Good news on tariff classification front

There has always been much debate and difference of opinion on the classification of goods. Part of the problem has been bias on both sides – Customs preferring a classification that results in a higher rate of duty, while importers try to classify goods under a sub-heading that minimises the duty payable. In addition, tariff determinations have not been published for the benefit of parties importing like products. Instead, Customs maintains that it has been precluded from publishing such tariff determinations because of the confidentiality provisions in Section 4 of the Customs & Excise Act. The draft Customs Duty Bill has addressed this problem in a very practical and positive manner which should definitely be welcomed by all stakeholders. Section 103 (2) of the Draft Bill states that when classifying goods “the Compendium of Classification Opinions to the Harmonized Commodity Description and Coding System issued by the Customs Co-operation Council must be considered”. This will broaden the opinion base and allow classification to be achieved in a "democratic" and hopefully unbiased manner. Section 118 (1) of the Draft Bill states that "the Commissioner may make public particulars of any tariff determination or re-determination in such a manner and containing such information as the Commissioner may determine.” We sincerely hope that this will eventually lead to the publication of all local tariff determinations, leading to greater transparency and eliminating suspicion of unfair practice. These provisions bring with them a greater responsibility. Section 92 of the Draft Bill has extended the time limit on duty re-assessments to three years from the date of the original assessment of duty (customs clearance). We strongly suggest, as we have on many occasions in the past, that all importers, exporters and manufacturers undergo a thorough audit of their products to avoid hefty customs schedules in duty and penalties being imposed, especially now that Customs proposes to extend its audit period to three years. Lastly, it is interesting to note that Section 12 (1) of the bill states that "the Minister must, within a reasonable time after this Act took effect, by notice in the Gazette, issue a Customs Tariff replacing Schedules 1,2,3,4 and 5 to the Customs and Excise Act, 1964”. Customs @ Wylie will investigate the full meaning and impact of this particular section and provide an update in a future article.