Circular No. 85/2003/TT-BTC guides the implementation of the classification of goods according to the Export and Import Goods List and the Preferential Import Tariff Schedule, Export Tariff Schedule.

Based on the Law on Export Duties and Import Duties amended and supplemented, adopted by the 10th National Assembly on May 20, 1998;

WHEREAS the Law on Customs was adopted by the National Assembly, tenth session, on June 29, 2001;

Based on the Law on Customs adopted by the 10th National Assembly on June 29, 2001;

WHEREAS Decree No. 54/CP dated August 28, 1993, and Decree No. 94/1998/NĐ-CP dated November 17, 1998, of the Government detailing the implementation of the Law on Export Duties and Import Duties;

Decision No. 49/QD-CTN dated March 6, 1998 of the President of the Socialist Republic of Vietnam regarding Vietnam's accession to the Harmonized System Convention (HS);

WHEREAS Decree No. 77/2003/NĐ-CP dated July 1, 2003, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance.

The Ministry of Finance issues guidelines for the classification of export and import goods as follows:

1. The Vietnamese Export and Import Goods List is established based on the Harmonized System (HS) nomenclature of the World Customs Organization, version 2002, detailed at a minimum code level of eight digits.

2. The principles for classifying goods specified in this Circular shall be applied to classify goods according to the List of Exported and Imported Goods, the Tariff of Preferential Import Duties, the Tariff of Export Duties, and the Lists of goods entitled to special preferential tariff rates that Vietnam has committed to with countries or regional or international economic organizations.

3. The provisions on the classification of export and import goods stipulated in this Circular shall be applied in customs areas (including pre-export and pre-import classification of goods, during the implementation of customs procedures, and post-clearance inspection), tax, trade statistics, and other state management fields related to export and import activities.

1.1. Six general rules (Annex 1 attached to this Circular);

1.2. The Mandatory Notes (located at the beginning of each part and chapter of the List of Exported and Imported Goods of Vietnam);

1.3. Detailed goods list.

2. The detailed goods list and Preferential Import Tariff Schedule: consist of 21 Parts, 97 Chapters (of which Chapter 77 is a reserve chapter), groups, subgroups, and detailed lists of items.

- Column 1: Group code column;

- Column 2: Subgroup code column with six digits;

- Column 3: Subgroup code column with eight digits;

- Column 4: Description of goods column;

- Column 5: Unit of measurement (in the Export and Import Goods List) or tariff rate (in the Preferential Import Tariff Schedule).

The Export Tariff Schedule does not establish a complete list according to the Vietnamese Export and Import Goods List but only details those commodity groups subject to export duties. The Export Tariff Schedule is divided into four columns:

- Column 1: Serial number of the commodity group subject to export duty;

- Column 2: Description of goods;

- Column 3: Group code containing the commodity group subject to export duty;

- Column 4: Export duty rate column.

In the Export and Import Goods List, each chapter is detailed into several commodity groups, each commodity group being coded with four digits.

Example: The commodity group "Precious Metal Ores and Concentrates" is coded with the code 2616, where the first two digits (26) are the chapter code (the 26th chapter of the Goods List), and the last two digits (16) determine the position of that group within the chapter (the 16th group of the chapter).

- Each commodity group may or may not be detailed into multiple six-digit subgroups.

Example: The subgroup "Sheep" is coded with the code 010410, where the first two digits (01) are the chapter code (the 01st chapter), the next two digits (04) determine the position of that group within the chapter (the 4th group of the chapter), and the last two digits (10) determine the position of that subgroup within the group (the first subgroup of the group).

- There are two ways to classify and code subgroups, also called first-level subgroups and second-level subgroups. Among them:

First-level subgroup:

The last digit of the subgroup is 0 and is marked with one dash (-) in the commodity group description column (column 4).

Example: subgroup 0101.90, 1901.10, 8703.10.

If a first-level subgroup is further divided into second-level subgroups, then this first-level subgroup is not assigned a code but is marked with one dash (-) in the commodity group description column because it is further divided into three second-level subgroups, for example: 1604.11, 1604.12, 1604.13.

Second-level subgroup:

The last digit of the subgroup is 1, 2, 3, 4, 5, 6, 7, 8, 9 and is marked with two dashes (--) in the commodity group description column.

Example: subgroup 1602.32, 2101.11, 2839.19.

3.1. Some commodity groups in the Goods List are not detailed into six-digit subgroups but directly detailed into eight-digit subgroups. In addition to the group code, these subgroups are additionally coded with four digits: 00X0 (where X is one of the digits: 1, 2, 3, 4, 5, 6, 7, 8, 9).

Example: Group 7905 "Zinc in sheets, strips, and thin plates," not detailed into six-digit subgroups but detailed into eight-digit subgroups and coded as: 7905.00.10 "- Wires, bars, and rods, unprocessed" and 7905.00.90 "- Other."

3.2. Many six-digit subgroups in the Goods List are detailed into eight-digit subgroups according to the following system of dashes:

- Eight-digit subgroups belonging to first-level six-digit subgroups (one dash) will start with two dashes (-- ) in the commodity group description column (column 4);

- Eight-digit subgroups belonging to second-level six-digit subgroups (two dashes) will start with three dashes (- - -) in the commodity group description column (column 4).

Example: The subheading "- - carrots" with commodity code 0706.10.10 belongs to the six-digit first-level subheading 0706.10 and starts with two dashes in the description column. In this case, the first two digits (07) are the chapter code: Chapter 07; the next two digits (06) indicate the position of the group within the chapter: Group 06; the following two digits (10) indicate the position of the six-digit subheading within the group: first position; the last two digits (10) indicate the position of the carrot item within the eight-digit subheading: the first eight-digit subheading.

3.3. Depending on the level of detail of the goods, the eight-digit subheadings will be further detailed into specific subheadings: three-stripe eight-digit (- - -); four-stripe eight-digit (- - - -); five-stripe eight-digit (- - - - -); six-stripe eight-digit (- - - - - -).

Example: Items belonging to Group 8704 are detailed up to the five-stripe eight-digit subheading (8704.22.11, 8704.22.12...) and six-stripe eight-digit subheading (8703.90.62, 8703.96.63...).

3.4. In cases where six-digit subheadings are not further detailed into subsequent subheadings, they will be coded with two additional zeros (00).

Example: The subheading "- - Primates" for 0106.11 is added 00 at the end to become 0106.11.00.

3.5. In cases where groups of goods are not detailed into six-digit subheadings nor into eight-digit subheadings, four additional zeros (0000) will be added at the end.

Example: Group 1004 "Oats," which is not detailed into six-digit subheadings nor into eight-digit subheadings, will be added four zeros at the end to become 1004.00.00.

4.1. Import Duty Tariff Rate:

The tariff rate specified in the Import Tariff Schedule is the preferential duty rate issued by the Minister of Finance. The preferential duty rate is specified for a group of goods if that group does not break down into six-digit subheadings or eight-digit subheadings; or for a six-digit subheading if it does not break down into eight-digit subheadings; or for an eight-digit subheading if the groups or six-digit subheadings break down into eight-digit subheadings.

The principle of classifying goods to apply general, preferential, and special preferential import duties is uniformly implemented according to the guidelines set forth in this Circular.

4.2. Export Duty Tariff Rate:

Groups of items not specifically named and numbered in the Export Tariff Schedule are those groups of items subject to a zero percent (0%) export duty. Groups of items clearly named in the Export Tariff Schedule are those groups of items subject to export duty.

1.1. When classifying export and import goods to determine their commodity codes according to the Export and Import Goods List and the Preferential Import Duty Schedule, Export Duty Schedule, the principles must be followed:

- Adhere to the Export and Import Goods List of Vietnam; Preferential Import Duty Schedule; Export Duty Schedule.

- Adhere to the Six General Rules of the Harmonized System Convention.

- Adhere to the Mandatory Notes of the Harmonized System Convention.

1.2. In addition to the above bases, when classifying goods, supplementary notes of the ASEAN Harmonized Tariff Nomenclature (AHTN) issued in Appendix 2 attached to this Circular and detailed notes of the Harmonized System of Description and Coding of Goods of the World Customs Organization should also be referred to.

1.3. After classification, each item must have a full eight-digit commodity code and can only be classified under one unique commodity code according to the Export and Import Goods List of Vietnam.

1.4. For exported goods: In cases where certain exported goods are not detailed in the Export Tariff Schedule, when handling customs procedures, the declarant must still declare the name and commodity code of the goods according to the Export and Import Goods List of Vietnam.

Example: The item "seed onion" is not detailed with its commodity code and name in the Export Tariff Schedule. When handling customs procedures, the declarant must still declare the full name of the item, commodity code 0703.10.11, and the export duty rate of 0%.

2.1. Classification of complete equipment, integrated equipment

2.1.1. Principles of classification

2.1.1.1. Imported goods consisting of machines belonging to various groups and subgroups of Chapters 84, 85, 86, 88, 89, 90 of the current Preferential Import Duty Schedule shall follow the principle of classifying by the main machine to calculate import duties.

In cases where imported complete sets of equipment include multiple sets of machines or multiple production lines, each set/line having a main machine, these cases need to be classified into separate groups of machines and equipment corresponding to each production line to calculate duties according to the above-guided principle.

If the main machine has a higher import duty rate than other machines in the imported set, enterprises may choose between applying the classification principle by main machine or classifying each machine separately.

If imported complete sets of equipment, integrated equipment, in addition to the set of machines and equipment, also include raw materials, materials, auxiliary materials, fuel, workshops, automobiles, then the principle of classifying by main machine to calculate import duties shall only apply to machines belonging to Chapters 84, 85, 86, 88, 89, 90 of the current Preferential Import Duty Schedule; the principle of classifying by main machine to calculate import duties shall not apply to imported goods such as raw materials, materials, auxiliary materials, fuel, workshops, automobiles (these items shall be classified according to the principle: correctly classify them under the commodity code specified for the item in the current Preferential Import Duty Schedule).

2.1.1.2. A set of machinery applying the principle of classification according to the main machine includes at least two machines or devices belonging to one or more groups or subgroups of Chapters 84, 85, 86, 88, 89, 90 of the current Preferential Import Tariff. This set of machinery can be a combination (for example, a television equipment combination including receiving equipment, transmitting equipment, cameras..., a cigarette production line including tobacco processing machines, cigarette rolling machines, packaging equipment...) or it can be a production line (for example, a garment sewing line including sewing machines, cutting machines, hemming machines, buttoning machines, design tables, cutting machines, generators...). The different machines in this set have complementary characteristics that connect them together to operate simultaneously or sequentially to perform the specific function of each machine and of the entire system.

2.1.1.3. A set of machinery applying the principle of classification according to the main machine as stipulated in Points 2.1.1 and 2.1.2 may be:

a) Imported from one or more different markets, originating from one or more regions or from several different countries, arriving on the same voyage or not on the same voyage but forming a combination or a production line with a series of interconnected machines or equipment that complement each other to operate simultaneously or sequentially to perform the specific functions of each machine and of the entire system.

b) Both imported and domestically produced or purchased, but must meet three conditions:

- The main machine must be an imported machine;

- The set of machinery or equipment both imported and domestically produced or purchased must form a combination or a production line with a series of interconnected machines or equipment that complement each other to operate simultaneously or sequentially to perform the specific functions of each machine and of the entire system;

- The entity using the set of machinery both imported and domestically produced or purchased must declare and bear legal responsibility for the type of domestically produced or purchased machinery, the name of the manufacturing unit or supplier, and bear legal responsibility for the declaration. In case of incorrect declaration, in addition to being subject to back payment of import duties according to the correct tariff number of each piece of machinery or equipment as prescribed in the Import Tariff at the time of back payment, they will also be subject to administrative penalties or criminal liability according to the current provisions of the Law on Export Tax and Import Tax and related legal documents.

Imported goods that are complete sets of equipment or integrated equipment subject to import tax based on the main machine must have the following documents:

2.1.2.1. An economic and technical justification or an investment project for complete sets of equipment or integrated equipment approved by the competent authority, clearly stating the names of imported machinery or equipment and those produced or purchased domestically. The enterprise presents the original for customs authorities to check when importing.

2.1.2.2. A confirmation document from the specialized management agency regarding the main machine of the imported complete set of equipment or integrated equipment. The enterprise submits the original to the customs authorities when handling the procedures. The specialized management agency is the agency responsible for the specialized management of the use of imported machinery or equipment, which may be at the Ministry level or Department level. The specialized management agency bears legal responsibility for its confirmation.

For example, Joint Stock Company C located in Hanoi imports a set of beer-making machinery, then the confirming agency is the Ministry of Industry or the Department of Industry, not the People's Committees at various levels. Joint Venture Company B located in Quang Ninh Province imports a brick production line, then the confirming agency is the Ministry of Construction, not the Ministry or Department of Planning of the province.

In case there are difficulties in confirming the main machine, the specialized management agency will consult with the Ministry of Finance and relevant ministries and sectors to determine the main machine as the basis for calculating import taxes on these machines and equipment.

2.1.2.3. The import contract (direct or entrusted), detailed packing list of the imported goods, and other documents (if any) clearly stating the names of the imported machinery or equipment (submitting the original to the customs authorities).

2.1.3.1. Based on the documents specified in Point 2.1.2 above and the results of checking the actually imported goods, or both imported and domestically produced or purchased (if applicable) in compliance with this Circular, the customs authority handling the import procedures will calculate the tax on the set of machinery of the complete set of equipment or integrated equipment based on the main machine and keep records to monitor the actual imported goods against the approved list of goods to be imported in the economic and technical justification or investment project.

2.1.3.2. If there is doubt about the accuracy of the confirmation by the competent authority, the customs authority handling the import procedures will still temporarily calculate the tax based on the confirmed main machine and immediately inform the confirming agency while reporting to the General Customs Department for resolution. In case of unresolved issues, the General Customs Department will report to the Ministry of Finance to work with relevant ministries and sectors to resolve the issue.

If the confirmation by the competent authority is inconsistent, the imported goods will be recalculated for tax. If the amount of import tax already paid exceeds the amount of tax due according to the recalculated rate, the entity importing the complete set of equipment or integrated equipment will be refunded the excess tax or offset against the tax due for the next consignment. If the amount of tax already paid is less than the amount of tax due according to the recalculated rate, the customs authority will implement back payment of tax for the goods that have been processed.

The implementation of back payment, refund, or offset of tax shall be carried out in accordance with the provisions of the Law on Export Tax and Import Tax.

2.1.3.3. In cases where declarations for importing sets of machinery and equipment or complete units or complete sets are made to be subject to import tax calculation and payment based on the main machine but in reality, these machines and equipment are not used as a combined unit or assembly line but are used individually, in addition to the supplementary collection of import taxes at the correct rates specified for each machine, the entity will also face administrative penalties or criminal liability according to the current provisions of the Law on Export Duties and Import Duties and related legal documents.

2.1.3.4. The Ministry of Finance will coordinate with relevant ministries and sectors to handle specifically the application of the principle of classification based on the main machine for cases of importing sets of machinery or complete units of equipment other than those belonging to the groups or subgroups of items under Chapters 84, 85, 86, 88, 89, 90 of the current Preferential Import Tariff Schedule (for example: complete pipeline equipment).

2.1.3.5. Sets of machinery and equipment belonging to the groups or subgroups of items under Chapters 84, 85, 86, 88, 89, 90 of the current Preferential Import Tariff Schedule, if classified according to the principle of classification based on the main machine to calculate import tax as stipulated in this Circular, shall also be considered as complete sets for determining the objects exempt from value-added tax according to the Law on Value-Added Tax.

2.2. Classification of assembled and unassembled spare parts of mechanical, electrical, and electronic products:

Assemblies of unassembled and assembled spare parts for assembling mechanical, electrical, and electronic products (individual unassembled spare parts may be finished products that have not been assembled yet or are not yet complete products but already possess the basic characteristics of finished products to be assembled together using simple assembly means such as screws, bolts, nuts, nails, or welding), shall be classified according to the following principles:

2.2.1. In cases of importing assembled spare parts (importing all components of a product), they shall be classified into the same group/subgroup/item number and tariff rate prescribed for the complete product.

2.2.2. In cases of importing unassembled spare parts (importing incomplete components of a product), they shall be classified separately according to the respective group/subgroup/item number and tariff rate prescribed for each component.

2.3. Classification of assemblies of mechanical-electrical-electronic products implementing preferential tax policies based on the level of domestic content:

For unassembled assemblies that enterprises register to implement preferential tax policies based on the level of domestic content, when imported, a unified preferential tariff rate based on the level of domestic content will apply to the entire list of imported spare parts.

When classifying goods, depending on specific circumstances, classification shall be based on one or more of the following grounds:

2.1. List of export and import goods of Vietnam; Import Tariff Schedule; Export Tariff Schedule.

2.2. Actual goods;

2.3. Technical documentation, detailed descriptions of goods, illustrative catalogues of goods;

2.4. Results of goods analysis and inspection.

1.1. The declarant has the responsibility to classify goods (accurately determine the name, description, and item number of exported and imported goods) on the customs declaration form and bear responsibility for such classification.

1.2. If the declarant cannot classify the goods themselves and does not request the customs authority to classify the goods before handling customs procedures as stipulated in Section IV Part B below, they may request a specialized inspection agency to inspect the goods as a basis for the declarant to classify the goods.

1.3. If the declarant disagrees with the classification conclusion of the customs authority, they shall follow the complaint procedure stipulated in Part D of this Circular.

2.1. When handling customs procedures for exported and imported goods, customs officers must base their classification on the provisions of Government Decree No. 06/2003/ND-CP dated January 22, 2003, and the guidance provided in this Circular. If they do not accept the declarant's classification of goods, they must have a basis and reclassify accurately.

2.2. If there is evidence that the declarant's classification of goods is inaccurate but the Customs Sub-department is unable to classify them, they should request the Goods Analysis and Classification Center under the General Department of Customs (hereinafter referred to as the Center) to classify the goods. The procedure for requesting the Center to classify goods follows the Goods Analysis and Classification Regulation issued by the General Department of Customs.

The classification conclusion of the Center is the basis for the Customs Sub-department to handle customs procedures.

2.3. If the classification result of the Center is found to be inaccurate and inconsistent with the actual exported and imported goods, it should be reported to the General Department of Customs for instructions.

Pre-classification of goods before exporting and importing goods (hereinafter referred to as pre-classification) applies in cases where the declarant has not yet handled customs procedures for exporting and importing goods.

1.1. Procedures:

- The declarant who requests pre-classification sends the Request Form (model in Appendix 3 of this Circular) along with samples and related documents to the Customs Sub-department where they plan to handle customs procedures for exporting and importing goods for classification.

- The Customs Sub-department receives the request, performs the classification, and issues a Notification of Pre-Classification Result (model in Appendix 4 of this Circular) to the declarant.

If classification is not possible, the Customs Sub-department requests the Center to perform the classification.

1.2. Effectiveness of the pre-classification result notification:

The announcement of the preliminary classification result shall be effective for implementation within six months from the date the customs authority issues the announcement. If the declarant does not complete the export or import procedures for the goods within this period, the announcement will lose its validity.

For goods that quickly change or deteriorate, the validity period may be shorter (depending on the nature of the goods and the storage conditions of the samples). The Customs Sub-Department shall determine the appropriate validity period for each specific case.

1.3. Conditions for applying the preliminary classification results:

- The sample remains in its original condition. It can be stored at the Customs Sub-Department or at the enterprise or warehouse of the carrier if it meets the sealing requirements of the customs and is accepted by the head of the Customs Sub-Department.

- The actual exported or imported goods are confirmed by the Customs Sub-Department to be the same goods that were preliminarily classified.

- During the period from when the customs authority announces the preliminary classification result until the declarant completes the actual export or import procedures, there is no change in the legal provisions regarding the classification of the goods subject to preliminary classification.

- The customs authority has not discovered any errors or inaccurate declarations by the declarant or any errors made by the customs authority in the preliminary classification.

1.4. Provisions on sample retention:

- In cases where the Customs Sub-Department directly conducts the classification, the sample retention period at the port of entry is one year from the date of receiving the sample. For goods that quickly change or deteriorate, the sample retention period is the validity period of the preliminary classification result announcement.

- In cases where the Customs Sub-Department requests the Classification Center to conduct the classification, the sample retention period at the Customs Sub-Department shall be carried out according to the regulations on analysis and classification of goods issued by the General Department of Customs Decision No. 710/TCHQ/QĐ/PTPL dated June 3, 2003.

The procedure for requesting preliminary classification is implemented as stipulated in Section 1.1 above.

After accepting the declarant's request and necessary documents and information for classification, the Customs Sub-Department assigns an inspector to directly inspect, photograph the goods, and classify them, then notify the declarant of the classification result.

If classification is not possible, the Customs Sub-department requests the Center to perform the classification.

The procedure for requesting preliminary classification is the same as for cases with a sample. In this case, the declarant must provide a detailed description of the goods on the preliminary classification request form and supply necessary documents and information to the Customs Sub-Department. If there is insufficient basis for classification, the Customs Sub-Department may refuse the declarant's request.

The preliminary classification result announcement in cases where there is no sample retained at the customs authority serves as a reference for customs procedures.

- To receive information from the customs authority, view or take samples of goods for classification and customs declaration purposes;

- To receive guidance from the customs authority on goods classification upon request;

- To have the right to lodge complaints in accordance with the law and the instructions provided in Part D of this Circular;

- To perform goods classification and customs declaration in accordance with the law and the instructions provided in this Circular, and bear legal responsibility for the results of their goods classification;

- To implement the goods classification decision of the customs authority during the export and import procedures;

- To provide samples, documents, and relevant materials to serve the purpose of goods classification and tax calculation as required by the customs authority.

1. To check the declarant's declaration on goods classification, tax calculation, and payment;

2. To guide the declarant on goods classification if requested;

3. To have the right to request the declarant to provide samples, documents, and relevant materials to serve the purpose of goods classification and tax collection;

4. To carry out goods classification, apply tax policies, and other management policies related to the law and the instructions provided in this Circular;

5. To report the classification results of new goods being processed for export and import procedures for the first time at their sub-directorate to the General Department of Customs for consolidation and application throughout the customs sector.

If the declarant disagrees with the customs authority's classification conclusion, they have the right to lodge a complaint in accordance with the law and the following procedures:

1. If the declarant disagrees with the classification conclusion of the Customs Sub-Department, they should submit a written request to the head of the Customs Sub-Department to review the consignment.

2. If the declarant disagrees with the resolution of the Customs Sub-Department's complaint as stipulated in item 1 above, they should submit a written request to the Director of the Provincial or City Customs Department for resolution.

3. If the declarant disagrees with the resolution of the Provincial or City Customs Department Director as stipulated in item 2 above, they should submit a written request to the Director-General of the General Department of Customs for resolution.

4. If the declarant disagrees with the resolution of the General Department of Customs Director as stipulated in item 3 above, they should submit a written request to the Minister of Finance for resolution. The decision of the Minister of Finance is final.

If the declarant disagrees with the resolution of the customs authority at all levels, they have the right to initiate a lawsuit in court in accordance with the law.

The time limit for resolving complaints shall be carried out in accordance with the current laws on complaints and denunciations.

This Circular takes effect fifteen days after its publication in the Official Gazette. Abolish previous regulations on classifying exported and imported goods that are contrary to the provisions of this Circular.

In the course of implementation, if any difficulties arise, units, organizations, and individuals are requested to promptly report them to the Ministry of Finance for resolution./.