(predominantly of zinc alloy) subheadings shall be determined
imported with gumballs. It is according to the terms of those
designed to accept a coin and
release a candy. subheadings and any related
 Gumballs (17.04) These Packing materials Subheading Notes.
or containers are to be
 Dispenser (79.07) classified SEPARATELY
with their content.

THE GENERAL INTERPRETATIVE RULES

RULE 6: SUBHEADING RULE IV.

Directs that classification below
heading level be determined in IMPORT DUTY
accordance with the application of
all interpretative rules in an DETERMINATION
identical manner to that used at MFN, ATIGA, ACFTA, AKFTA,
heading level.
AANZFTA, AJCEP, PJEPA,
Remember that ONLY subheadings AIFTA, Special Laws
at the SAME LEVEL are comparable.
90

ENG’R ART D. BERNARDINO ( Page 15 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

APPLICATION OF TARIFF
FREE TRADE AREAS (FTAs) &
ECONOMIC PARTNERSHIPS RATE
COUNTRY OF ORIGIN/ CO
EXPORT Form
 The ASEAN Free Trade Area (AFTA)
MFN  All countries EXCEPT NONE
 The ASEAN-China Free Trade Area (ACFTA)
participants in FTA/EP,
 The ASEAN-Korea Free Trade Area (AKFTA) i.e., ASEAN-10, China,
 RP-Japan Economic Partnership Agreement (PJEPA) India, Korea, Japan,
Australia, & New Zealand
 ASEAN-Japan Comprehensive Economic Cooperation (AJCEP)
 With exported products
 ASEAN-Australia-New Zealand FTA (AANZFTA) that are NOT QUALIFIED
 ASEAN-India Free Trade Area (AIFTA) under the FTA/EP
 E.O. No. 61 (s. of 2011)
91 92
MFN rates up to year 2015

APPLICATION OF TARIFF APPLICATION OF TARIFF

COUNTRY OF ORIGIN/ CO COUNTRY OF ORIGIN/ CO
RATE RATE
EXPORT Form EXPORT Form
ATIGA  ASEAN-10 with products “D” ACFTA  ASEAN-9 and China “E”
qualifying under the FTA with products qualifying
 Applicable rates: under the FTA
 Applicable rates: E.O. Nos.
under E.O. Nos.
485 (EHP) (s. 2005),
617 (s. 2007), 703 (s. 2008),
487 (NT) (s. 2006),
850 (s. 2009), 892 for “sugar”
613 (NT) (s. 2007),
(s. 2010), 894 for “rice” (s. 2010)
618 (s. 2007), 814 (s. 2009),
 Also consult Column “7” of the 71 (HSL) (s. of 2012), and
TCCP-AHTN (ASEAN countries 72 (ST/NT) (s. of 2012)
enjoying concession)  Reciprocal Tariff Rate Treatment
 ROO - Value-Added & PSR 93
 ROO - Value-Added, PSR
94

How can Products under the ST List APPLICATION OF TARIFF RATE

Enjoy Preferential Tariff Rates? Country A
(Exporting Party)
Country B
(Importing Country)
Applicable ACFTA Rate
(Reciprocal Tariff Rate Treatment) EHP EHP Rate of Country B
EHP NT NT Rate of Country B
► Exporter’s ST rate of duty of such Sensitive ST ST/MFN Rate of Country B
Products have been reduced to 10% or below; EHP EHP Rate of Country B
NT NT NT Rate of Country B
► Applicable Tariff Rate: ST ST/MFN Rate of Country B
EHP MFN Rate of Country B
NT rate of the importing party or ST rate of the ST > 10% NT MFN Rate of Country B
exporting Party, whichever is HIGHER. However, ST ST/MFN Rate of Country B

the applied import duty SHOULD NOT EXCEED the EHP EHP rate of Country B or ST Rate of Country A
whichever is HIGHER (MFN rate of Country B is
MFN rate of the importing party. applied if it is lower than ST rate of Country A)
ST < 10% NT NT Rate of Country B or ST Rate of Country A
* Further, nothing in the Agreement prevents the whichever is HIGHER (MFN rate of Country B is
importing Party from granting to the exporting Party the applied if it is lower than ST rate of Country A)
Normal Track or Early Harvest Programme rate even if ST ST/MFN Rate of Country B
such rate is lower than the exporting Party’s tariff rate. RECIPROCAL TARIFF RATE ARRANGEMENT
95 96

ENG’R ART D. BERNARDINO ( Page 16 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

APPLICATION OF TARIFF RATE APPLICATION OF TARIFF RATE

EXPORTER IMPORTER EXPORTER IMPORTER
- If the product is in the EHP of The product is: - If the product is in the EHP of
The product is the importing country: the importing country:
in the EHP or NT List in the ST List
Applicable rate is EHP rate Applicable rate is still MFN rate
of the exporting of the exporting
- If the product is in the NT List - If the product is in the NT List
country of the importing country: Country and of the importing country:
Applicable rate is NT rate have a rate of Applicable rate is still MFN rate
- If the product is in the ST List MORE than 10% - If the product is in the ST List
of the importing country: of the importing country:
Applicable rate is ST/MFN rate Applicable rate is ST/MFN rate

97 98

RECIPROCAL TARIFF TREATMENT RECIPROCAL TARIFF TREATMENT

EXPORTER IMPORTER EXPORTER IMPORTER
The product is: - If the product is in the EHP of The product is: - If the product is in the NT of the
in the ST List the importing country: in the ST List importing country:
Applicable rate is EHP rate of Applicable rate is the NT rate of
of the exporting of the exporting
importer or ST rate of Exporter, importer or ST rate of Exporter,
Country and whichever is HIGHER. OR the Country and whichever is HIGHER. OR the
have a rate of MFN rate if it is lower than ST have a rate of MFN rate if it is lower than ST
10% or BELOW rate of Exporter. 10% or BELOW rate of Exporter.
EXAMPLE: EXAMPLE:
EHP rate : 0% NT rate : 3%
ST rate (exporter) : 9% ST rate (exporter) : 8%
MFN rate (importer) : 10% MFN rate (importer) : 10%
ST rate of 9% ST rate of 8%
EHP rate : 0% NT rate : 3%
ST rate (exporter) : 9% ST rate (exporter) : 8%
MFN rate (importer) : 7% MFN rate (importer) : 5%

RECIPROCAL TARIFF TREATMENT APPLICATION OF TARIFF

EXPORTER IMPORTER
COUNTRY OF ORIGIN/ CO
The product is: - If the product is in the ST RATE
EXPORT Form
in the ST List of the importing country:
of the exporting Applicable rate is the AKFTA  ASEAN-9 and Korea “AK”
Country and ST/MFN rate of the with products qualifying
have a rate of importer. under the FTA
10% or BELOW  Applicable rates: E.O. Nos.
638 (s. 2007), 639 (NT) (s. 2007),
812 (NT) (s. 2009), 895 (s. 2010),
73 (HSL) (s. of 2012), and
74 (ST/NT) (s. of 2012)
 Reciprocal Tariff Rate
Treatment
 ROO - Value-Added, PSR 102

ENG’R ART D. BERNARDINO ( Page 17 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

How can Products under the ST List APPLICATION OF TARIFF RATE

Enjoy Preferential Tariff Rates?
(Reciprocal Tariff Rate Treatment) Country A Country B
Applicable AKFTA Rate
(Exporting Party) (Importing Country)
► Exporter’s ST rate of duty of such Sensitive NT NT Rate of Country B
NT
Products have been reduced to 10% or below ST ST/MFN Rate of Country B
(with Notification); NT MFN Rate of Country B
ST > 10%
ST ST/MFN Rate of Country B
► Applicable Tariff Rate: NT NT Rate of Country B or ST Rate of
Country A whichever is HIGHER (MFN
NT rate of the importing party or ST rate of the rate of Country B is applied if it is lower
ST < 10%
exporting Party, whichever is HIGHER. However, than ST rate of Country A)
the applied import duty SHOULD NOT EXCEED the ST ST/MFN Rate of Country B
MFN rate of the importing party.
RECIPROCAL TARIFF RATE TREATMENT
* Further, upon the discretion of the importing Party, the
Normal Track rate can be applied even if such rate is
lower than the exporting Party’s tariff rate. 103 104

APPLICATION OF TARIFF APPLICATION OF TARIFF

COUNTRY OF ORIGIN/ CO COUNTRY OF ORIGIN/ CO

RATE RATE
EXPORT Form EXPORT Form

AANZFTA  ASEAN-9, Australia, & “AANZ” AJCEP  ASEAN-9 and Japan “AJ”
New Zealand with with products qualifying
products qualifying under the FTA
under the FTA  Applicable rates:
 Applicable rates: under EO 852 (s. 2009)
under EO 851 (s. 2009)  ROO - Value-Added, PSR
 ROO - Value-Added, PSR
105 106

APPLICATION OF TARIFF APPLICATION OF TARIFF

COUNTRY OF ORIGIN/ CO COUNTRY OF ORIGIN/ CO

RATE RATE
EXPORT Form EXPORT Form

PJEPA  Japan and the Phils. “JP” AIFTA  ASEAN and India “AI”
with products qualifying with products qualifying
under the Economic under the Free Trade Area
Partnership  Applicable rates:
 Applicable rates: under EO 25 (s. 2011)
under EOs 767 (s. 2008),  ROO - Value-Added, PSR
905 (s. 2010)
 ROO - Value-Added, PSR
107 108

ENG’R ART D. BERNARDINO ( Page 18 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

AFTA
ACFTA AKFTA AANZFTA AJCEP PJEPA AIFTA
ATIGA
Form Form Form Form Form Form Form
ASEAN COUNTRY ABBREVIATIONS
D E AK AANZ AJ JP AI USED IN THE TCCP-AHTN
ORIGINATING as per governing ROO
1) BRUNEI DARUSSALAM - BN
ASEAN ASEAN ASEAN
9 9 9
2) CAMBODIA - KH
ASEAN PHILS. ASEAN
ASEAN + + + 9 + + 3) INDONESIA - ID
10 CHINA KOREA AUSTRALIA
+
+ JAPAN INDIA 4) LAO PEOPLE’S DEMOCRATIC - LA
JAPAN
ACFTA AKFTA
NEW REPUBLIC (LAOS)
ZEALAND
RATE
EO 485
RATE
EO 638
5) MALAYSIA - MY
ATIGA
EO 487
EO 613
EO 639
AANZFTA AJCEP PJEPA 6) MYANMAR - MM
EO 618 EO 812 AIFTA
RATE EO 814 EO 895 RATE RATE RATE RATE 7) PHILIPPINES - PH
EO 617 EO 71 EO 73 EO 851 EO 852 EO 767
EO 25
EO 703 EO 72 EO 74 EO 905 8) SINGAPORE - SG
EO 850 9) THAILAND - TH
EO 892 Product: 1) is in ST list of CH or KR, with rate of 10% or below and
EO 894 2) is in NT list of PH,
10) VIET NAM - VN 110
3) applicable rate (Tariff Rate Reciprocity) = Whichever is higher

REMINDER (SPECIAL LAWS): IMPORT DUTY DETERMINATION

EXAMPLE 1:
ALWAYS LOOK AT FOOTNOTES IN THE
Determine the correct duty rate of an ivory
TCCP-AHTN FOR SPECIAL LAWS ashtray imported from Malaysia, deemed
GOVERNING THE APPLICATION OF originating under the AFTA ROO, was issued a
PREFERENTIAL DUTY RATES FOR CO Form D and classified under AHTN code
QUALIFIED IMPORTERS, SUCH AS: 9601.10.00.

AFMA (RA 8435 and 9281), JEWELRY ACT,

MOTOR VEHICLE DEVELOPMENT PROGRAM,
AUTOMOTIVE EXPORT PROGRAM, BIO-FUELS,
ETC. WITH CERTIFICATION/ACCREDITATION
from DA, DTI, DOE, etc, as required. 111 112

STRUCTURE OF HEADING 96.01 (TCCP-AHTN 2012 edition)

IMPORT DUTY DETERMINATION
Member
Hdg.
AHTN
MFN ATIGA States EXAMPLE 2:
Code Description
No. 2013 2013 Enjoying
2012
Concession
Determine the correct import duty rate of an
antique (made in year 1893) wooden dining
96.01 Worked ivory, bone,
tortoise-shell, horn, table imported from Myanmar, deemed
antlers, coral, mother- originating under the AFTA ROO, was issued a
of-pearl and other
animal carving material,
CO Form D and classified under AHTN code
and articles of these 9706.00.00.
materials (including
articles obtained by
moulding).
9601.10.00 - Worked ivory and 3 0 Except LA.
articles of ivory

Therefore, the correct import duty rate of the

subject article is ____ 113 114

ENG’R ART D. BERNARDINO ( Page 19 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION
 HS/AHTN/TCCP, CLASSIFICATION, GIRs, ROO, and IMPORT DUTY DETERMINATION
(20 November 2013)

STRUCTURE OF HEADING 97.06 (TCCP-AHTN 2012 edition) IMPORT DUTY DETERMINATION

EXAMPLE 3:
Member
AHTN Determine the correct tariff rate of aluminum
Hdg. MFN ATIGA States
No.
Code Description
2013 2013 Enjoying cylindrical tanks for liquefied petroleum gas
2012
Concession imported from Germany and classified under
97.06 9706.00.00 Antiques of an age 10 0 Except KH, AHTN code 7613.00.00. Further, importer
exceeding one LA and MM. secured a certification from the DOE that
hundred years.
articles will be used for the Natural Gas Vehicle
Program for Public Transport.
Therefore, the correct import duty rate of the
subject article is ____

115 116

STRUCTURE OF HEADING 76.13 (TCCP-AHTN 2012 edition)

Member
AHTN
Hdg. MFN ATIGA States
Code Description
No. 2013 2013 Enjoying
2012
Concession

76.13 7613.00.00 Aluminum 7 /j 0 All.

containers for
compressed or
liquefied gas.

Therefore, the correct import duty rate of the

subject article is _________
/j Duty free when imported with certification from the Department of
Energy that articles will be used for the Natural Gas Vehicle Program
for Public Transport.

ENG’R ART D. BERNARDINO ( Page 20 of 20 )

DIRECTOR, PHILIPPINE TARIFF COMMISSION