Customs classification of goods (tariff classification)
The import duty to be paid is based on the Common Customs Tariff. Import duties and other measures provided for in EU regulations which govern specific areas of trade with goods, apply in particular, according to the tariff classification of those goods.
The tariff classification of goods consists in the determination of one of the subheadings or further subdivisions of the combined nomenclature under which those goods are to be classified. For the application of non-tariff measures, tariff classification of goods consists in the determination of one of the subheadings of the combined nomenclature or further subdivisions of the combined nomenclature, or of any other nomenclature based on the combined nomenclature.
The Common Customs Tariff is established by the Customs Tariff, where Annex I is amended every year. The Customs Tariff is thereby regularly introduced for each calendar year.
Each customs tariff consists of a combination of two main elements, namely the goods nomenclature and the tariff rates. The goods nomenclature is a systematic list of goods which are released into circulation when are in contact with third countries. It contains the relevant numerical code and description of the goods under the numerical code. The goods nomenclature goes beyond customs law and is also applied in other fields of law, such as tax law. The tariff rate is a criterion for incurring customs debt. The classification of the tariff rates according to the basis for assessment of customs duties is as follows:
- ad valorem duty,
- specific duty,
- combined duty.
However, the classification of goods into the appropriate subheading, based on the description, is not always simple and the goods may appear to be classified into two or more subheadings of the combined nomenclature. And because of the second element of the tariff, namely the tariff rate, there is, of course, a tendency on the part of a declarant to prove, that the particular goods are classified into the subheading of the combined nomenclature which is associated with a lower tariff rate or which does not fall under other restrictive measures according to special regulation. It is neither possible nor intended for all existing tradable goods to be classified into the specific subheading of the combined nomenclature.
For this reason, the explanatory notes to the combined nomenclature are necessary during the work with the customs tariff. The explanatory notes to the combined nomenclature have been considered by the case law of the Court of Justice of the European Union as a recognized guidance for tariff application since 1970 and are currently published in accordance with Article 9 (1) of the Customs Tariff on customs and statistical nomenclature and the Common Customs Tariff. They do not have the nature of a source of law, but have the nature of an administrative guidance. The Explanatory notes to the combined nomenclature summarize several sources, including the Explanatory Notes to the Harmonized System, Union decisions, judicial decisions, national decisions and guidance. In that regard, it should be noted that the Customs Tariff begins with the General Rules for the Interpretation of the Combined Nomenclature, the General Rules on Tariffs and the General Rules Applicable to Nomenclature and Tariffs, which are also an integral guidance in the process of classifying goods under the relevant CN subheading.
