This document of the Ministry of Finance stipulates the method of calculating import tariffs on component sets that do not meet specified standards, applicable to the General Department of Customs in handling import tariffs. The highlight is determining the degree of disassembly of components to apply a higher tariff rate than those specified for assembled components.
Key points
- Enterprises importing unassembled components for manufacturing and assembly of mechanical-electrical-electronic products → must apply a higher tariff rate by one level compared to the preferential import tariff rates set forth in the Tariff Schedule when not meeting the standards for IKD or CKD component sets
- Goods with a lower degree of disassembly than IKD2 → apply the tariff rate for IKD1 component sets
- Goods with a lower degree of disassembly than IKD1 → apply the tariff rate for CKD2 component sets
- Goods with a lower degree of disassembly than CKD2 → apply the tariff rate for CKD1 component sets
- Goods with a lower degree of disassembly than CKD1 → apply the tariff rate for fully assembled goods
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LETTER
OF THE MINISTRY OF FINANCE NUMBER 303 TC/TCT DATED JANUARY 10, 2001
REGARDING IMPORT DUTY RATES FOR KIT PARTS
RESPECTED: General Department of Customs
In response to the letter number 5718/TCHQ-KTTT dated December 11, 2000 from the General Department of Customs regarding the handling of import duties for kit parts; the Ministry of Finance provides its opinion as follows:
Regarding the handling of import duties in cases where imported goods are in kit form but do not meet the specified standards, on August 10, 2000, the Ministry of Finance issued letter number 3269 TC/TCT providing specific guidance (a copy is attached). According to the guidance provided in letter number 3269TC/TCT, in principle, for cases where enterprises import kit parts to produce and assemble mechanical-electrical-electronic products that have been specified with import duty rates for kit parts (regardless of CKD or IKD) as set out in the Preferential Import Tariff Table attached to Decision No. 1803/1998/QĐ/BTC dated December 11, 1998 by the Minister of Finance, but some details do not conform to the standards for IKD and CKD kit parts defined by the Ministry of Science, Technology and Environment, then import duties must be calculated according to a higher duty rate specified in the Import Tariff Table, specifically:
* In cases where the current Import Tariff Table specifies that the product has IKD1, IKD2, CKD1, or CKD2 kit forms, the following applies:
Imported goods with a degree of disassembly less than IKD2 must be subject to an import duty rate for IKD1 kit parts.
Imported goods with a degree of disassembly less than IKD1 must be subject to an import duty rate for CKD2 kit parts.
Imported goods with a degree of disassembly less than CKD2 must be subject to an import duty rate for CKD1 kit parts.
Imported goods with a degree of disassembly less than CKD1 must be subject to an import duty rate for fully assembled products.
* In cases where the current Import Tariff Table specifies that the product has IKD or CKD kit forms, the following applies:
Imported goods with a degree of disassembly less than IKD must be subject to an import duty rate for CKD kit parts.
Imported goods with a degree of disassembly less than CKD must be subject to an import duty rate for fully assembled products.
The Ministry of Finance provides this information for the General Department of Customs to be aware and implement accordingly.
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