Circular No. 11052/TC/TCT regarding classification and import tax calculation for mechanical-electronic-electrical components imported for assembly of complete machinery-electronics products with an import tariff rate below 30%.

LETTER

OF THE MINISTRY OF FINANCE NUMBER 11052 TC/TCT DATED NOVEMBER 19, 2001
REGARDING CLASSIFICATION AND COLLECTION OF IMPORT TAX ON IMPORTED COMPONENTS FOR ASSEMBLING MACHINERY - ELECTRICITY - ELECTRONICS PRODUCTS WITH AN IMPORT DUTY RATE LESS THAN 30%
IN BULK

Respected: - General Department of Customs

Respectfully copied to: - People's Committees of provinces and centrally-administered cities
Central

- Ministries, ministerial-level agencies, and government agencies
Government

The Ministry of Finance has received letters from the Ministry of Planning and Investment and some enterprises reflecting difficulties in classifying imported items such as telephone kits and water meter kits at certain customs checkpoints. To ensure uniform classification, calculation, and collection of import taxes on imported components for assembling telephones, water meters, and other machinery - electricity - electronics products in bulk with an import duty rate less than 30%, the Ministry of Finance provides guidance as follows:

Based on the Import Tariff Schedule promulgated together with Decision No. 1803/1998/QĐ-BTC dated December 11, 1998 by the Minister of Finance and various lists amending and supplementing names and import duty rates for certain groups of items in the Import Tariff Schedule issued pursuant to several Decisions of the Minister of Finance; Principles for classifying goods according to the List of Import Tariff Schedule stipulated in Circular No. 37/1999/TT-BTC dated April 7, 1999 by the Ministry of Finance, and referring to the World Customs Organization's Harmonized System Explanatory Notes:

Machinery - electricity - electronics products with an import duty rate for finished goods less than 30% assembled from unassembled components (unassembled components may be completed products not yet assembled or in a state that is not yet a complete product but has the basic characteristics of a finished product to be assembled together using simple assembly methods such as screws, bolts, nuts, nails, rivets, or welding) shall be classified according to the following principles:

1. In cases where unassembled components are imported in full sets (importing all parts of one product), they should be classified into the same group/subgroup/code and duty rate as specified for finished goods.

2. In cases where unassembled components are imported in incomplete sets (not importing all parts of one product), classification shall be made according to each group/subgroup/code and duty rate specified for each component according to the principles set out in the Tariff Schedule.

We request the General Department of Customs, based on the above classification principles, to uniformly direct the classification and calculation of import taxes on imported components for assembling machinery - electricity - electronics products in bulk with an import duty rate less than 30%, consistent with current regulations while guiding management measures to prevent abuse.