TARIFF AND CUSTOMS CODE
B. Basis of Duty
Sec. 201 Basis of Dutiable Value (note: RA 8181 amended this section)
The DV shall be the Transaction Value which is the price actually paid or payable for the goods when sold for export to the Phil, adjusted by:
a. commissions and brokerage fees costs of containers
costs of packing
and item incorporated in the imported good;
tools, dies, moulds used I the production;
materials consumed in the production; engineering, development, artwork, design, plans and sketches undertaken not in Phil
such goods and services were supplied by buyer to seller free of charge or at a reduced rate to the extent that value was not included in the price paid c. royalties and license fees that buyer paid d. any part of the proceeds of a
subsequent resale, disposal or use of good that accrues to the seller
e. transportation cost from port of export to port of entry in Phil
f. loading, unloading and handling charges (arrastre)
g. insurance Alternative Methods16:
1. TV of identical goods sold for export in Phil at or about the same time as good being valued
2. TV of similar goods sold for export in Phil at or about the same time as good being valued
if DV still cannot be determined using through the successive application of the methods above, the order of succession of the ff may be reversed upon request of the importer:
3. unit price at which the imported or similar or identical good is sold domestically same condition as when imported to persons not related to seller at or about the same time of the importation of the goods being valued
COMPUTED VALUE =
cost of raw materials + profit and general expenses + freight + insurance fees + transpo expenses
4. using other means consistent with accepted principles of GATT
values shall be ascertained by Commissioner from reports of revenue and commercial attaches
values shall be published in at least 1 newspaper of general circulation
party dissatisfied with the values can file protest 15 days from date of publication if it becomes necessary to delay the final
determination of DV, release of
16Methods are applied successively. Alternative methods are used when value cannot be determined through successive application of previous methods.
imported goods may be had by filing cash bond (imposable duties and taxes + 25% thereof)
“Reasonable Doubt” refers to any condition that creates a probable cause to make the Commissioner of Customs believe in the inaccuracy of the invoice value of imported goods as declared by importer.
It may include the following situations: 1. if sale price is subject to some
consideration which value cannot be determined such as:
a. seller fixes price on condition that buyer will also buy other goods in specified quantities b. price of imported goods is
dependent upon price at which buyer sells other goods to seller
c. price is established on the basis of a form of payment extraneous to the Imported goods
2. part of proceeds of subsequent resale , disposal or use of goods will accrue to the seller
3. buyer and seller are related to one another and relationship affected the price. They are related if: - officers or directors of one
another’s business
- legally recognized partners in business
- Er-Ee (removed in RA 8181,
but included in CA 2-99)
- Any person owns, controls or holds 5% or more of the outstanding voting stocks of both of them
- One of them directly or indirectly controls the other - Both directly or indirectly
controlled by third person - members of same family
including brothers and sisters (whether full or half), spouse, ancestors and lineal descendants (note change in
CA 2-99)
“identical Goods” – same in all respects including physical characteristics, quality and reputation.
“Similar Goods” – although not alike in all respects, have like characteristics and component materials which enable them to perform the same functions and be commercially interchangeable
Sec. 202 Bases of Dutiable Weight
a) gross weight: weight of article + weight of all containers, packages, holders and packing where articles were contained during importation
b) legal weight: weight of article + weight of immediate containers, holders where such articles are usually contained at the time of their sale to the public in retail quantities
c) net weight: only the actual weight of article
d) articles affixed to cardboard, cards, paper, wood shall be dutiable together with weight of such holders
e) when a single package contains articles dutiable according to different weights, the common exterior of the receptacle shall be prorated.
Sec. 203 Rate of Exchange
Value quoted in foreign currency shall be converted into Phil currency at the exchange rate published by Central Bank
Sec. 204 Effective Date of Rates of Import Duty
Imported articles shall be subject to rates of import duty existing at the time of entry or withdrawal from warehouse
For articles abandoned, forfeited or seized by government and sold at public auction, the rate of duty shall be the rates in force at the time of auction
Duty based on weight, volume and quantity shall be levied and collected on the weight, volume and quantity at time of entry into
warehouse or date of
abandonment/forfeiture/seizure.
Sec. 205
Imported article deemed “entered” in Phil for consumption when:
- entry form is properly filed and accepted together with related documents
- duties, taxes, fees and other charges are paid or secured to be paid imported article
deemed to be “withdrawn” from warehouse in the Phil for consumption when:
- entry form is properly filed and accepted together with related documents
- duties, taxes, fees and other charges are paid or secured to be paid
Sec. 1308
Contents of Commercial Invoice
a. place, date, person by whom and the person to whom articles are sold
If imported other than in a purchase, place from which shipped, date when the person to whom and by whom they are shipped
b. port of entry
c. detailed description of the articles (sufficient for tariff classification and statistical purposes)
d. quantities
e. if articles bought in pursuance to purchase, purchase price in the
currency of purchase and the unit of quantity in which the articles were bought
f. if articles shipped otherwise than purchase, value of each article in unit which the article is usually bought and sold and in the currency they are usually transacted
OR price in the currency manufacturer would receive if sold in ordinary course of trade in usual wholesale quantities g. all charges
h. discounts, rebates, drawbacks, bounties i. current home consumption value or
price
j. other facts necessary for proper examination, appraisement and classification of the articles
Sec. 1309 Certificate of Invoice
Commercial invoice must be presented to the consular officer of the Phil for certification at the time or before or immediately after the shipment of article
Consular invoice shall be certified in consular district where articles were manufactured or purchased or shippers.
In the absence of Phil consul, the invoice may be certified by consular officer in the district nearest the place of exportation or person designated by DFA
Sec. 1310
All importations exceeding P10, 000 in DV shall be entered only
1. upon presentation of consular invoice under penalties of falsification, perjury. All importations exceeding P10, 000 in DV shall be entered only upon presentation of consular invoice under penalties of falsification, perjury OR
2. Affidavit showing cause why it is not possible to produce invoice + bond
Exempt from consular invoice requirement: a. conditionally free importations
b. tax free importations
c. importations of government agencies and instrumentalities
d. importations on consignment basis under RA 3137 and RA 6135 for re export
Sec. 1313 Information Furnished on Classification and Value
Classification:
When article not specifically classified in code, the interested party, importer or foreign exporter may submit a sample with full description of component materials in a written request.
Value:
Upon written application, Collector shall furnish importer within 30 days the latest information s to the DV of articles to be imported.
Importer must present all pertinent papers and documents, act in good faith and
unable to obtain information due to unusual conditions
Information given is not an appraisal nor is it binding upon the Collector’s right of appraisal.
Customs Administrative Order # 2-96 COMPONENTS OF DUTIABLE VALUE
COST + INSURANCE PREMIUM + FREIGHT
1. COST
a. Primary cost
- export value (at time of export or date nearest exportation) at which the same, identical or similar article is freely offered for sale in the principal export market of the exporting country in the usual wholesale quantities and in ordinary course of trade
- including: value of containers, coverings, packing other expenses, costs and charges incident to shipping article to Phil
b. Alternate Cost
- to be used if value cannot be ascertained thru the procedure given above or reasonable doubt exists as to the fairness of the value determined thru that process
Cost at Country of Manufacture or Origin
if such country is not the country of exportation
Third Country Cost
- export value of the article from a country with the same stage of economic development as the country of exportation
Domestic Wholesale Selling Price
- domestic selling price in Metro Manila or other principal market in Philippines MINUS
25% selling price (for expenses and profits) duties and taxes paid c. Identical and Similar goods
Identical Goods – same in all
respects (physical characteristics, quality and reputation)
minor differences in appearance shall not preclude it from being regarded as identical
Similar Goods – not alike in all
respects
- like characteristics and component materials
- perform same functions - commercially interchangeable factors to determine WON similar: quality, reputation and trademark
d. Relationship of Export Value and Invoice Value
export value ≠ importer’s invoice or transaction value
└ may be obtained from identical or similar articles of other transaction or source of information 2. INSURANCE PREMIUM covering
transportation to port of entry to Phil 3. FREIGHT covering transportation to
port of entry to Phil
RA 8181 (1996)
BASIS OF DUTIABLE VALUE OF