REPORT CUSTOMS PROCEDURES THE PRACTICE THE HS CODES DETERMINATION OF YOGURT AND TEXBOOKS

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION INTERNATIONAL BUSINESS REPORT CUSTOMS PROCEDURES THE PRACTICE THE HS CODES DETERMINATION OF YOGURT AND TEXBOOKS Lecturer: Tran Nguyen Chat Class: 19DF0701 Group: Ho Chi Minh City, 20th October 2021 0 LIST OF GROUP MEMBERS Full name Student Duty Evaluation Signature ID Huynh Muoi Luy 719D0082 Introduction 100% Signed 100% Signed 100% Signed 100% Signed Conclusion Edit Picture Contribute Ideas Nguyen Thi Hong Ngoc 719D0105 Chapter Edit Picture Contribute Ideas Hinh Van Ty 719D0221 (leader) Nguyen Thi Thuy Vy Chapter Contribute Ideas 719C0108 Chapter Contribute Ideas 0 COMMENTS FROM LECTURER 0 TABLE OF CONTENTS INTRODUCTION CHAPTER 1: BRIEF INTRODUCTION OF THE HARMONIZED SYSTEM 1.1 Definition and structure of Harmonized System 1.2 The significance and objectives of Harmonized System 1.3 A summary of the HS Convention formation process 1.4 Review the six HS code applications rules: CHAPTER 2: ANALYSIS OF HS CODE DETERMINATION FOR SELECTED PRODUCTS 2.1 General introduction of selected products 2.1.1 Overview of TH True Milk Brand 2.1.2 Overview of Cengage VN, UEH University and Hong Duc Publishing House 10 2.2 The procedure for determining the HS code 11 2.2.1 HS code for TH True Milk Blueberry yogurt 12 2.2.2 Macroeconomics Textbook – N Gregory Mankiw 17 CHAPTER 3: FINDINGS 22 3.1 Advantages: 22 3.2 Difficulties: 22 3.3 Risks, experience gathering, and lessons learned: 23 CONCLUSION 24 INDEX OF REFERENCE 25 APPENDIX 26 PRODUCTS OF THE GROUP 26 0 LIST OF FIGURES Figure Results from the import and export tariff schedule 2021 – Yogurt 13 Figure Search results from Case Law – Yogurt 14 Figure Search results from Case Law – Yogurt 15 Figure HS code results of TH True Milk Blueberry yogurt 16 Figure Search results from import and export tariff schedule 2021 – Book 18 Figure Search results from Case Law – Book 19 Figure HS code result of Education Book 20 0 ACKNOWLEDGEMENT In order to complete the research project, our team would like to express our sincere and deepest thanks to Ms Chan Nguyen Chat for directly guiding and reminding our team during the implementation of the research topic to complete the research into a report At the same time, I would also like to thank my family and friends who have always encouraged and supported me during the completion of this thesis In the process of implementation, although we have tried to understand and absorb the contributions of teachers, teachers and friends, consult many domestic and foreign documents, the research content still cannot avoid shortcomings Omission Our team is looking forward to receiving comments from teachers, teachers and friends to improve this research topic 0 0 INTRODUCTION In the world today, along with the strong development of globalization and free trade, import and export in the field contribute a lot to the growth of the country's economy We urgently need the close coordination of stakeholders in the supply chain, including the intermediaries of Businesses, Logistics companies, and Customs procedures, to help goods clear orderly, safely, and quickly Therefore, the subject of Customs Operations has appeared in almost all universities, especially for students majoring in International Business With the orientation to be a young potential import-export specialist in the future, this subject plays a significant role for our students because it provides knowledge about the industry and helps us have new skills and specific practical skills to serve in future jobs In the first lesson, the lecturer will introduce the issue and related documents to facilitate students in self-study Following an overview of the content of the lessons, we will begin to learn how to classify goods using the Harmonized System (HS) - using numbers to classify things, and most countries around the world utilize it as a base to meet the needs of international trade In all the chapters studied, the group found the lesson on classifying goods by HS code quite interesting In addition, in practice, the HS system has organized more than 98% of goods traded on the market Global regulation of the World Customs Organization, this type of code helps us to know most of the goods information about codes, products, goods, it is built to become the "common language" of In international trade, it also plays an important role in the process of determining tax rates and helping goods to be cleared quickly as well as enjoy preferential treatment for member countries of free trade agreements, It is for these reasons that motivated my group to learn and choose as a practice topic To better understand this system, our team selected two products to learn and identify their HS codes Regarding the process, my group went to the supermarket and found two different types of goods The first product is in the F&B industry (TH True Milk Blueberry yogurt), and the other is in the education - stationery industry (Macroeconomics textbook) Regarding yogurt, this is one of the products from the TH True Milk brand - a brand of clean milk that comes from the standard fresh milk of the TH farm, and the Macroeconomics textbook product from Hong Duc Publishing House in collaboration with Cengage Learning Vietnam Co., Ltd and University of Economics Ho Chi Minh City (UEH) to import, translate and publish the Vietnamese version The content of this exercise is summarized in three main chapters: Chapter 1: Brief introduction of the Harmonized System In this chapter, the group will briefly introduce the concept of the Harmonized System, outline the HS convention, the importance of classifying goods by HS codes and recall the rules of applying HS codes learned in class 0 Chapter 2: Analysis of HS code determination for selected products From the introduction of concepts and rules learned in Chapter 1, in this chapter we will analyze and determine the HS code from the product that the group has chosen, which is TH True Milk Blueberry and Blueberry Yogurt and Textbook of Macroeconomics Chapter 3: Findings In the last chapter, the group will raise the issues that the group has drawn from the group discussion and summarize the advantages, difficulties, risks, experiences, and lessons when looking up the HS code 0 CHAPTER 1: BRIEF INTRODUCTION OF THE HARMONIZED SYSTEM 1.1 Definition and structure of Harmonized System The HS Code (Harmonized System Code) is a code used to identify imported and exported goods worldwide It is an internationally standardized system of names and codes used by the World Customs Organization - WCO to classify commodities on a global scale Basically, the Harmonized System (HS Code) structure includes several elements split from large to small as chapters, headings, sub-headings, tariff lines, and national tariffs Our country now uses an 8-digit HS code, although in some other countries, this number might be 10 or 12 digits long More specifically, there are 97 chapters in total, with chapters 98 and 99 being specific to each country, and the first two characters describing the general description of the commodities The next two letters are called Heading and are used to categorize products into common groups Sub-headings are grouped into more generic groups from the group, and each country determines the final Tariff line 1.2 The significance and objectives of Harmonized System Many stakeholders participating in the import and export process will profit from the proper use of HS codes for each type of commodity The most common role of the correct classification of HS codes for the management agency is to correctly identify the categories of goods, thereby providing how to apply taxes and the amount of tax that the Customs must collect import and export enterprises in order to contribute to the enforcement of domestic laws and international treaties; support for the analysis of micro, macro, and international trade negotiations In detail, The HS code's role is to ensure that firms comply with domestic and international legislation To begin with, HS codes assist us in classifying goods and determining the appropriate tax rate in accordance with state regulations Furthermore, businesses will be aware of all taxes that must be paid, avoiding the situation in which businesses that have to pay a lot of tax frequently have to go through tax refund procedures, which takes a lot of time and effort for stakeholders Finally, businesses benefit from free trade agreements (FTAs) in accordance with regulations The early preparation of procedures and the correct identification of the HS code can assist firms in making a good impression and reputation for Customs authorities, resulting in faster customs clearance of goods 0 Rule - items appear to be divided into several categories at first glance Similarly, there are separate annotations in rule three, but when the group carefully reads item 3a, it feels pretty acceptable, this part indicating that if the same item is specified in more than one group, the group with the most specific description takes precedence over those with a general description Considering this criterion, the product of my group is generally described on the packaging as TH true YOGURT Natural Blueberry, which differs from the market in that there is a clear distinction between eating yogurt and drinking yogurt., in the import and export tariff, people are only interested in the most specific group, which in the case of my group is yogurt As a result of this, my team has clearly determined its direction; here are the results: Figure Search results from Case Law – Yogurt As a result, the yogurt items in my group were correctly classified in heading 0403 rather than 0401 (Milk and cream that are not condensed and not have added sugar or other sweeteners) or 0402 (Concentrated milk and cream, as well as milk and cream containing added sugar or other sweetening substance) Because my group was satisfied with the preceding rule, rules four and five not need to be applied, so my group will go to rule six before making a final decision 15 0 Remembering rule 6, the classification of goods into group subheadings must be established in accordance with the content of each subheading, the necessary subheading notes, and the preceding rules with suitable changes of details, given that only subheadings of the same level can be compared Subject to these criteria, the applicable section and chapter notes also apply, unless the description in the subheading specifies otherwise To summarize, after reading and learning together rather attentively, the group has calculated the HS code of yogurt as: Figure HS code results of TH True Milk Blueberry yogurt Looking closely at Figure - the area is highlighted in yellow, it is easy to see that the subheading of this commodity is 040310; it is a liquid product, whether or not concentrated and has a complete HS code of 04031021 because this yogurt includes extra flavor, fruit (including pulp and jam), almonds, or chocolate, in this case, blueberries Below is an overview of the HS code structure of my group: Chapter 04 Heading 0403 16 0 Subheading 040310 Tariff Line 04031021 National Tariff N/A 2.2.2 Macroeconomics Textbook – N Gregory Mankiw Similarly, we establish the HS code of the textbook based on that method; of the six rules learned in class, the fourth rule is the most appropriate; the details of the entire process are provided below Step 1: Type "book" into the search box My group also ran a brief information search; here is some basic information regarding this commodity: • Macroeconomics - Principles of Macroeconomics 6E is the name of the product N Gregory Mankiw is the author • Roll packaging • Weight: 500-gram • The packaging measures 14.5 x 20.5 inches, and the number of pages is 500 • Paperback is the cover type • Goods applications include providing students with adequate academic materials for self-study, self-study, and review • Produced in Vietnam • Hong Duc International Standard Book Number (ISBN): 978-604-9927-34-8 Publisher: Hong Duc International Standard Book Number (ISBN): 978-604-992734-8 • Cengage Learning Vietnam Co., Ltd is an affiliate partner 17 0 • Interpreter: Faculty of Economics, Ho Chi Minh City University of Economics (UEH) After learning the basics of the product, the group went on to the next phase, which was to identify its HS code Step 2: Determine the HS code for the "Macroeconomics Textbook" product Rule - Chapter notes and identifiers The 2021 import and export tariff and the Case Law website are two resources As a result, my team discovered the following data: • Section X: wood pulp or other fibrous cellulosic material pulp; recovered (waste and scrap) paper or paperboard paper and paperboard articles • Chapter 49: manuscripts, typescripts, and plans; printed books, newspapers, photos, and other printing sector products Figure Search results from import and export tariff schedule 2021 – Book 18 0 Figure Search results from Case Law – Book However, as with yogurt goods, relying just on the section and chapter only allows my group to locate it in a generic sense; to get the particular HS code, we also rely on the more specific grouping, so my group will proceed to rule number two Rule - unfinished items and compounds in the same category As stated plainly in the first product - yogurt, all of the goods that my group decided to practice are finished products; no items are deemed unfinished or unassembled As a result, under rule two, my group's products not meet the standards and will be moved to rule number three Rule - items appear to be divided into several categories at first glance The third rule has two glossary items, which are as follows: • When goods are specified in more than one category, the category with the most explicit description takes precedence over those with a general description • Goods are made up of several different items, each of which may belong to a different category or chapter 19 0 Based on the preceding two items, my group believes that none of them are appropriate to define their product; it is only a book to read, not a product combining many diverse groups As a result, it is probable that the rule of three is also not satisfied and that the rule of four has to be more explicitly stated Rule - most similar goods This rule indicates that if goods cannot be classified using the preceding criteria, they must be classified under the heading that is most closely related to them More specifically, the footnote states that identification of the same can be based on a variety of variables, including the description, attributes, nature, and intended purpose of the items Based on this criterion, my group believes that this is the most appropriate In essence, it is similar to any other book in that it is used for reading, but the characteristics that distinguish it from other genres are because this is a specialized book, widely used in the field of education with the purpose of providing students with academic resources for self-study and research As a result, the HS code is now fully defined as follows: Figure HS code result of Education Book Although the rule of three was not met, my group chose to continue with the rule of four, however, if we look at the graphic above, we can see the difference between the headers, for example, 4901 are single-sheet or multi-sheet printed books, pamphlets, 20 0 pamphlets, and similar printed materials, whereas 4902 are newspapers, magazines, and periodicals, with or without graphics or advertising material In conclusion, the HS code for this product group has been determined to be: Chapter 49 Heading 4901 Subheading 490199 Tariff Line 49019910 National Tariff N/A 21 0 CHAPTER 3: FINDINGS 3.1 Advantages: During the process of looking up the HS code, my group tried their best to learn about how to apply the six rules of applying the HS code that she taught in class in combination with lecture slides as well as some information online Widely shared by vocational training centers or businesses on YouTube, websites, and blogs It is because of such abundant and detailed resources that the group can easily identify the HS codes of the two goods that they have chosen In addition, as far as I can see, currently, our import and export tariff schedules are constantly updated every year, which helps the search process to be more accurate because it can If there is a change from year to year, assuming that the information is not clearly updated or not widely shared on the forums, my group’s practice may face some disadvantages Finally, it is impossible not to mention the smooth coordination between my team members Thanks to the initiative, active cooperation, and knowledge exchange among members, this exercise of my group was completed despite still learning online due to the COVID-19 epidemic In the process of group discussion, each member complements each other’s knowledge, so although it is quite difficult for the first time, in general, my group has passed, maybe the analysis process in chapter two may not be accurate In the use of the rule, but my group has tried their best and we also look forward to your comments and suggestions so that the gaps in knowledge of the group can be improved 3.2 Difficulties: In terms of difficulty, the first two times my group applied the wrong code to the two goods that my group chose, specifically the chapter and group, we could easily find it, but when it came to the subheading part, it was because people divided it The categories of goods are so detailed that we don’t know which category to use and this takes a long time to find Besides, along with the strong development of technology, there are many items that are integrated with many uses, many components, etc., leading to difficulty in determining the HS code of the product Next, learning the theory and then applying the rules was also difficult because we just learned it for the first time and didn ’t have certain practical experience, so maybe the second part of the group will make mistakes because It’s also pretty much based on emotions And as mentioned above, currently in some areas, it is still difficult to distribute goods at supermarkets and convenience stores after the period of social distancing, so traveling as well as finding Buying products during this time is still relatively difficult 22 0 Finally, there are still cases of inconsistent use of HS codes for the same item, so it is difficult for groups of children to agree with each other Another difficulty that the group predicts in the future is that when doing procedures at the customs office, there may be many cases at the same branch, the same type of goods, but two different receiving officers They will guide to applying different HS codes leading to different tax rates There are goods that enterprises apply HS codes according to the instructions of customs officers when doing customs clearance procedures (for declarations of yellow channels and red channels) but then they are rejected by customs officers of the Customs Sub-department Other agencies check after customs clearance Although this is just a prediction, my team thinks this is a very likely case in the process of determining HS codes of businesses 3.3 Risks, experience gathering, and lessons learned: In terms of experience, there are now a number of popular Websites that can help you look up HS codes quickly such as the General Department of Customs, website bieuthue.net, or you can look up HS codes based on the import tariff schedule If the inspection is also fast and effective, you should use the parent file and the import tax schedule soft file that allows you to find the HS code However, the weakness of this method is that the excel file must be used to remove excel ’s search, by searching by pressing ctrl + f and entering the desired keyword The downside of this method is that excel searches are based on the exact phrase and not on a single word in the phrase Tax determination is also one of the important issues that businesses need to pay attention to and often make mistakes Businesses that try to apply the wrong HS code lead to the wrong tax rate, so determining the correct tax rate to avoid delays in tax payment and the delivery process will also be affected The simplest thing may be to ask the brothers and sisters in the industry Students themselves cannot know everything in the same industry and look up tax codes easily Some of you will know about these items, others will know about other items, but surely you won’t be able to know and remember them all Therefore, exchange and research together is also a way to be able to look up HS codes It will help increase efficiency when working with brothers and sisters in the profession for a long time This can be one of the effective ways to look up, we just need to find the right code and apply the correct code, then all the following procedures will be easier for us, check carefully not to be careless because this is also a work of patience 23 0 CONCLUSION Through the process of looking up the HS code, my team partly understood the work of Customs officers, and practiced to help us better understand its importance As a tool to help identify import and export goods for tax collection and law enforcement in the international environment, besides helping us analyze micro and macro strategies and serve as a basis for negotiation International commerce Thanks to the HS code, compliance with domestic and international laws is more focused It is also the basis to penalize businesses, avoiding the case that they are delayed in the delivery process, HS introduces strict laws that businesses must follow, is that they must be fined when they not comply, is they will receive benefits when the classification is correct 24 0 INDEX OF REFERENCE CASELAW VIịT NAM Hò thòng bÁn pháp luật, BÁn án – Hÿp đáng mẫu – Tra cứu mã HS Biểu thuế nhập khẩu, Thủ tāc thơng quan (https://caselaw.vn/) HÁi Quan Vißt Nam – General Department of Vietnam Customs (https://www.customs.gov.vn/) TTWTO VCCI – Biểu thuế xuất nhập Vißt Nam năm 2021 ( https://trungtamwto.vn/thong-ke/17056-bieu-thue-xuat-nhap-khau-viet-namnam-2021) CĀC HÀI QUAN THÀNH PHÞ Hà CHÍ MINH (http://hqhcm.gov.vn/) Thư vißn Văn bÁn quy ph¿m pháp luật (https://customs.gov.vn/Lists/VanBanPhapLuat/Default.aspx) TH true MILK – True Happiness ( https://www.thmilk.vn/) Cengage Asia: Higher Education, Digital Learning, Chinese Learning (https://www.cengageasia.com/) [FULL] Sáu (6) quy tắc tổng quát giÁi thích vißc phân lo¿i hàng hóa (https://www.eximshark.com/full-sau-6-quy-tac-tong-quat-giai-thich-viecphan-loai-hang-hoa/) Harmonized commodity description and coding system - WCO - 1996 & 2002 10 The Harmonized System Commodity DataBase 1996 & 2000 11 Công ước HS (Harmonized system) gì? Cơng ước HS đßi với nước phát triển 25 0 APPENDIX Products of the group 26 0 27 0 28 0 Demonstrated during discussion 29 0 ... for the National Council of Economic Research, as a consultant to the Office of The Budget of Congress and the Federal Reserve Of Boston, and the Board of Development and Testing of Members of. .. from the proper use of HS codes for each type of commodity The most common role of the correct classification of HS codes for the management agency is to correctly identify the categories of goods,... articles, some of which address the responsibilities of member nations, the application of HS independent territories, dispute resolution, and the work of the Customs Cooperation Council The HS Convention