TANZANIA REVENUE AUTHORITY TRA Classification of Textiles & Articles of Textiles Presented by; Edward Mwakimonga Lecturer (HS & Rules of Origin) Institute of Tax Administration (ITA) M/phone #: & WCO-TRA HARMONIZED SYSTEM (HS) WORKSHOP AT HARBOUR VIEW 10 TH TO 17 TH DECEMBER 2015

TANZANIA REVENUE AUTHORITY TRA OUTLINE OF THE LESSON INTRODUCTION STRUCTURE OF THE SECTION CLASSIFICATION TECHNIQUES CASE STUDIES

TANZANIA REVENUE AUTHORITY TRA GENERAL INTRODUCTION All internationally traded goods must be properly classified in accordance with the requirements of the governing principles of classification. Why such goods should be classified?

TANZANIA REVENUE AUTHORITY TRA To apply proper customs tariffs for collection of import/export duty and taxes and trade statistics; To determine the of Origin of goods and freight tariffs; To facilitate customs controls and trade negotiations.

TANZANIA REVENUE AUTHORITY TRA Thus, correct classification of goods requires:  A precise and thorough knowledge about the product to be classified,  A thorough knowledge about the principles of classification.  Adequate skills on how to apply such principles during classification.

TANZANIA REVENUE AUTHORITY TRA Textiles & Textile Articles-Section XI WHAT IS TEXTILE?

TANZANIA REVENUE AUTHORITY TRA Textile A textile is anything that is made up of fibres, yarns, or fabrics. Textiles surround us every day of our life Textiles are more than clothing, they are of different kind which are used in a wide range of products.

TANZANIA REVENUE AUTHORITY TRA Stages/Degree of manufacture textiles and textile articles F- F ibres (spinning) Y- Y arn(weaving, knitting) F- F abric(Cut, Make & Trim) C- C lothing (Made up article)

TANZANIA REVENUE AUTHORITY TRA Structure of section XI in the HS The section is built up by 14 chapters categorised in the following groups: Chapters 50 – 53: Natural fibres, yarns & woven fabrics [animal and vegetable origin) e.g. of cotton heading 52.07heading 52.12

TANZANIA REVENUE AUTHORITY TRA Chapters 54 & 55: Man-made fibres, yarns & woven fabrics (synthetic textiles) polyester staple fibres; synthetic filaments woven polyester woven filament Structure of section XI in the HS

TANZANIA REVENUE AUTHORITY TRA Chapters 56 – 59: Special fibres, yarns, fabrics & articles ( e.g. woven carpets chapter 57 ) Heading Chapter 60: Knitted fabrics: heading Structure of section XI in the HS

TANZANIA REVENUE AUTHORITY TRA Structure of section XI in the HS Chapter 61: Made up articles of apparel and clothing accessories (Knitted or crocheted) Knitted sweaters Chapter 62: Made up articlesof apparel and clothing accessories (Not knitted or crocheted) Women Not knitted jacket 62.04

TANZANIA REVENUE AUTHORITY TRA Chapter 63: Other made up articlesof apparel and clothing accessories (e.g. Blankets, rags, used shoes etc) Blanketsused shoes Structure of section XI in the HS

TANZANIA REVENUE AUTHORITY TRA Structure of section XI The section consists of section, chapter and subheading notes whose functions are : To define the terms, To limit or extend the scope of coverage and To give instructions on how to classify articles of textile which are mad up of mixed materials.

TANZANIA REVENUE AUTHORITY TRA Examples of legal notes Section Notes 2A gives instructions on how to classify woven fabrics of chapters with mixed materials that they should be classified as if consisting wholly of one of the textile material which predominates by weight over other materials. Chapter Note 1 to chapter 51 defines the terms "Wool" to means the natural fibre grown by sheep or lambs; Subheading note 2A to section XI gives instructions on how to classify articles of textiles from chapters 56 to 63.

TANZANIA REVENUE AUTHORITY TRA Chapter Note 1 to chapter 61 limits the chapter to cover only knitted/chrocheted apparels, while Chapter Note 1 to chapter 62 limits the chapter to cover only not knitted/chrocheted apparels.

TANZANIA REVENUE AUTHORITY TRA Classification Techniques What is classification of goods?

TANZANIA REVENUE AUTHORITY TRA Classification cont-- Classification of goods is the process of determining the HS Code Numbers at heading and subheading levels at which the product falls for the purpose of customs tariffs and trade statistics. Actually it is a process of finding a most specific description of goods in the Nomenclature.

TANZANIA REVENUE AUTHORITY TRA Classification cont-- Under the Harmonized System, commodities must be clearly distinguished from one another. For each commodity or category of commodities, only one heading or subheading should be applicable

TANZANIA REVENUE AUTHORITY TRA Classification cont-- Textiles and textile articles are classified by using a methodical approach as follows: Identify a product (know what you are classifying in terms of constructions i.e fibres, yarns, woven fabrics and knitted or not knitted garments) Consult the principles of classification ( in most cases GIR 1:Terms of the headings, legal notes) Find an appropriate HS Commodity Codes.

TANZANIA REVENUE AUTHORITY TRA Examples of classification Consider the classification of imported Printed woven fabrics weighing less than 200g/m2 and made up of: 45% by weight of cotton 25% by weight of synthetic staple fibres 30% by weight of synthetic filaments

TANZANIA REVENUE AUTHORITY TRA Classify by Methodical approach What is the product?- “identification” it is a woven fabric of different textile materials What is the principle of classifying woven fabrics made up of different textile materials? Section note 2A, 2Bb, 2Bc and 2Bd are applicable What is its appropriate heading and dash subheading for a woven fabric?

TANZANIA REVENUE AUTHORITY TRA Classify by Methodical approach 1. According to note 2Bb, “The choice of appropriate heading shall be effected by determining first the Chapter and then the applicable heading within that Chapter, disregarding any materials not classified in that Chapter”; Chapter Heading 45% cotton % synthetic staple fibres % synthetic filaments

TANZANIA REVENUE AUTHORITY TRA Classify by Methodical approach 2. According to section Note 2Bc, “When both Chapters 54 and 55 are involved with any other Chapter, Chapters 54 and 55 are to be treated as a single Chapter”; 25% synthetic staple fibres (55) plus 30% synthetic filaments (54) = 55% man made textile materials

TANZANIA REVENUE AUTHORITY TRA Classify by Methodical approach 3. According to section Note 2A, Goods classifiable in Chapters 50 to 55and of a mixture of two or more textile materials are to be classified as if consisting wholly of that one textile material which predominates by weight over any other single textile material. 45% cotton compared with 55% man made textile materials; man made materials predominate by weight over cotton materials.

TANZANIA REVENUE AUTHORITY TRA Cont % synthetic staple fibres compared with 30% synthetic filaments; synthetic filaments predominate by weight over staple fibres. Therefore the printed woven fabrics shall be classified in heading at a HS commodity code number

TANZANIA REVENUE AUTHORITY TRA CASE STUDIES 1. Consider the classification of imported printed woven fabrics weighing 250g/m2; made up of: 40% by weight of cotton 30% by weight of synthetic staple fibres 30% by weight of synthetic filaments

TANZANIA REVENUE AUTHORITY TRA Classify by Methodical approach What is the product?- “identification” it is a woven fabric of different textile materials What is the principle of classifying woven fabrics made up of different textile materials? Section note 2A, 2Bb, 2Bc and 2Bd are applicable What is its appropriate heading and dash subheading for a woven fabric?

TANZANIA REVENUE AUTHORITY TRA 1.According to note 2Bb, “The choice of appropriate heading shall be effected by determining first the Chapter and then the applicable heading within that Chapter, disregarding any materials not classified in that Chapter”; Chapter Heading 40% cotton % synthetic staple fibres % synthetic filaments

TANZANIA REVENUE AUTHORITY TRA 2. According to section Note 2Bc, “When both Chapters 54 and 55 are involved with any other Chapter, Chapters 54 and 55 are to be treated as a single Chapter”; 30% synthetic staple fibres (55) plus 30% synthetic filaments (54) = 60% man made textile materials

TANZANIA REVENUE AUTHORITY TRA 3.According to section Note 2A, Goods classifiable in Chapters 50 to 55and of a mixture of two or more textile materials are to be classified as if consisting wholly of that one textile material which predominates by weight over any other single textile material. If 40% cotton compared with 60% man made textile materials; man made materials predominate by weight over cotton materials.

TANZANIA REVENUE AUTHORITY TRA 4. If 30% synthetic staple fibres compared with 30% synthetic filaments; “ Section Note 2A; When no one textile material predominates by weight, the goods are to be classified as if consisting wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration”. Therefore the printed woven fabrics shall be classified in heading at a HS commodity code number

TANZANIA REVENUE AUTHORITY TRA 2.Determine the HS-Commodity code of T-shirts, Knitted or chrocheted made up of 65% by weight of cotton and 35% of polyester (man-made textile materials) “Give reasons to support your classification”

TANZANIA REVENUE AUTHORITY TRA According to subheading Note 2A to section XI, “Products of Chapters 56 to 63 containing two or more textile materials are to be regarded as consisting wholly of that textile material which would be selected under Note 2 to this Section for the classification of a product of Chapters 50 to 55 or of heading consisting of the same textile materials”.

TANZANIA REVENUE AUTHORITY TRA T-shirts are articles of Textile=section XI T-shirts are articles of knitted apparel= chapter 61 The product is described in a heading The product is specifically classified in subheading with HS code number T-shirts of cotton. Reasons 65% of cotton predominates by weight over man-made materials. Sub 2A & Sec 2A

TANZANIA REVENUE AUTHORITY TRA 3. Should the non knitted Garments put up in sets for retail sale, containing 1 suit, 1 shirt, 1 trousers be classified as set of suit in heading according to GIR 3(b)? YES or NO; give a reason to support your classification.

TANZANIA REVENUE AUTHORITY TRA NO Sec. XI, note 14, states that, “Unless the context otherwise requires, textile garments of different headings are to be classified in their own headings even if are put up in sets for retail sale. For the purposes of this Note, the expression " textile garments " means garments of headings to and headings to 62.11”.

TANZANIA REVENUE AUTHORITY TRA 4. Consider the classification of the following knitted garment (trousers of wool) at heading and sub-heading levels.

TANZANIA REVENUE AUTHORITY TRA Note 9 to chapter 61 states that, Garments which cannot be identified as either men's or boys' garments or as women's or girls' garments are to be classified in the headings covering women's or girls' garments. Therefore the garment in question shall be classified in heading 61.04

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