What is a tariff heading?
Classifying goods in terms of tariff headings means assigning them a TARIC code, which is made up of the Combined Nomenclature (chapters, headings and subheadings) and customs duties. Correct classification is vital, not only for determining the duties a client has to pay but also for determining import and export requirements.
Furthermore, it should be pointed out that incorrect tariff classification of goods can lead to penalties, recovery notices of duties, stopping of the importation, compulsory destruction of the goods or the return of the goods to their place of origin with all of the costs that this would entail.
How are goods classified under a tariff heading?
Although classifying goods according to their tariff headings may seem ‘logical’, an expert knowledge of customs duties is required to do it correctly. Therefore, clients usually entrust this work to a customs agent.
The correct determination of the origin of the goods is also vital since this governs the application of reduced duties, as is the case with the Generalised System of Preferences (GSP) for example.
How is the origin of goods determined?
When goods are manufactured entirely in one country the origin is clear. If parts from other countries are used in the manufacture of goods or if manufacture takes place in several countries, then the origin is more difficult to establish. In such cases, the origin of the goods is determined by applying a number of criteria and regulations contained in customs legislation and summarised in this simple diagram: