At ameeting to resolve problems on theapplication of HS code for the exported Finger Joint Laminated Panelsin plate shape on August 5, Deputy Director General of the General Department of Vietnam Customs (GDVC)  LuuManhTuong directed Dong Nai Customs Department to allow Moc Cat Tuong Company to export Finger Joint Laminated Panels at a tax rate of 0%, but the company must commit to implement the final decision of competent authorities. 

Deputy Director General LuuManhTuong gave a statement at the meeting.
Photo: H.N

Deputy Director General of Vietnam Customs said that the GDVC is classifying Finger Joint Laminated PanelsunderHS code 4407299790(under heading 4407) with a tax rate of 15%, but the Vietnam Timber and Forest Product Association (VIFOREST)  and Moc Cat Tuong Company have proposed to classify this item into heading 4418 with a tax rate of 0%.

Accordingly, the Deputy Director General asked VIFOREST and Moc Cat Tuong Company to report the bases to prove the classification of this item into heading 4418 instead of heading 4407.

The representative of Moc Cat Tuong Company presented the process of producing Finger Joint Laminated Panels from rubber wood of the company, including 14 steps with modern production lines. According to Moc Cat Tuong Company, its Finger Joint Laminated Panels product is processed with a deeper level than the heading 4407, so the classification of this item into heading 4418 is consistent.

The company also stated that bases for classifying the Finger Joint Laminated Panels under heading 4418 is Circular 65/2017/TT-BTC on the list of import and export goods which defined joinery used inbuilding, including wood board, parquet panels under heading 4418.

Dao Thu Huong, Deputy Director of the Import and Export Tax Department, said that the heading 4407 has a wide range, including boards from wooden planks, excluding regulations on vertical or horizontal joints. Accordingly, if the product is not processed, the classification for this item into the heading 4407 is consistent.

Meanwhile, the heading 4418 applies to wooden structure used in building assembled products or unassembled parts.

“Products of aflat plate shape for different use purposes, which have not been identified asunassembled parts in a wooden structure or must be further processed to be consistent with the next use purposes, shall not be consistent with the heading 4418,”Huong said.

Nguyen Thi Minh Ngoc, Deputy Head of Tax Policy Department (the Ministry of Finance), said that the classification of HS code must comply with regulations of the World Customs Organization. Recently, the Ministry of Finance has received cases related to the anti-dumping tax imposed by the US and EU countries.

The reason that countries when applying this tax is that Vietnam has applied subsidies, including tax subsidies related to the application of HS code.

“Countries said that through enjoying tax benefits from applying HS code, enterprises will create products with lower price and compete with domestic products," Ngoc said.

Ngoc said that the compliance of regulations on code classification not only meets WTO’s provisions when Vietnam is a member of this organization but also helps enterprises fight allegations of anti-dumping by othercountries.

Huynh Thanh Quang, Vice Chairman of Viforest, proposed the General Department of Customs to allow the company to export Finger Joint Laminated Panels with a tax rate of 0%. If this tax rate is imposed, the company will pay later.

Deputy Director General LuuManhTuong said that with the product characteristics and production processes presented by the company, the classification of this item into heading 4418 is not really reasonable. However, the GDVC will record the comments and report to the competent authorities in a manner that does not cause changes in the company’s business production, and competent authorities will consider and make a decision to apply the appropriate HS code for this item. 

Tuong also shared difficulties of the company in seeking markets and orders in the current situation. However, the classification and application of goods codes must be conducted carefully. Because if we apply incorrect codes, the company will collect tax arrears and the State management authority has not fulfilled all itstasks.

Tuong also directed Dong Nai Customs Department to allow MocCat Tuong Company to export Finger Joint Laminated Panels with a tax rate of 0% to ensure fairness among businesses and avoid congestion of goods.

However, the company must commit to make the final decision of the competent authorities and the final decision will be applied to all businesses exporting this item.