IV.

Tariff and Customs Code of 1978, as amended

This was expressly repealed by The Customs Modernization and Tariff Act
(CMTA) [RA No. 10863] which took signed on 30 May 2016, and was published on 01
June 2016.

A. Tariff and duties, defined

Tariffs or Custom duties is the name given to taxes on the importation and exportation of
commodities, the tariff or tax assessed upon merchandise imported from, or exported to, a
foreign country (Nestle Phils. vs. Court of Appeals, G.R. No. 134114, July 6, 2001).

Tariff Duty
Book of rates; rate of tax imposed upon Tax that is collected when goods are imported.
importation of goods.
Taxes on the importation or exportation of
List of articles liable to duties (Bouvier). List of commodities. These are dutieswhich are charged
schedule articles imposed upon the importation upon commodities on their being imported into
into the country, within the rates at which they or exported out of a country (1 Cooley 73)
are severally taxed.

Derivatively it refers to a system of imposing

duties or taxes on the importation of foreign
merchandise (Black Laws Dictionary)

B. General rule: all imported articles are subject to duty.

All articles, when imported from any foreign country into the Philippines, shall be subject to
duty upon each importation, even though previously exported from the Philippines, except as
otherwise specifically provided for in this Code or in other laws (Sec. 101, Tariff and Customs
Code).

Importation by the government taxable

All importations by the Government for its own use or that of its subordinate branches or
instrumentalities or owned or controlled by the Government, shall be subject to the duties,
taxes, fees and other charges provided for in the TCC [now CMTA] (Sec. 1205, TCCP; Sec.
406, CMTA).

Exemptions: The provisions of general and special laws, to the contrary notwithstanding,
including those granting franchises, there shall be no exemption whatsoever from the payment
of duties except:

1) as provided for in the CMTA

2) those granted to government agencies, instrumentalities or government-owned or

-controlled corporations (GOCCs) with existing contracts, commitments, agreements,
or obligations with foreign countries requiring such exemption;

3) those granted to international institutions, associations or organizations entitled to

exemption pursuant to agreements or special laws; and

4) those that may be granted by the President upon prior recommendation of the NEDA
in the interest of national economic development (Sec. 800, CMTA).

NOTE: UNDER OLD PROVISION, upon certification of the head of the

department or political subdivision concerned, with the approval of the Auditor
General, that the imported article is actually being used by the government or
any of its political subdivision concerned, the amount of duty, tax, fee or
charge is refunded to the entity which paid it (Sec. 1205, TCC).

1
C. Purpose for imposition
Tariff or customs duties are imposed for a special purpose:
1) to achieve some social or economic objectives; and
2) to protect local industries.

D. Flexible tariff clause Bar 2001

Constitutional basis: The Congress may, by law, authorize the President to fix, within
specified limits, and subject to such limitations and restrictions as it may impose tariff rates,
imports and export quotas, tonnage and wharfage dues; other duties or imposts within the
framework of the national development program of the Government.

Statutory basis: The power of the President upon recommendation 1 of the National Economic
and Development Authority (NEDA) to:

1) to increase, reduce or remove existing protective tariff rates of import duty,

but in no case shall be higher than one hundred percent (100%) ad valorem

Existing rates may be increased or decreased to any level, in one or several

stages
But in no case shall the increased rate of import duty be higher than a
maximum of one hundred percent (100%) ad valorem [Sec. 401(a)(1), TCC;
Sec. 1608 (a)(1), CMTA)

The power of the President to increase or decrease rates of import

duty within the limits fixed in subsection (a) shall include the authority
to modify the form of duty. In modifying the form of duty, the
corresponding ad valorem or specific equivalents of the duty with
respect to imports from the principal competing foreign country for the
most recent representative period shall be used as bases (Sec. 401(c),
TCC; Sec. 1608(c), CMTA).

2) Increase, reduce or remove existing protective rates of import duties

including any necessary change in classification [Sec. 401(a)(2), TCC; Sec.
1608 (a)(2), CMTA)]

3) Impose an additional duty on all imports:

Limit: not exceeding ten percent (10%) ad valorem whenever necessary;
Upon periodic investigations by the Commission and recommendation of the
NEDA, the President may cause a gradual reduction of protection levels
granted in Sec. 104 [rates of import duty granted in Section 1611] 2, including
those subsequently granted pursuant to this section. [Sec. 401(a)(3), TCC;
Sec. 1608 (a)(3), CMTA)]

1 Before any recommendation is submitted to the President by the NEDA pursuant to the provisions of this section,
except in the imposition of an additional duty not exceeding ten percent (10%) ad valorem, the Commission shall
conduct an investigation and shall hold public hearings wherein interested parties shall be afforded reasonable
opportunity to be present, to produce evidence and to be heard. The Commission shall also hear the views and
recommendations of any government office, agency, or instrumentality. The Commission shall submit its findings
and recommendations to the NEDA within thirty (30) days after the termination of the public hearings (Sec.
401(b), TCC; Sec. 1608(b), CMTA).

2 Maximum rate shall not exceed one hundred per cent (100%) ad valorem. (Sec. 104, TCC; Sec. 1611, CMTA)

2
 Application: there are three (3) grounds where the power may be exercised by the President:
[WES]: (1) General Welfare, (2) Interest of national Economy, (3) Interest of national Security

a) Any order issued by the President shall take effect thirty (30) days after
promulgation, EXCEPT in the imposition of additional duty not exceeding ten
percent (10%) ad valorem which shall take effect at the discretion of the President
[Sec. 401 (d), TCC; Sec. 1608 (d), CMTA].

b) Sec. 1608 (e) and (f) further limits the Presidents power to exercise the flexible
tariff clause: (i) the power delegated to the President shall be exercised only
when Congress is not in session; and (ii) may be withdrawn or terminated by
Congress through a joint resolution.

Flexible tariff clause vis--vis Discriminatory Duties

401 [1608] 304 [714]

Imposition of ad valorem duties
Both allow imposition of 100% ad valorem tax
Additional duties (on top of 100%)
Not more that 10% ad valorem duties Not more than 100% ad valorem duties
Effectivity
GR: 30 days from promulgation; XPN: No specific effectivity date
if additional duty does not exceed 10%
- discretion of the President.

E. Requirements of importation
1. Beginning and ending of importation Bar 1995
Importation begins from the time the carrying vessel or aircraft enters the Philippine
territorial jurisdiction with the intention to unload therein and ends at the time the goods
are released or withdrawn from the customhouse upon payment of the customs duties or
with legal permit to withdraw (Viduya vs. Berdiago, 73 SCRA 553).

The payment of the duties, taxes, fees and other charges must be in full. Merchandise, the
importation of which is effected contrary to law, is subject to forfeiture, and that goods
released contrary to law are subject to seizure and forfeiture (Mamalateo, Reviewer on
Taxation, 2014 Ed., p. 822).

Beginning
Importation begins when the carrying
vessel or aircraft enters the Philippine
territory with the intention to unload
therein. (Sec. 1202, TCC; Sec. 103,
CMTA)
Ending
Importation is deemed terminated when:
(a) The duties, taxes and other charges due
upon the goods have been paid or secured
to be paid at the port of entry unless the
goods are free from duties, taxes and other
charges and legal permit for withdrawal
has been granted; or

(b) In case the goods are deemed free of

duties, taxes and other charges, the goods
have legally left the jurisdiction of the
Bureau. (Sec. 1202, TCCP; Sec. 103,

3
 CMTA)

2. Obligations of importer
a) Cargo Manifest
Every vessel from a foreign port must have on board a complete manifest of
all its cargoes. It is the document used in shipping, containing a list of the
contents, value, origin, carrier and destination of the goods to be shipped
(Black Laws Dictionary)

All cargoes intended to be landed at a port in the Philippines must be

described in separate manifests for each port of call. Each manifest shall
include the port of departure and the port of delivery with the marks,
numbers, quantity, and description of the packages and the names of the
consignees. Every vessel from a foreign port must have on board complete
manifests of passengers and baggage, in the prescribed form, setting forth the
destination and all particulars required by immigration laws. Every vessel shall
present to the proper customs officers upon arrival in ports of the Philippines a
complete list of all sea stores then on board. If the vessel does not carry cargo
or passengers, the manifest must show that no cargo or passenger is carried
from the port of departure to the port of destination in the Philippines.

A cargo manifest shall in no case be changed or altered after entry of vessel,

except by means of an amendment, under oath, by the master, consignee or
agent thereof, which shall be attached to the original manifest; Provided, That
after the invoice and/or goods declaration covering an importation have been
received and recorded in the office of the appraiser, no amendment of the
manifest shall be allowed, except when it is obvious that a clerical error or any
other discrepancy has been committed in the preparation of the manifest,
without any fraudulent intent, the discovery of which would not have been
made until after examination of the importation has been completed. (Sec.
1021, TCCP; Sec. 1204, CMTA)

b) Import entry
Also known as Marine Entry and Internal Revenue Declaration
A declaration to the Bureau of Customs showing particulars of the imported articles
that will enable the customs authorities to determine the correct duties and internal
revenue taxes due on the importation. It must be accomplished from disembarking of
last cargo from vessel (Domondon, Bar Reviwer in Taxation, Vol 1, 7th ed., 2006,
p.506)

Sec. 1301, TCC Secs. 401 -402, CMTA

GR: All imported articles shall be subject to a GR: Importations Subject to Goods
formal or informal entry. Declaration: All imported goods shall be
subject to the lodgement4 of a goods
XPN: importations admitted free of duty under, declaration, unless otherwise provided for in
Section 105 (k)3 [donations/for account of duly this Act.
registered relief organizations]

3 Sec. 105 (k): Imported articles donated to, or for the account of, any duly registered relief organization, not
operated for profit, for free distribution among the needy, upon certification by the Department of Social Services
and Development or the Department of Education, Culture and Sports. as the case may be.

4 Lodgement refers to the registration of a goods declaration with the Bureau (Sec. 101 [dd], CMTA)

4
 Formal Entry
1) Commissioner may, upon instruction of the
Secretary of Finance, for the protection of
domestic industry or of the revenue,
require a formal entry, regardless of value,
whatever be the purpose and nature of
the importation
2) For immediate consumption, or under
irrevocable domestic letter of credit, bank
guarantee or bond for: (a) Placing the
article in customs bonded warehouse; (b)
Constructive warehousing and immediate
transportation to other ports of the
Philippines upon proper examination and
appraisal; or (c) Constructive warehousing
and immediate exportation.
3) Import entries under irrevocable domestic
letter of credit, bank guarantee or bond
shall be subject to the provisions of Title V,
Book 11 of this Code.
4) All importations entered under formal
entry shall be covered by a letter of credit
or any other verifiable document
evidencing payment. (R.A. 9135, April 27,
2001)
Informal Entry
Cleared on an informal entry whenever duty,
tax or other charges are collectible:
1) Articles of a commercial nature intended
for sale, barter or hire, the dutiable, value
of which is P2,000.00 or less
2) Personal and household effects or articles,
not in commercial quantity, imported in
passenger's baggage, mail or otherwise,
for personal use.
NOTE: Under Section 1301 of the TCCP, imported articles must be entered within a
5 Every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust this amount as
provided herein to its present value, using the Consumer Price Index (CPI) as published by the PSA. The
Commissioner may adjust the value of goods of commercial nature that shall be cleared through an informal entry
process without prejudice to the periodic adjustment period.
5
Formal Entry
All goods declaration for consumption shall
be cleared through a formal entry process.
All importations entered through, a formal
entry process shall be covered by a letter of
credit or any verifiable commercial
document evidencing payment or in cases
where there is no sale for export, by any
commercial document indicating the
commercial value of the goods.
Consumption entry: a government form
accompanied by an importer or his
representative, which is ultimately submitted
to the proper office of the BOC, as basis for
inspection of the importations of the correct
customs duties and internal revenue taxes
due on importation (Hantex Trading Co.,
Inc. v. CIR, CA-GR No. 47172, September
20, 1998)
Informal Entry
The following goods which shall be cleared
through an informal entry process:
1) Goods of a commercial nature with
Free on Board (FOB) or Free Carrier
Act (FCA) value of less than fifty
thousand pesos (50,000.00).5
2) Personal and household effects or
goods, not in commercial quantity,
imported in a passengers baggage or
mail.
 non-extendible period of 30 days from the date of discharge of the last package from a
vessel. Otherwise, the BOC will deem the imported goods impliedly abandoned under
Section 1801 (Chevron Philippines vs. Commissioner of the Bureau of Customs, G.R.
No. 178759, August 11, 2008).

c) Declaration of correct weight or value

Declaration of the Import Entry: Except in case of informal entry, no entry

of article shall be effected until there shall have been submitted to the
collector a written declaration under penalties of falsification or perjury, in
such form as shall be prescribed by the Commissioner, containing statements
in substance as follows:

a) That the entry delivered to the Collector contains a full account of

the value or price articles, including subject of the entry;

b) That the invoice and entry contain a just and faithful account of the
value or price of said articles including and specifying the value of
all containers or coverings, and that nothing has been omitted,
therefrom or concealed whereby the government of the Republic of
the Philippines be defrauded of any part of the duties lawfully due
on the articles (Sec. 1304, TCCP).

Where the entry is filed by a party other than the importer, said importer shall
himself be required to declare under oath and under the penalties of
falsification or perjury that the declarations and statements contained in the
entry are true and correct (Sec. 1301, TCCP, as amended by R.A. 7651)

Discrepancy Between Actual and Declared Weight of Manifested

Article.: If the gross weight of any article or package described in the
manifest exceeds by more than twenty (20) percentum the gross weight as
declared in the manifest or bill of lading thereof, and the Collector shall be of
the opinion that such discrepancy was due to the carelessness or
incompetency of the master or pilot in command, owner or employee of the
vessel or aircraft, a fine of not more than fifteen (15) percentum of the value
of the package or article in respect to which the deficiency exists, may be
imposed upon the importing vessel or aircraft. (Sec. 2523, TCCP)

UNDER THE CMTA

Rights and Responsibilities of the Declarant/Licensed Custom Broker:

a) Declarant shall be responsible for the accuracy of the goods
declaration and for the payment of all duties, taxes and other
charges due on the imported goods.
b) Licensed customs broker shall likewise be responsible for the
accuracy of the goods declaration but shall not be responsible for the
payment of duties, taxes and other charges due on the imported
goods.
c) The declarant shall sign the goods declaration, even when assisted
by a licensed customs broker, who shall likewise sign the goods
declaration. (Sec. 107, CMTA)

Penalties for Errors in Goods Declaration: The Bureau shall not impose
substantial penalties for errors when such errors are inadvertent and there
was no fraudulent intent or gross negligence in the commission thereof:

6
 Provided, That in order to discourage repetition of such errors, a penalty may
be imposed hut shall not be excessive (Sec. 108, CMTA).

Undervaluation, Misclassification and Misdeclaration in Entry.

TCCP
Error Surcharge
1. When the dutiable value of the imported articles shall be so Not less than the difference between
declared and entered that the duties, based on the declaration of the full duty and the estimated duty
the importer on the face of the entry would be less by ten percent based upon the declaration of the
(10%) than importers description on the face of the entry than importer, nor more than twice of such
should be legally collected based on the tariff classification difference
2. When the dutiable weight, measurement or quantity of imported Not less than the difference between
articles is found upon examination to exceed by ten percent the full duty and the estimated duty
(10%) or more than the entered weight, measurement or based upon the declaration of the
quantity importer, nor more than twice of such
difference
3. Misdeclaration in 50 weight, measurement or quantity of more 1. Prima facie evidence of fraud
than thirty percent (30%) between the value, weight, under Section 2530 (infra.) of the
measurement or quantity declared in the entry, and the actual TCCP;
value, weight, quantity, or measurement 2. Any misdeclaration or undeclared
imported article/items found
upon examination shall ipso facto
be forfeited in favor of the
Government to be disposed of

4. Misdescription, misclassification or misdeclaration in the import 3. Importer shall be subject to penal

entry is intentional provision under Section 3602 of
this Code6

(Sec. 2503,TCCP, as amended by R.A. 7651, June 04, 1993).

CMTA
Error Surcharge
Misdeclaration
1. Misdeclaration as to quantity, quality, description, weight, or 250% of the duty and tax due.
measurement of the goods, or misclassification through insufficient
or wrong description of the goods or use of wrong tariff heading
resulting to a discrepancy in duty and tax to be paid between what
is legally determined upon assessment and what is declared
2. Discrepancy in duty is less than ten percent (10%) No surcharge

6 Sec 3602. Various Fraudulent Practices Against Customs Revenue. - Any person who makes or attempts to make
any entry of imported or exported article by means of any false or fraudulent invoice, declaration, affidavit, letter,
paper or by any means of any false statement, written or verbal, or by any means of any false or fraudulent
practice whatsoever, or knowingly effects any entry of goods, wares or merchandise, at less than true weight or
Measures thereof or upon. a false classification as to quality or value, or by the payment of less than the amount
legally due, or knowingly and willfully files any false or fraudulent entry or claim for the payment of drawback or
refund of duties upon the exportation of merchandise, or makes or files any affidavit abstract, record, certificate or
other document, with a view to securing the payment to himself or others of any drawback, allowance, or refund of
duties on the exportation of merchandise, greater than that legally due thereon, or who shall be guilty of any willful
act or omission shall, for each offence, be punished in accordance with the penalties prescribed in the preceding
section.

7
3. Declared tariff heading is rejected in a formal customs dispute No surcharge
settlement process involving difficult or highly technical question of
tariff classification
4.
5. Tariff classification declaration relied on an official government No surcharge
ruling

Error Surcharge
Undervaluation7
1. Established without the need to go through the formal dispute 250%
settlement process

2. Discrepancy in duty is less than ten percent (10%) No surcharge

3. Declared value is rejected as a result of an official ruling or decision No surcharge

under the customs dispute settlement process involving difficult or
highly technical question relating to the application of customs
valuation rules.
Fraudulent /Intentional8
1. Misdeclaration 1. 500% of the duty and tax due
2. Misclassification 2. Seizure regardless of the
3. Undervaluation amount of the discrepancy
3. Application of fines or penalties
against the importer and other
person or persons who willfully
participated in the fraudulent
act.

d) Liability for payment of duties

Unless relieved by laws or regulations, the liability for duties, taxes, fees, and
other charges attached to importation constitutes a personal debt due and
demandable against the importer in favor of the government and shall be
discharged only upon payment of duties, taxes, fees and other charges. It also
constitutes a lien on the imported goods which may be enforced while such
goods are under customs' custody [or subject to the control of the
government]. (Sec. 1204, TCCP; Sec. 405, CMTA).

e) Liquidation of duties

Liquidation and Record of Entries: If the Collector shall approve the returns
of the appraiser and the report of the weights, gauge or quantity, the
liquidation shall be made on the face of the entry showing the particulars

7 There is undervaluation when: the declared value fails to disclose in full the price actually paid or
payable or any dutiable adjustment to the price actually paid or payable; or
b) when an incorrect valuation method is used or the valuation rules are not properly observed, resulting in a
discrepancy in duty and tax to be paid between what is legally determined as the correct value against the
declared value.

8 False or altered document is submitted or when false statements or information are knowingly made. A
discrepancy in duty and tax to be paid between what is legally determined and what is declared amounting to more
than thirty percent (30%) shall constitute a prima facie evidence of fraud.

8
 thereof, initiated by the customs assessor, approved by the chief customs
assessor, and recorded in the record of liquidations. A daily record of all entries
liquidated shall be posted in public corridor of the customhouse, name of the
vessel or aircraft, the port from which she arrived, the date of her arrival, the
name of the importer, and the serial number and the date of the entry. The
daily record must also be kept by the collector of all additional duties, taxes
and other charges found upon liquidation, and notice shall promptly the
interested parties. (Sec. 1601, TCCP)

Tentative Liquidation: If to determine the exact amount due under the law
in part some future action is required, the liquidation shall be deemed to be
tentative as to the item or items affected and shall to that extent be subject to
future and final readjustment and settlement within a six (6) months from
date of tentative liquidation. The entry in such case shall be stamped
liquidation. (Sec. 1602, TCCP;)

[BAR 2013] Finality of Liquidation (SEC. 1603, TCCP as amended by R.A.

9135): When articles have been entered and passed free of duty or final
adjustments of duties made, with subsequent delivery, such entry and passage
free of duty or settlements of duties will, after the expiration of three (3)
years from the date of the final payment of duties, be final and conclusive
upon all parties:

In the absence of:

1. fraud
2. protest
3. compliance audit
Unless the liquidation of the import entry was merely tentative.

f) Keeping of records

Audit and Examination of Records (Sec. 1000, CMTA) Within three (3) years
from the date of final payment of duties and taxes or customs clearance, as the
case may be, the Bureau may conduct an audit examination, inspection,
verification, and investigation of records pertaining to any goods declaration, which
shall include statements, declarations, documents, and electronically generated or
machine readable data, for the purpose of ascertaining the correctness of the
goods declaration and determining the liability of the importer for duties, taxes
and other charges, including any fine or penalty, to ensure compliance with this
Act.

Requirement to Keep Records (Sec. 1003, CMTA):

(a) All importers are required to keep at their principal place of business, in
the manner prescribed by regulations to be issued by the Commissioner
and for a period of three (3) years from the date of final payment of duties
and taxes or customs clearance, as the case may be, all records pertaining
to the ordinary course of business and to any activity or information
contained in the records required by this title in connection with any such
activity.

(b) All parties engaged in customs clearance and processing are required to

9
 keep at their principal place of business, in the manner prescribed by
regulations to be issued by the Commissioner and for a period of three (3)
years from the date of filing of the goods declaration, copies of the
aboveraentioned records covering the transactions handled.

(c) Locators or persons authorized to bring imported goods into free zones,
such as the special economic zones and free ports, are required to keep
subject-records of all its activities, including in whole or in part, records on
imported goods withdrawn from said zones into the customs territory for a
period of three (3) years from the date of filing of the goods declaration.

(d) Failure to keep the records required by this Act shall constitute a waiver of
this right to contest the results of the audit based on records kept by the
Bureau.

Sec. 710, TCCP Sec. 210, CMTA

Collectors, assistant collectors,
deputy collectors, surveyors, and
other customs officials acting in
such capacities are required to keep
true, correct and permanent records
of their official transactions, to
submit the same to the inspection of
authorized officials at all times, and
to turn over all records and official
papers to their successors or other
authorized officials
District Collectors, Deputy District
Collectors, and customs officers
acting in such capacities must
maintain permanent records of
official transactions and turn-over all
records and official papers to their
respective successors or other
authorized officials. The records shall
be made available for inspection by
other authorized officials of the
Bureau.

If required, the District Collector

shall affix the official dry seal of the
Bureau on all documents and records
requiring authentication.

F. Importation in violation of tax credit certificate

1. Smuggling [Bar 1994, 2013]

Any person who shall fraudulently import or export or bring into or outside of the Philippines any
goods, or assist in so doing, contrary to law, or shall receive, conceal, buy, sell, or in any manner
facilitate the transportation, concealment, or sale of such goods after importation, or shall commit
technical smuggling.

Kinds Elements
(1) Fraudulent smuggling a. Bringing an article into the country from the outside;
b. There must be intentional fraud, consisting of deception, willfully and
deliberately dared or resorted to in order to give up some right

(2) Degree of participation in the a. Assists in bringing into the country from the outside any article
commission of unlawful contrary to law
importation

(3) Accused found to have a. Receive, conceal, buy, sell, or in any manner facilitate the
possession of dutiable articles transportation, concealment, or sale of such article after importation
inside the airport premises b. Knowing the same to have been imported contrary to law

(4) Technical smuggling Act of importing goods into the country by means of fraudulent, falsified or

10

(Sec. 3601, TCCP; Sec. 1401, CMTA;Tomas Salvador v. People, in Mamalateo, 2014, p. 843; Jardeleza vs.
People,G.R. No. 165265, February 6, 2006 citing Rodriguez vs. Court of Appeals, G.R. No. 115218, September 18,
1995, 248 SCRA 288, 296)
2. Other fraudulent practices
Various Fraudulent
Practices Against Customs
Revenue
(Sec. 3602, TCCP)
Other Fraudulent Practices
Against Customs Revenue
(Sec. 1403, CMTA)
erroneous declaration of the goods to its nature, land, quality, quantity or
weight, for the purpose of reducing or avoiding payment of prescribed
taxes, duties and other charges
There is smuggling when new motor vehicles were declared as used truck
replacement parts. Under Sec. 1203, TCCP, the owner of the imported
articles is the consignee. The law created presumption of ownership.
Whether or not the accused participated in the preparation of the of the bill
of land is immaterial to disprove ownership of said articles, for the law
created a presumption of ownership. Therefore, it is imperative for Sayson
to disprove ownership of said articles by showing proof to the contrary.
(People v. Sayson, CTA Criminal Case, December 12, 2012).
Any person who:
1. Makes or attempts to make any entry of imported or exported article by
means of:
a. any false or fraudulent invoice, declaration, affidavit, letter, paper
or by any means of any false statement, written or verbal, or
b. any false or fraudulent practice whatsoever, or
2. Knowingly effects any entry of goods, wares or merchandise
a. At less than true weight or measures thereof or upon a false
classification as to quality or value, or
b. By the payment of less than the amount legally due
3. Knowingly and willfully files any false or fraudulent entry or claim for the
payment of drawback or refund of duties upon the exportation of
merchandise
4. Makes or files any affidavit abstract, record, certificate or other document,
with a view to securing the payment to himself or others of any drawback,
allowance, or refund of duties on the exportation of merchandise, greater
than that legally due thereon
5. Shall be guilty of any willful act or omission
Any person who makes or attempts to make any entry of imported or exported
goods by means of any false or fraudulent statement, document or practice or
knowingly and willfully files any false or fraudulent claim for payment of
drawback or refund of duties shall, for each act, be punished in accordance
with the penalties prescribed in Section 1401 (supra) of the CMTA.
11
G. Classification of goods
1. Taxable importation
All articles, when imported from any foreign country into the Philippines, shall be
subject to duty upon each importation, even though previously exported from the
Philippines, except as otherwise specifically provided for in this Code or in other
laws (Sec. 100, TCCP; Sec. 104, CMTA).

2. Prohibited importation [WINGS]:

W Weapons of War 1. Dynamite, gunpowder, ammunitions and other explosives,
firearms and weapons of war, and parts thereof, except when
authorized by law. (Omitted in CMTA)
I Insidious, immoral, 2. Written or printed articles in any form containing any matter
obscene articles advocating or inciting treason, or rebellion, insurrection, sedition
or subversion against the Government of the Philippines, or
forcible resistance to any law of the Philippines, or containing
any threat to take the life of, or inflict bodily harm upon any
person in the Philippines.
3. Written or printed articles, negatives or cinematographic film,
photographs, engravings, lithographs, objects, paintings,
drawings or other representation of an obscene or immoral
character.
4. Articles, instruments, drugs and substances designed, intended
or adapted for producing unlawful abortion, or any printed
matter which advertises or describes or gives directly or
indirectly information where, how or by whom unlawful abortion
is produced.
5. Any article manufactured in whole or in part of gold, silver or
other precious metals or alloys thereof, the stamps, brands or
marks or which do not indicate the actual fineness of quality of
said metals or alloys.
N Narcotics and other 6. Marijuana, opium, poppies, coca leaves, heroin or any other
prohibited narcotics or synthetic drugs which are or may hereafter be
substances, declared habit forming by the President of the Philippines, or any
compound, manufactured salt, derivative, or preparation thereof,
paraphernalia
except when imported by the Government of the Philippines or
any person duly authorized by the Dangerous Drugs Board, for
medicinal purposes only.
7. Opium pipes and parts thereof, of whatever material.

G Gambling devices 8. Roulette wheels, gambling outfits, loaded dice, marked cards,
machines, apparatus or mechanical devices used in gambling or
the distribution of money, cigars, cigarettes or other articles
when such distribution is dependent on chance, including jackpot
and pinball machines or similar contrivances, or parts thereof.
9. Lottery and sweepstakes tickets except those authorised by the

12
 Philippine Government, advertisements thereof, and lists of
drawings therein.

S Prohibited under 10. Any adulterated or misbranded articles of food or any

Special law adulterated or misbranded drug in violation of the provisions of
the "Food and Drugs Act " [relevant laws and regulations].
11. Infringing goods as defined under the Intellectual Property Code
and related laws; and
12. All other goods or parts thereof which importation and
exportation are explicitly prohibited by law or rules and
regulations issued by the competent authority.

(Sec. 101, TCCP; Sec. 118, CMTA)

3. Conditionally-free importation (duty free) [SAReP]:

The following goods shall be exempt from the payment of import duties upon
compliance with the formalities prescribed in the regulations which shall be
promulgated by the Commissioner with the approval of the Secretary of Finance:

S Supply; Samples; Shooting, entertainment and exhibition

R 1. Goods [Articles] brought by foreign film producers directly and exclusively used for
making or recording motion picture films on location in the Philippines, upon
their identification, examination and appraisal and the giving of a security [bond] in an
amount equal to one and 100% [one -half times] the ascertained duties, taxes and
other charges thereon, conditioned for exportation thereof or payment of the
corresponding duties, taxes and other charges within six (6) months from the date of
acceptance of the import entry, unless extended by the Collector of Customs or another
six (6) months;

Photographic and cinematographic films, underdeveloped, exposed outside the

Philippines by resident Filipino citizens or by producing companies of Philippine registry
where the principal actors and artists employed for the production are Filipinos, upon
affidavit by the importer and identification that such exposed films are the same films
previously exported from the Philippines. As used in this paragraph, the terms "actors "
and "artists " include the persons operating the photographic camera or other
photographic and sound recording apparatus by which the film is made.
E 2. (a) Goods [Articles] used exclusively for public entertainment, and for display in
public expositions, or for exhibition or competition for prizes, and devices for projecting
pictures and parts and appurtenances thereof:
upon identification, examination, and appraisal and the giving of a security [bond]
in an amount equal to 100% [one and one -half times] of the ascertained duties,
taxes and other charges thereon, conditioned for exportation thereof or payment of
the corresponding duties, taxes and other charges within six (6) months from the
date of acceptance of the import entry; Provided, That the Collector of Customs
may extend the time for exportation or payment of duties, taxes and other charges
for a term not exceeding six (6) months from the expiration of the original period;
and
b.
(b) Technical and scientific films when imported by technical, cultural and scientific
institutions, and not to be exhibited for profit: Provided, further, That if any of the said
films is exhibited for profit, the proceeds therefrom shall be subject to confiscation, in
addition to the penalty provided under [Section Thirty -six hundred and ten as
amended, of this Code] the CMTA
S 3. Supplies which are necessary for the reasonable requirements of the vessel or
aircraft in her voyage or flight outside the Philippines, including articles
transferred from a bonded warehouse any collection district to any vessel or aircraft
engaged in foreign trade, for use or consumption the passengers or its crew on
board such vessel or aircrafts as sea or air stores; or article purchased abroad for
sale on board a vessel or aircraft as saloon stores or air store supplies
Surplus or excess of such vessel or aircraft supplies arriving from foreign ports or
airports shall be dutiable.
S 4. Samples of the kind, in such quantity and of such dimension or construction as

13
 to render them unsalable or of no appreciable commercial value; models not
adapted for practical use; and samples of medicines, properly marked "sample-sale
punishable by law", for the purpose of introducing a new article in the Philippine market
and imported only once in a quantity sufficient for such purpose by a person duly
registered and identified to be engaged in that trade

Sample medicines
Previously authorized by the Secretary of Finance
New medicines not available in the Philippines
Not previously authorized and/or properly marked in accordance with this
section shall be levied the corresponding tariff duty.

Commercial Samples:
Commercial samples the value of any single importation of which does not
exceed FCA value of 50,000.009 [P10,000] upon the giving of a security[bond]
in an amount equal to [twice] the ascertained duties, taxes and other charges
thereon, conditioned for the exportation of said samples within 3 [6] months
from the date of the acceptance of the goods declaration [import entry] or in
default thereof, the payment of the corresponding duties, taxes and other
charges.
If the FCA value of any single consignment of such commercial samples
exceeds 50,000.00 [P10,000], the importer thereof may select any portion of
same not exceeding [in] the FCA value of 50,000.00 [P10,000] for entry
under the consumption, as the importer may elect
EXCEPTION: those that are not readily and easily identifiable as in the case of
[(e.g.,] precious and semi -precious stones, cut or uncut, and jewelry set with
precious or semi-precious stones,
S 5. Spare parts of vessels or aircraft of foreign registry engaged in foreign trade
when brought into the Philippines exclusively as replacements or for the
emergency repair thereof, upon proof satisfactory to the District Collector [of
Customs] that such spare parts shall be utilized to secure the safety,
seaworthiness or airworthiness of the vessel or aircraft, to enable it to
continue its voyage or flight.
T 6. Trailer chassis when imported by shipping companies:
for their exclusive use in handling containerized cargo,
upon posting a security [bond] in an amount equal to 100% [one and one
- half times] the ascertained duties, taxes and other charges due thereon
to cover a period of 1 year from the date of acceptance of the entry, which
period for meritorious reasons may, be extended by the Commissioner of
Customs from year to year, subject to the following conditions:
a. That they shall be properly identified and registered with the Land
Transportation Commission;
b. That they shall be subject to customs supervision fee to be fixed

9 Provided, Further, That every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust
the amount herein stated to its present value using the CPI as published by the PSA.

14
 by the District Collector [of Customs] and subject to the approval
of the Commissioner of Customs;
c. That they shall be deposited in the customs [zone] territory when
not in use; and
d. That upon the expiration of the period prescribed above, duties
and taxes shall be paid unless otherwise re-exported.
M 7. Machineries, equipment, tools for production, plants to convert mineral ores
into saleable form, spare parts, supplies, materials, accessories, explosives,
chemicals, and transportation and communication facilities imported by and
for the use of new mines and old mines which resume operations, when
certified to as such by the Secretary of [Agriculture] the Department of
Environment and Natural Resources (DENR) upon the recommendation of the
Director of Mines and Geosciences Bureau, for a period ending five (5) years
from the first date of actual commercial production of saleable mineral
products:
Such articles are not locally available in reasonable quantity, quality and
price and are necessary or incidental in the proper operation of the mine;
Aircrafts imported by agro-industrial companies to be used by them in
their agriculture and industrial operations or activities, spare parts and
accessories thereof, when certified to as such by the Secretary of the
Department of Agriculture (DA) or the Secretary of the Department of
Trade and Industry (DTI), as the case may be;
A 8. Aircraft, equipment and machinery, spare parts commissary and catering
supplies, aviation gas, fuel and oil, whether crude or refined except when
directly or indirectly used for domestic operations, and such other articles or
supplies imported by and for the use of scheduled airlines operating under
congressional franchise:
Articles or supplies must not be locally available in reasonable quantity,
quality and price and are necessary or incidental for the proper operation
of the scheduled airline importing the same;
C 9. Containers, holders and other similar receptacles of any material including kraft
paper bags for locally manufactured cement for export, including corrugated boxes for
bananas, mangoes, pineapples and other fresh fruits for export, except other containers
made of paper, paperboard and textile fabrics, which are of such character as to be
readily identifiable and/or reusable for shipment or transportation of goods shall be
delivered to the importer thereof upon identification, examination and appraisal and the
giving of a security in an amount equal to 100% [equal to one and one -half times] of
the ascertained duties, taxes and other charges thereon, within six (6) months from the
date of acceptance of the goods declaration.

A Animals, plants for experimentation

A 1. Aquatic products such as fishes, crustaceans, mollusks, marine animals, seaweeds, fish
oil, roe, caught or gathered by fishing vessels of Philippine registry; 10
A 2. Animals, except race horses, and plants for scientific, experimental,
propagation, botanical, breeding, zoological and national defense purposes:
No live trees, shoots, plants, moss, and bulbs, tubers and seeds for
propagation purposes may be imported under this section, except by
order of the Government or other duly authorized institutions:
Free entry of animals for breeding purposes shall be restricted to animals
of recognized breed duly registered in the book of record established for
that breed, certified as such by the Bureau of Animal Industry (BAI)

10 Provided, That they are imported in such vessels or in crafts attached thereto; Provided, However, That they
have not been landed in any foreign territory or, if so landed, that they have been landed solely for transshipment
without having been advanced in condition;

15
 Certificate of such record, and pedigree of such animal duly authenticated
by the proper custodian of such book of record, shall be produced and
submitted to the District Collector [of Customs], together with affidavit of
the owner or importer, that such animal is the animal described in said
certificate of record and pedigree:
Animals and plants are certified by the NEDA as necessary for economic
development.

R Repair and recondition; rescue; relief; returned

C 1. Cost of repairs, excluding the value of the article used, made in foreign countries upon
vessels or aircraft documented, registered or licensed in the Philippines 11
U 2. Equipment for use in the salvage of vessels or aircrafts, not available locally12
R 3. Goods brought into the Philippines for repair, processing or reconditioning to be
reexported upon completion of the repair, processing or reconditioning. 13

11 Upon proof satisfactory to the Collector of Customs (1) that adequate facilities for such repairs arenot afforded
in the Philippines, or (2) that such vessels or aircrafts, while in the regular course of her voyage or flight, was
compelled by stress of weather or other casualty to put into a foreign port to make such repairs in order to secure
the safety, seaworthiness or airworthiness of the vessel or aircraft to enable her to reach her port of destination;
[Excluded under the CMTA: Articles brought into the Philippines for repair, processing or reconditioning to be re-
exported upon completion of the repair, processing or reconditioning: Provided, That the Collector of Customs shall
require the giving of a bond in an amount equal to one and one -half times the ascertained duties, taxes and other
charges thereon, conditioned for the exportation thereof or payment of the corresponding duties, taxes and other
charges within six (6) months from the date of acceptance of the import entry.]

12 Upon identification and the giving of a bond in an amount equal to [one and one -half times] 100% of the
ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof or payment of
corresponding duties, taxes and other charges within six (6) months from the date of acceptance of the import
entry: Provided, That the Collector of Customs may extend the time for exportation or payment of duties, taxes
and other charges for a term not exceeding six (6) months from the expiration of the original period.

13 Provided, That the Bureau shall require security equal to one hundred percent (100%) of the duties, taxes and
other charges thereon, conditioned for the exportation thereof or payment of the corresponding duties, taxes and
other charges within six (6) months from the date of acceptance of the goods declaration.

16
 R 4. Goods and salvage from vessels recovered after a period of two (2) years from the
date of filing the marine protest or the time when the vessel was wrecked or
abandoned, or parts of a foreign vessel or its equipment, wrecked or abandoned in
Philippine waters or elsewhere: Provided, That goods and salvage recovered within the
said period of two (2) years shall be dutiable;
R 5. Philippine articles previously exported from the Philippines and returned
without having been advanced in value or improved in condition by any process
of manufacture or other means, and upon which no drawback or bounty has been
allowed, including instruments and implements, tools of trade, machinery and
equipment, used abroad by Filipino citizens in the pursuit of their business, occupation
or profession; and

Foreign articles previously imported when returned after having been exported
and loaned for use temporarily abroad solely for exhibition, testing and
experimentation, for scientific or educational purposes; and

Foreign containers previously imported which have been used in packing

exported Philippine articles and returned empty if imported by or for the account
of the person or institution who exported them from the Philippines and not for sale,
barter or hire subject to identification:

Provided, That any Philippine article falling under this subsection upon which drawback
or bounty has been allowed shall, upon reimportation thereof, be subject to a duty
under this subsection equal to the amount of such drawback or bounty;
R 6. Goods exported from the Philippines for repair, processing or reconditioning
without having been substantially advanced in value, and subsequently
reimported in its original form and in the same state:
In case the reimported goods advanced in value, whether or not in their original
state, the value added shall be subject to the applicable duty rate of the tariff
heading of the reimported goods;
D 7. Imported goods donated to or, for the account of the Philippine government or
any duly registered relief organization, not operated for profit, for free distribution
among the needy, upon certification by theDSWD or the Department of Education
(DepED), or the Department of Health (DOH), as the case may be.

P Personal and household effects; professional instruments

M 10. Medals, badges, cups and other small articles bestowed as trophies or prizes, or those
received or accepted as honorary distinction;
R 11. [Bar 2003] Personal and household effects 14 belonging to residents of the Philippines
returning from abroad: Except: Luxury items for personal adornment; Vehicles,
Watercrafts, Aircrafts, Animals
Returning resident - nationals who have stayed in a foreign country for a period
of at least six (6) months. Requisites:
a. Purchased in foreign countries by residents of the Philippines which were
necessary, appropriate and normally used for their comfort and convenience
during their stay abroad;
b. Accompanying them on their return, or arriving within a reasonable time
which, barring unforeseen and fortuitous events, in no case shall exceed sixty
(60) days after the owner's return
c. Personal and household effects shall neither be in commercial quantities nor
intended for barter, sale or hire;
d. [Total dutiable value of which shall not exceed P 10,000.00, and returning
resident has not previously availed of the privilege under this section within
365 days prior to his arrival] - Limited to the FCA or FOB value15 of:

Length of Stay Abroad Value

14Including jewelry, precious stones and other articles of luxury which were formally declared and listed before
departure and identified under oath before the Collector of Customs when exported from the Philippines by such
returning residents upon their departure therefrom or during their stay abroad. Personal and household effects
including wearing apparel, articles of personal adornment (except luxury items), toilet articles, instruments related
to one's profession and analogous personal or household effects.

17
 At least ten (10) years and have not availed of this 350,000.00
privilege within ten (10) years prior to returning
resident's arrival.
At least five (5) but not more than ten (10) years and 250,000.00
have not availed of this privilege within five (5) years
prior to returning resident's arrival.
Less than five (5) years and have not availed of this 150,000.00
privilege within six (6) months prior to returning
resident's arrival
e. [50% ad valorem duty across the board shall be levied and collected on the
personal and household effects (except luxury items) in excess of P10,000.00.]
Any amount in excess of the above-stated threshold shall be subject to the
corresponding duties and taxes under this Act.
Special Rules for OCWs/OPW:
Overseas Contract/Filipino Workers Holders of Valid passports duly issued by the
Department of Foreign Affairs and Certified by the Department of Labor and
Employment/Philippine Overseas Employment Agency for overseas employment
purposes. It covers all nationals working in a foreign country under employment
contracts including Middle East Contract Workers, entertainers, domestic helpers,
regardless of their employment status in the foreign country.
In addition to the privilege granted under the immediately preceding paragraph,
returning overseas contract workers shall have the privilege to bring in, duty and tax
free, used home appliances, limited to one of every kind once in a given calendar year 16
accompanying them on their return, or arriving within a reasonable time which, barring
unforeseen and fortuitous events, in no case shall exceed sixty (60) days after the
owner's return upon presentation of their original passport at the Port of Entry:
Provided, That any excess of [P10,000.00] FCA value of 150,000.00 17 for personal and
household effects and/or of the number of duty and tax-free appliances as provided for
under this section, shall be subject to the corresponding duties and taxes provided
under the [TCCP] CMTA.
B 12. Balikbayan boxes: Residents of the Philippines, OPWs or other Filipinos while residing
abroad or upon their return to the Philippines shall be allowed to bring in or send to
their families or relatives in the Philippines balikbayan boxes which shall be exempt from
applicable duties and taxes imposed under the NIRC of 1997, as amended:
Balikbayan boxes shall contain personal and household effects only and shall neither
be in commercial quantities nor intended for barter, sale or for hire
FCA value of which shall not exceed 150,000.00 (every three (3) years after the
effectivity of this CMTA, the Secretary of Finance shall adjust the amount herein
stated to its present value using the CPI as published by the PSA)
Can only be availed up to three (3) times in a calendar year.
Any amount in excess of the allowable non-dutiable value shall be subject to the
applicable duties and taxes;
B 13. Economic, technical, vocational, scientific, philosophical, historical, and cultural books
and/or publications, and religious books like Bibles, missals, prayer books, the Koran,
Ahadith and other religious books of similar nature and extracts therefrom, hymnal and
hymns for religious uses:
Those which may have already been imported but pending release by the Bureau of
Customs at the effectivity of this Decree may still enjoy the privilege herein
provided upon certification by the Department of Education, Culture and Sports that
such imported books and/or publications are for economic, technical, vocational,
scientific, philosophical, historical or cultural purposes or that the same are

15 Every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein
stated to its present value using the CPI as published by the PSA.

16 January 1 to December 31.

17 Every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein
stated to its present value using the CPI as published by the PSA.

18
 educational, scientific or cultural materials covered by the International Agreement
on Importation of Educational Scientific and Cultural Materials (XAEESCM) signed by
the President of the Philippines on August 2, 1952, or other agreements binding
upon the Philippines. Educational, scientific and cultural materials covered by
international agreements or commitments binding upon the Philippine Government
so certified by the Department of Education, Culture and Sports.
O 14. Professional instruments and implements, tools of trade, occupation or employment,
wearing apparel, domestic animals, and personal and household effects belonging to
persons coming to settle in the Philippines or Filipinos and/or their families and
descendants who are now residents or citizens of other countries, such parties
hereinafter referred to as Overseas Filipinos:18
Quantities and of the class suitable to the profession, rank or position of the
persons importing them, for their own use
Not for barter or sale, accompanying such persons, or arriving within a reasonable;
Upon production of satisfactory evidence that such persons are actually coming to
settle in the Philippines and that the goods are brought from their former place of
abode, exempt such goods from the payment of duties and taxes
Vehicles, vessels, aircrafts, machineries and other similar goods for use in
manufacture, shall not fall within this classification and shall therefore be subject to
duties, taxes and other charges.
W 15. Wearing apparel, articles of personal adornment, toilet articles, portable tools and
instrument, theatrical costumes and similar effects. 19

Accompanying travelers, or tourists, or arriving within a reasonable time before or

after their arrival in the Philippines;
Necessary and appropriate for the wear and use of such persons according to the
nature of the journey, their comfort and convenience
Not applicable to articles intended for other persons or for barter, sale or hire.

Special rule on Foreign Consultants and Experts hired by the Government

a. Personal and household effects and vehicles belonging to foreign consultants
and experts hired by, and/or rendering service to, the government, and their
staff or personnel and families
b. Articles must accompany them or arrive within a reasonable time before or
after their arrival in the Philippines
c. In quantities and of the kind necessary and suitable to the profession, rank or
position of the person importing them, for their own use
d. Not for barter, sale or hire20

18 [In the discretion of the Collector of Customs, before or after the arrival of their owners, which shall not be
later than February 28, 1979 upon the production of evidence satisfactory to the Collector of Customs that such
persons are actually coming to settle in the Philippines, that change of residence was bona fide and that the
privilege of free entry was never granted to them before or that such person qualifies under the provisions of
Letters of Instructions 105, 163 and 210, and that the articles are brought from their former place of abode, shall
be exempt from the payment of customs, duties and taxes: Provided, That vehicles, vessels, aircrafts, machineries
and other similar articles for use in manufacture, shall not be classified hereunder] Provided, That the Bureau may,
upon the production of satisfactory evidence that such persons are actually coming to settle in the Philippines and
that the goods are brought from their former place of abode, exempt such goods from the payment of duties and
taxes; Provided, Further, That vehicles, vessels, aircrafts, machineries and other similar goods for use in
manufacture, shall not fall within this classification and shall therefore be subject to duties, taxes and other
charges;

19 Provided, further, That the Collector of Customs may in hisdiscretion, require either a written commitment or a
bond in an a mount equal to one and one-half times the ascertained duties, taxes and other charges conditioned
for the exportation thereof or payment of the corresponding duties, taxes and other charges within three (3)
months from the date of acceptance of the import entry: And Provided, finally, That the Collector of Customs may
extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding three (3)
months from the expiration of the original period;

19
 C 16. Coffins or urns containing human remain, bones or ashes, used personal and household
effects (not merchandise) of the deceased person, except vehicles, the FCA value of
which does not exceed 150,000.00 21[P10,000], upon identification as such;

F Foreign government; Foreign Service; Military Service

O 1. Importations for the official use of foreign embassies, legations, and other
agencies of foreign governments:
That those foreign countries accord like privileges to corresponding agencies of the
Philippines.
P 2. Goods [Articles] imported for the personal or family use of the members and
attaches of foreign embassies, legations, consular officers and other representatives of
foreign governments:
Accorded under special agreements between the Philippines and the countries which
they represent;
Granted only upon specific instructions of the Secretary of Finance in each instance
which be issued only upon request of the Department of Foreign Affairs on behalf of
members or attaches of foreign embassies, legations, consular officers and other
representatives of foreign governments;
A 3. [Bar 2005] Any officer or employee of the DFA, including any attache, civil or military
or member of the staff assigned to a Philippine diplomatic mission abroad by the
Department or any similar officer or employee of other departments assigned to any
Philippine consular office abroad, or any AFP military personnel accorded assimilated
diplomatic rank or on duty abroad who is returning from a regular assignment abroad,
for reassignment to the home office, or who dies, resigns, or is retired from the service,
after the approval of this Act, shall be exempt from the payment of all duties and taxes
on personal and household effects, including one (1) motor car which must have been
ordered or purchased prior to the receipt by the mission or consulate of the order of
recall, and which must be registered in the name of the officer or employee:
That this exemption shall apply only to the value of the motor car and to the
aggregate assessed value of the personal and household effects, the latter not to
exceed thirty percent (30%) of the total amount received by the officer or employee
in salary and allowances during the latest assignment abroad, but not to exceed four
(4) years:
However, that this exemption shall not be availed of more than once every four (4)
years
The officer or employee concerned must have served abroad for not less than two (2)
years.
Conditions:
1. Goods sold, bartered, hired or used for purposes other than what they were
intended for and without prior payment of the duty, tax or other charges which
would have been due and payable at the time of entry if the goods had been
entered without the benefit of this section, shall be subject to forfeiture and
the importation shall constitute a fraudulent practice against customs laws
2. However, a sale pursuant to a judicial order or in liquidation of the estate of a
deceased person shall not be subject to the preceding proviso, without
prejudice to the payment of duties, taxes and other charges

20 Provided that, the Collector of Customs may in his discretion require either a written commitment or a bond in
an amount equal to [one and one-half times] 100% of the ascertained duties, taxes and other charges upon the
articles classified under this subsection; conditioned for the exportation thereof or payment of the corresponding
duties, taxes and other charges within six (6) months after the expiration of their term or contract; And Provided,
finally, That the Collector of Customs may extend the time for exportation or payment of duties, taxes and other
charges for term not exceeding six (6) months from the expiration of the original period;

21 Provided, That every three (3) years after the effectivity of this Act, the value herein stated shall be adjusted
to its present value using the CPI as published by the PSA;

20
 3. The President may, upon the recommendation of the Secretary of Finance,
suspend, disallow or completely withdraw, in whole or in part, any
conditionally free importation under this section.
[Bar 2008] By fiction of law, areas declared as a special economic zones or Freeport
zone have been treated for tax purposes as foreign territories. Therefore, no customs
duties, value added tax and excise tax shall be due thereron while they remain within
the special economic zone or Freeport zone (Mamalateo, 2014, p. 820; citing R.A.
7916 [PEZA Law] and R.A. No. 7227 [BCDA Law]).

H. Classification of duties
1. Ordinary/regular duties:
Taxes that are imposed or assessed upon merchandise from, or exported to a
foreign country for the purpose of raising revenue (Domondon, Bar Reviewer in
Taxation, Vol. 1, 7th ed. 2006, p. 477).
They may also be imposed to serve as protective barriers which would prevent the
entry of merchandise that would compete with locally manufactured items. Also
referred to as Tariff Barriers (Ibid).

a) Ad valorem; methods of valuation

Ad valorem duties are computed based on the value of the imported articles.

Methods of valuation
Sequential Application of Valuation Methods (Sec. 700): Imported goods shall
be valued in accordance with the provisions of Section 701 (Transaction Valuation
System) whenever the conditions prescribed therein are fulfilled. Where the
customs value cannot be determined under the provisions of Section 701 of the
CMTA, it is to be determined by proceeding sequentially through the succeeding
sections hereof to the first such section under which the customs value can be
determined.

If the importer does not request that the order of Sections 704 and 705 of this Act
be reversed, the normal order of the sequence is to be followed. If the importer so
requests but it is impossible to determine the customs value under Section 705 of
this Act, the customs value shall be determined under Section 704.

When the customs value cannot be determined under Sections 701 through 705, it
may be determined under Section 706 of this Act.

1 Transaction Value System [Bar 2004]

The transaction value shall be the price actually paid or payable for the goods when sold for export
to the Philippines adjusted in accordance with the provisions of tins section (Sec. 701, CMTA). The
dutiable value of an imported article subject to an ad valorem rate of duty shall be the transaction
value, which shall be the price actually paid or payable for the goods when sold for export to the
Philippines, adjusted by adding (Sec. 201 [A], TCCP):
Formula:

Transaction Value = (1) To the extent that they are incurred by the buyer but are not
included in the price actually paid or payable for the imported goods:

21
 (a) Commissions and brokerage fees except buying
commissions;
(b) Cost of containers;
(c) Cost of packing, whether for labor or materials;
(d) Value, apportioned as appropriate, of the following
goods and services: materials, components, parts and
similar items incorporated in the imported goods;
tools; dies; moulds and similar items used in the
production of imported goods; materials consumed in
the production of the imported goods; and
engineering, development, artwork, design work and
plans and sketches undertaken elsewhere than in the
Philippines and necessary for the production of
imported goods, where such goods and services are
supplied directly or indirectly by the buyer free of
charge or at a reduced cost for use in connection with
the production and sale for export of the imported
goods; and
(e) Amount of royalties and license fees related to the
goods being valued that the buyer must pay either
directly or indirectly, as a condition of sale of the goods
to the buyer.

(2) Value of any part of the proceeds of any subsequent resale, disposal
or use of the imported goods that accrues directly or indirectly to the
seller;

(3) Cost of transport of the imported goods from the port of exportation
to the port of entry in the Philippines;

(4) Loading, unloading and handling charges associated with the

transport of the imported goods from the country of exportation to the
port of entry in the Philippines; and

(5) Cost of insurance.

NOTE: All additions to the price actually paid or payable shall be made only on the basis of objective and
quantifiable data.

Conditions
a) No restrictions as to the disposition or use Exceptions:
of the goods by the buyer i. Are imposed or required by law or by
Philippine authorities;
ii. limit the geographical area in which the
goods may be resold; or
iii. Do not substantially affect the value of
the goods
b) Sale or price is not subject to some condition or consideration for which a value cannot be
determined with respect to the goods being valued

The buyer and the seller are not related, or Related persons
where the buyer and the seller are related, that
the transaction value is acceptable for customs For purposes of this Act, persons shall be
purposes under the provisions hereof. deemed related only if:
i. They are officers or directors of one
Sale between related persons another's business;
In a sale between related persons, the ii. They are legally recognized partners in
transaction value shall be accepted as basis for business;

22
customs valuation whenever the importer
demonstrates that such value closely
approximates one of the following occurring at
or about the same time:
(a) TV in sales to unrelated buyers of
identical or similar goods for export to
the same country of importation;
(b) Customs value of identical or similar
goods as determined under the
provisions of Section 704 of this Act; or
(c) Customs value of identical or similar
goods are determined under the
provisions of Section 705 of this Act.
iii. There exists an employer-employee
relationship between them;
iv. Any person directly or indirectly owns,
controls or holds five percent (5%) or
more of the outstanding voting stocks or
shares of both seller and buyer; One of
them directly or indirectly controls the
other;
v. Both of them are directly or indirectly
controlled by a third person;
vi. Together they directly or indirectly
control a third person; or
vii. They are members of the same family,
including those related by affinity or
consanguinity up to the fourth civil
degree.

Persons who are associated in business with one

another in that one is the sole agent, sole
distributor or sole concessionaire, however
described, of the other shall be deemed to be
related for the purposes of this Act if they fall
within any of the eight (8) cases cited in the
preceding paragraph.

2 Transaction Value of Identical Goods System

Where the dutiable value cannot be determined under method one, the dutiable value shall
be the transaction value of identical goods sold for export to the Philippines and exported at
or about the same time as the goods being valued.
Identical goods goods which are the same in all respects, including physical
characteristics, quality and reputation. Minor differences in appearances shall not preclude
goods otherwise conforming to the definition from being regarded as identical.
If, in applying this section, more than one transaction value of identical goods are found, the
lowest value shall be used to determine the customs value. (Sec. 702, CMTA)

3 Transaction Value of Similar Goods System

Where the dutiable value cannot be determined under the preceding method, the dutiable
value shall be the transaction value of similar goods sold for export to the Philippines and
exported at or about the same time as the goods being valued.
Similar goods goods which, although not alike in all respects, have like characteristics
and similar component materials which enable them to perform the same functions and to
be commercially interchangeable.
The quality of the goods, its reputation and the existence of a trademark shall be among the
factors to be considered in determining whether goods are similar.
If, in applying this section, more than one transaction value of identical goods are found,
the lowest such value shall be used to determine the customs value. (Sec. 703, CMTA)

4 Deductive Value System

Where the dutiable value cannot be determined under the preceding method, the dutiable
value shall be the deductive value. XPN: unless otherwise requested by the importer.
Basis: the unit price at which the imported goods or identical or similar imported
goods are sold in the Philippines, in the same condition as when imported, in the greatest
aggregate quantity, at or about the time of the importation of the goods being valued, to
persons not related to the persons from whom they buy such goods, subject to deductions.

23
Formula
Deductive Value = Unit price
Less:
1)
2)
3)
4)
Condition
(a) If neither the imported goods nor identical
nor similar imported goods are sold at or
about the time of importation of the goods
being valued in the Philippines in the
conditions they were imported.
(b) If neither the imported goods nor identical
nor similar imported goods are sold in the
Philippines in the condition as imported,
then, if the importer so requests
5 Computed Value System
The Bureau shall not require or compel any person not residing in the Philippines to produce
for examination, or to allow access to, any account or other record for the purpose of
determining a computed value.
However, information supplied by the producer of the goods for the purposes of determining
the customs value may be verified in another country with the agreement of the producer
Commissions (usually paid/agreed to be paid);
Additions usually made for profit; general expenses in
connection with sales in such country of imported
goods of the same class or kind
Usual costs of transport and insurance and associated
costs incurred within the Philippines
Where appropriate, the costs of: (i) transport of the
imported, goods from the port of exportation to the
port of entry in the Philippines; (ii) loading, unloading
and handling charges associated with the transport of
the imported goods from the country of exportation to
the port of entry in the Philippines; and (iii) insurance
Customs duties and other national taxes payable in
the Philippines by reason of the importation or sale of
the goods
Valuation
Unit price at which the imported goods or
identical or similar imported goods sold in the
Philippines in the condition they were imported
and at the earliest date after the importation of
the goods being valued, but before the
expiration of ninety (90) days after such
importation.
Unit price at which the imported goods, after
further processing, are sold in the greatest
aggregate quantity to persons in the Philippines
who are not related to the persons from whom
they buy such goods, subject to allowance for
the value added by such processing and
deductions provided under subsections (1), (2),
(3) and (4) hereof.
24
 and provided that said producer will give sufficient advance notice to the government of the
country in question and that the latter does not object to the investigation.
Formula

Computed Value = Add:

1) Cost or the value of materials and fabrication or other
processing employed in producing the imported
goods;
2) Amount for profit and general expenses equal to that
usually reflected in the sale of goods of the same class
or kind as the goods being valued which are made by
producers in the country of exportation for export to
the Philippines
3) Freight, insurance fees and other transportation
expenses for the importation of the goods
4) Any assist, if its value is not included under paragraph
(1) hereof
5) The cost of containers and packing, if their values are
not included under paragraph (1) hereof

6 Fallback Value System

If the dutiable value cannot be determined under the preceding methods described above, it
shall be determined by using other reasonable means and on the basis of data available in
the Philippines. If the importer so requests, the importer shall be informed in writing of the
dutiable value determined under method six and the method used to determine such value.

No dutiable value determined on the basis of :

(1) Selling price in the Philippines of goods produced in the Philippines;
(2) A system that provides for the acceptance for customs purposes of the higher of two (2)
alternative values;
(3) Price of goods in the domestic market of the country of exportation;
(4) Cost of production, other than computed values, that have been determined for identical or
similar goods in accordance with method five hereof;
(5) Price of goods for export to a country other than the Philippines;
(6) Minimum customs values; or
(7) Arbitrary or fictitious values.

b) Specific
a) Computed based in dutiable weight of goods (Sec. 202, TCCP).
Gross Legal Net
Weight of the same, Weight of the same, together with Actual weight of the
together with the the weight of the immediate articles at the time of
weight of all containers, containers, holders, and/or packing importation, excluding the
packages, holder and in which articles are usually weight of the immediate
packing, of any kind, in contained, held or packed at the and all other containers,
which said articles are time of importation and/or, when holders or packing.
contained, held or imported in retail packages, at the
packed at the time of time of their sale to the public usual
importation. retail quantities, provided, that when
articles are packaged in a single
container, the weight of the latter
shall be included in the legal weight.

2. Special duties [Bar 2005, 1997]

b) Additional import duties imposed on specific kinds of imported articlesunder
certain conditions for the protection of consumers and manufacturers, as well

25
 as Philippine products from undue competition posed by foreign made products
(Vitug & Acosta, Tax Law and Jurisprudence, 3rd ed. 2006, p.364)

Duty Imposed on Purpose Amount Imposing Judicial

Authority Review
a) Dumping Imported goods To protect Up to the 1. Agriculture Petition for
sold below local extent of the Secretary Review with
normal value industries underpricing (for the CTA,
against (Prevailing agricultural within 30 days
unfair market price products) from receipt
foreign less actual of notice.
competitio price) 2. DTI
n Secretary Petition shall
(for non- not stay or
agricultural suspend the
products) imposition of
duty.
b) Countervailing Goods enjoying To protect Up to the 1. Agriculture Petition for
subsidy in the local extent of the Secretary Review with
exporting industries amount of (for the CTA,
country against subsidy. agricultural within 30 days
unfair products) from receipt
foreign 2. DTI of notice.
competitio Secretary
n (for non- Petition shall
agricultural not stay or
products) suspend the
imposition of
duty.
c) Marking Imported goods To prevent 5% ad Customs
not properly deception Commissioner -
marked
d) Discriminatory Goods coming To protect 100% ad President of the
from countries national valorem Philippines
that discriminate industry
-
against
Philippine
products
e) Safeguard General: goods To protect General: General: Petition for
or products domestic increase, either DTI Secretary; Review with
imported in industries ad valorem or Agriculture the CTA,
increased and specific, or Secretary within 30 days
quantities producers both, sufficient from receipt
from to redress or Special: of notice.
Special: increased prevent injury Agriculture
volume of imports to the domestic Petition shall
imports exceed industry not stop,
a trigger level or suspend or
price falls below Special: toll the
a trigger price 1) Volume test imposition of
level 2) Price Test duty or the
adoption of
other
appropriate
safeguard
measures, as
the case
maybe.

26
1 Dumping duty
Dumping occurs when foreign producers sell their products to an importer in the
domestic market at prices lower than in their own national markets, or at prices below cost
of production, the sale or importation of which injures or threatens to injure a domestic
industry producing like or comparable products or retards the establishment of a potential
industry. Dumping is a form of price discrimination between two national markets. (Tariff
Commission, Anti-Dumping Law: Primer 2016, p. 2)
Elements of Dumping Requisites for the imposition of
Dumping Duties
1. Like product: product produced by the 1. Where a product, commodity or article of
domestic industry which is identical or commerce
alike in all respects to the article under a. Is exported to the Philippines
consideration, or in the absence of such a b. At a price less than its normal
product, another product which, value22
although not alike in all respects, c. When destined for domestic
has characteristics closely resembling those consumption
of the product under consideration.
2. And such importation:
2. Price difference: amount by which the a. Is causing, or
normal value (the price prevailing in the b. Is threatening to cause material
exporting country) exceeds the export injury to a domestic industry
price (selling price to an importer in the producing the like product.
Philippines).
Exemptions from Anti-Dumping Protest
3. Injury: means material injury to a 1. Products imported by, or consigned to,
domestic industry, threat of material injury government agencies not organized
or material retardation of the establishment for profit and particularly designated
of a domestic industry. by law or proper authorities to
import, directly or through
Injury test must be based on positive awardees, such articles as would
evidence and shall involve an objective stabilize and/or supplement
examination of both shortages; and
(i) Volume of the dumped imports; 2. Conditionally duty-free importations
(ii) Effects of dumped imports on prices in
the domestic market for like product;
and
(iii) Consequent impact of these imports
on the domestic producers of such
products.

4. Causal link: refers to a finding that the

material injury suffered by the domestic
industry is the direct result of the
importation of the dumped product. It must
be clear that the injury suffered is directly
attributable to the alleged dumping.

Sec. 301, TCCP, as amended by RA 8752 (Anti-dumping Act of 1999); Sec. 711, CMTA

22 Normal value is the foreign producer's domestic selling price of the article. It is the comparable price
in the ordinary course of trade for the like product when destined for consumption in the country of export
or origin. (Tariff Commission, Anti-Dumping Law: Primer 2016, p. 7)

27
2 Countervailing Duties
Duty imposed whenever any article of commerce is granted directly or indirectly by the
government in the country of origin or exportation, any kind or form of specific subsidy
upon the production, manufacture or exportation of such product, commodity or article and
the importation of such subsidized product or article caused or threatens to cause material
injury or materially retarded the growth or prevents the establishment of a domestic
industry (Sec. 1, RA 8751)
This duty shall be in addition to any ordinary duties, taxes and charges imposed by law on
such imported product or article. (Ibid)
Subsidies: any specific assistance (e.g., financial contribution, income or price support
schemes) directly or indirectly provided by the government of the country of export or
origin in respect of the product imported into the Philippines. An industry is
deemed to have received subsidy where a benefit is conferred as a result of:

(1) Direct and/or potential transfer of government funds (e.g.,grants, loans, equity
infusion, loan guarantees);
(2) The government foregoing the revenue that should otherwise have
been collected (e.g., tax credits); or
(3) The government providing goods or services, or purchasing goods

Actionable Subsidies Non-Actionable Subsidy Prohibited Subsidy

Yellow subsidies are those Green subsidies are those which Red subsidies include export
falling under the definition are permitted as they are of a subsidies, i.e., those that are
of subsidy which are neither general nature, i.e., applied contingent on export
non-actionable nor across-the-board to all industries performance, and subsidies
prohibited subsidies. and not limited to a specific that are contingent on the use
industry or enterprise, or group of domestic over imported
of enterprises or industries. goods. An importing country
alleging this kind of subsidy
A subsidy under this category can avail of remedy measures
cannot be subjected to either by bringing the matter before
countervailing measures or other the WTO Dispute Settlement
disciplines under the World Trade Body for redress.
Organization (WTO) Agreement
on Subsidies and
Countervailing Measures.
Elements Importations exempted from countervailing action
1. Like product 1. Articles imported by, or consigned to, government agencies
2. Subsidy not organized for profit and particularly designated by law or
3. Injury proper authorities to import, directly or through awardees, such
4. Causal link articles as would stabilize and/or supplement shortages; and
2. Conditionally duty-free importations

28
 29
Primer 2016, p. 9).
final determination (Tariff Commission, Anti-Dumping Law:
imported from a specific country following an affirmative
regular duty and other charges, on a protested product imposition duty
Final anti-dumping duty imposed, in addition to the 5 years from the date of Definitive 4.
such a lesser duty is adequate to remove the injury to the domestic industry. rule
Imposition of anti-dumping duty in amounts lower than the calculated margin of dumping, if Lesser duty 3.
injury to the domestic industry. necessary.
preliminary affirmative determination of dumping and undertaking is no longer
Offer of price undertaking shall be made only after a authorities that the
material injury to the domestic industry. the satisfaction of the
Philippines at a dumped price, thereby eliminating the the foreign exporter proves to g
exporter to increase his price or to cease exporting to the for a period of 5 years unless undertakin
Price undertaking is a voluntary commitment by the Price undertaking is effective Price 2.
Commission, Anti-Dumping Law: Primer 2016, p. 9).
than 60 days from the initiation of the case (Tariff
made a preliminary affirmative determination no sooner
than the latter. Applied only after the DTI-BIS or DA has
export price of the protested article, the former being higher
estimated difference between the normal value and the exporter.
security by cash deposit or bond equal to the 6months upon request by the Measure
Takes the form of a provisional duty or, preferably, a 4 months, extendable to Provisional 1.
Measures/Remedies Against Dumping/Countervailing
Issuance of Department Order
Within ten (10) days from receipt of the afrmative final determination by the Tarif
Commission, the Secretaryof DTI or DA issues a Department Order for the imposition of a
definitive countervailing/anti-dumping duty, unless the Secretary has earlier accepted a 5
price undertaking from the foreign exporter, producer or government of the country of
export or origin. In case of a negative determination, the Secretary, after the lapse of
the period for the petitioner to appeal to the Court of Tax Appeals, issue, through the
Secretary of Finance, an Order for the Commissioner of Customs to immediately release
thecash bond to the importer.
Final Determination
Tarif Commission notifies all intersted parties; recreives representation and/or submissions; 4
hold primary conference and public consultation; on site investigation and data verification
both foreighn and domestic.
Commission has 120 days from receipt of the advice from either Secretary of DTI/DA to
complete its investigation and submit its report of findings to the Secretary.
Preliminary Determination 3
DTI/DA initiates investigation and make preliminary determination whether or not a provisional
measure may be imposed within 20 days from receipt of answers of the questionnaires from
respondents and other interested parties.
Prima Facie Determination 2
DTI-BSI/DA within 10 days from receipt of petition shall examine the accuracy and adequcy of
petition, sufciency of evidence to justify initiation of investigation
Filing of Petition for Countervailing Action/Anti-Dumping Protest 1
petition may be filed by, or on behalf of, the domestic industry, in writing and in a notarized
form.
Stages in Dumping/Countervailing Investigation
 Review of Anti- Dumping Measure/Countervailing
A. Administrative
1. Sunset review Maybe initiated by any interested party or upon own motion of the
Commission before the sunset date (i.e., the 5thyear) to determine
whether the expiry of the anti-dumping/countervailing duty would likely
lead to a continuation or recurrence of dumping/subsidization and injury
2. Interim review Conducted by the Commission motu Conducted by the Commission,
proprio, or upon the direction of motu proprio, or upon the
the Secretary, or upon petition of direction of the Secretary or upon
any interested party to determine petition of any interested party to
whether: determine whether
(i) the need for the (i) the imposition of the
continued imposition of countervailing duty is no
the anti-dumping duty longer necessary to offset
is no longer subsidization, taking into
necessary to Interim consideration the need to
review offset dumping protect the existing
taking into domestic industry against
consideration the need dumping, or
to protect the existing
domestic industry; or (ii) the existing duty is not
(ii) the existing duty is not sufficient to counteract the
sufficient to counteract subsidization which is
the dumping which is causing injury.
causing injury.

At least one (1) year should have

elapsed since the imposition of the At least one (1) year should have
anti-dumping duty before an interim elapsed since the imposition of the
review can be made countervailing duty before an
interim review can be initiated
3. Newcomer review Carried out on an accelerated basis for the purpose of determining
individual margins of dumping for new exporters (new shippers) in the
exporting country in question which have not exported the product
during the period of investigation on which the measures were
based. The new foreign exporters requesting for such review must not
be related to any foreign exporter who is subject to the anti-dumping duty
[no provision for countervailing duty]

B. Judicial
Judicial Review Any aggrieved and/or interested party may file a petition for review
with the Court of Tax Appeals within thirty (30) days from receipt of notice
of the final ruling on the imposition of an anti-dumping duty. Filing of such
petition for review shall not in any way stop or suspend the
imposition and collection of the anti-dumping/countervailing duty.

30
3 Safeguarding Measures
Safeguard measures are trade remedy measures adopted by the government to provide
affected domestic industries relief against imports.
Purpose: give the affected domestic industry time to prepare itself for and adjust to
increased import competition resulting from the reduction of tariffs or the lifting of
quantitative restrictions agreed upon in multilateral trade negotiations.

General safeguard measure Special safeguard measures

Definition Imposed against imports if the Imposed against importations of
products at issue are being imported agricultural products whose quantitative
in such increased quantities, either import restrictions were converted
absolute or relative to domestic (tariffed) into ordinary customs duties
production, and under such conditions and agricultural products designated
as to cause or threaten to cause with the symbol SSG in the GATT
serious injury to the domestic Schedule of Concessions.
industry; and
It may be invoked if:

(1) the volume of imports exceeds a

trigger level; or, but not
concurrently,

(2) the price of imports falls below a

trigger price.
In either case, injury to the domestic
industry need not be established
Amount of Tariff increase, either ad valorem or Volume Test
Duty specific, or both, to be paid through a Under the volume test, additional duty
cash bond set at a level sufficient to should not exceed one-third (1/3) of the
redress or prevent injury to the applicable out-quota customs duty on
domestic industry. the agricultural product under
consideration
Price Test
Price Difference Rate
At most 10% of the 0
TP
Exceeds 10% to 40% 30% of amount
of TP by which the PD
exceeds 10% of
TP
Exceeds 40% to 60% 50% of the
amount by which
the exceeds 40%
of TP
Exceeds 60% to 75% 70% of the
amount by which
the exceeds 60%
of TP
Exceeds 75% 90% of the
amount by which
the exceeds 75%
of TP

31
Measures General safeguard measure Special safeguard measures
Provisional
Tariff increase either ad valorem or Not applied
specific, or both, to be paid through
a cash bond set at a level
sufficient to redress or prevent
serious injury to the domestic
industry.
Definitive
i. Increase in, or imposition of, 1. Volume test (supra).
any duty on the imported 2. Price test (supra)
product;
ii. Decrease in or the imposition
of a tariff-rate quota (Minimum
Access Volume) on the
product;
iii. Modification or imposition of
any quantitative restriction on
the importation of the product
into the Philippines;
iv. One or more appropriate
adjustment measures,
including the provision of trade
adjustment assistance; or
v. Any combination of actions
described in subparagraphs (i)
to (iv).

The Commission may also recommend

other actions, including the initiation
of international negotiations, to
address the underlying cause of the
increase in imports of the product
to alleviate the injury or threat
thereof to the domestic industry and
to facilitate positive adjustment to
import competition.
Duration Provisional Effective only until the end of the year in
Not exceeding 200 calendar days which the measure is imposed
from the date of imposition.

Definitive
Maximum initial period: 4 years,
including the period in which
provisional measure is imposed.
Extension: up to a maximum of eight
(8) years, or ten (10) years for
developing countries.

32
 General safeguard measure
Limitations The general safeguard measures
should be limited to:
i) extent of redressing or preventing
serious injury to the domestic
industry; and
ii)to facilitate the domestic industrys
adjustments from the adverse
effects directly attributed to the
increased imports.
Special safeguard measures
To safeguard and enhance the interest of
farmers and fisherfolk, the provisions of
RA 8435, otherwise known as the
Agriculture and Fisheries Modernization
Act, will not be affected by the
provisions of the special safeguard
measures prescribed under RA 8800.
There shall be no recourse to the use of
special safeguards measures concurrently
with the general safeguard measure.

When quantitative import restrictions The special safeguard provisions of RA

are used, such measures shall not
reduce the quantity of imports
below the average imports for the
three (3) preceding representative
years, unless clear justification is
given that a different level is
necessary to prevent or remedy a
serious injury.
8800 shall lapse with the duration of
the reform process in agriculture as
determined in the World Trade
Organization (WTO). Thereafter, recourse
to safeguard measures shall be subject
to the provisions on general safeguard
measures as provided in RA 8800

General safeguard measure shall not

be applied to a product originating
from a developing country, if that
countrys share of total imports of
the product is less than 3%,
provided that the developing
countries with less than 3% share
collectively account for not more than
9% of the total imports.

Procedural Aspect
General safeguard measure Special safeguard measures
Who may 1. Domestic producers as a whole, 1. Any person, whether natural or
file Petition of like or directly competitive juridical may request a verification
for products manufactured or if a particular agricultural product can
Safeguard produced in the Philippines, or be imposed a special safeguard duty;
measures? those whole collective output of or
like or directly competitive
products constitute a major 2. The DA Secretary may, motu
proportion of the total domestic proprio, initiate the imposition of a
production of those products; special safeguard measure following
the satisfaction of the conditions
2. The President, or the House or for imposing the measure
Senate Committee on
Agriculture, or the House or
Senate Committee on Trade and
Commerce; or

3. The DTI or DA Secretary, motu

proprio, provided there is
evidence of increased imports of
the product under consideration

33
 34
Decision
Within 15 calendar days from receipt of Commissionreport to make a decision.
Afrmative = a Department Order is issued to implement the imposition of the general 5
safeguard measure.
Negative = Secretary issues a DOfor the termination of the case as well as a written
instruction to the Commissioner of Customs, through the Secretary of Finance,
authorizing BOC the return of the cash bond previously collected
Final Determination
The TC has 120 days (or 60 days if the Secretary certifies the case as urgent) from 4
receipt of endorsement from the Sec. to conclude its formal investigaton and submit its
report of findings and recommendations to the Sec in whether or not to impose definitive
safeguard measures.
Preliminary Determination
DTI/DA initiates PI and make preliminary determination whether or not a provisional
safeguard measure may be imposed within 30 calendar days from receipt of answers of 3
the questionnaires from respondents and other interested parties.
Afrmative = Sec issues Department Order (DO) for imposition of PSM; Negative =
terminate investigation
Prima Facie Determination 2
DTI-BSI/DA has 5 calendar days to decide whether prima facie cases exists to merit the
initiation of PI.
No prima facie case - reject
1
Filing of Petition.
Stages in Investigation for the imposition of a general safeguard measure
Safeguard Measures Vis--VisAnti-Dumping and Countervailing Measures
Anti-Dumping/Countervalining Measures Safeguard Measure
(General and Special)
Nature of Measure
Address unfairly traded imports: Address fairly traded imports:
1. Export price is lower than the normal value 1. Export price at the level of normal value
2. Subsidized production or exportation of the 2. Increased level of imports absolute or relative to
foreign merchandise production (general safeguards)
3. Volume of imports exceed a base trigger level or
price falls below a trigger price level (special
safeguards)
Objective
1. Dumping duties and countervailing duties seek to 1. General safeguards will remove injury and
level the playing field by providing remedies and facilitate structural adjustments that will enable
protecting domestic industries against the unfair an industry gain competitiveness.
trade practices of dumping and/or subsidization. 2. Special safeguards will assist farmers whose
products were previously protected by
quantitative restrictions that have been terrified.
Coverage of Measure
1. Limited to like products 1. All like or directly competitive products
2. Country specific and exporter specific 2. All countries exporting of like or directly
competitive product
3. General safeguards apply to industrial and non-
tariffied goods
4. Special safeguards apply to tariffied agricultural
products denominated with the acronym SSG in
the GATT Schedule of Concessions
Minimum Threshold of Support of Industry for Application
A domestic Industry which is supported by domestic 1. Industry filing the case should be a producer of
producers whose collective output constitutes more the like or directly competitive product whose
than 50% of the total production of the like product collective output constitutes a major proportion of
produced by other domestic producers that are the total domestic production general safeguards
expressing either support for or opposition to the 2. DA (motu proprio) for special safeguards
application. However, no investigation shall be
initiated when domestic producers expressly
supporting the application account for less than 25%
of the production of the like product produced by the
domestic industry.
Elements to Be Established
1. Product comparability -like product General Safeguards
2. Price difference / subsidy 1. Product comparability -like or directly competitive
3. Material injury or threat of material injury product
4. Causal link 2. Increased imports
3. Serious injury or threat of serious injury
4. Causal link

Special Safeguards:
1. Product comparability -like product
2. Volume of imports exceed a base trigger level, or
3. Price falls below a trigger price level
Forms of Measure
1. Provisional measure anti-dumping bond / General Safeguards
countervailing bond 1. Provisional measure tariff increase
2. Definitive anti-dumping duty / countervailing duty 2. Definitive safeguard measure -tariff increase;
quantitative restrictions (e.g., import quota;
import licensing)

Special Safeguards:
1. Additional duty not exceeding one-third of the
level of the ordinary customs duty in effect
during the year in which the action is taken.

35
 Imposition of Definitive Measure
1. Requires the conduct of a preliminary 1. General Safeguards: In critical circumstances
investigation (affirmative preliminary where delay may cause damage that is difficult to
determination) prior to imposition of a dumping or repair, safeguard measure in the form of tariff
countervailing bond for a period of 4 months or adjustment may be imposed for 200 days
120 days. pursuant to a preliminary determination.

2. Special Safeguards: Not provisionally applied

Duration of Definitive Measure

1. Five (5) years, subject to sunset review to General Safeguards:
determine whether or not to extend the effectivity 1. Four (4) years, extendable for another 4 years
of the dumping / countervailing duty provided the industry can show that structural
adjustment is being implemented with an
extension for another 2 years for developing
countries.

Special Safeguards:
1. Shall only be maintained until the end of the year
in which it has been imposed

4 Marking Duties
Duty to Mark: All goods of foreign origin imported into
the Philippines or their containers shall be conspicuously
marked in any official language of the Philippines as
legibly, indelibly and permanently as the nature of the
goods or container will permit and in such manner as to
indicate to an ultimate purchaser in the Philippines the
name of the country of origin of the goods (Sec. 303 [1],
TCCP; Sec. 710 [A], CMTA).
Marking of Containers: Whenever goods are exempt
from the requirements of marking, the immediate
container, if any, of such goods, or such other container or
containers of such goods, shall be marked in such manner
as to indicate to an ultimate purchaser in the Philippines
the name of the country of origin of such goods in any
official language of the Philippines (Sec. 303 [2], TCCP;
Sec. 710 [B], CMTA).
Fine for Failure to Mark: If, at the time of importation
any good or its container is not marked in accordance with
the requirements of this section, there shall be levied,
collected, and paid upon such good a marking duty of five
percent (5%) of dutiable value, which shall be deemed to
have accrued at the time of importation (Sec. 303 [3],
TCCP; Sec. 710 [C], CMTA).
Release withheld until marked: No imported goods
held in customs custody for inspection, examination, or
assessment shall be released until such goods or their
containers shall have been marked in accordance with the
requirements of this section and until the amount of duty
estimated to be payable under subsection (C) of this
section shall have been deposited (Sec. 303[4], TCCP;
Sec. 710 [D], CMTA).
Effect of failure or refusal to mark: The failure or
refusal of the owner or importer to mark the goods as
herein required within a period of thirty (30) days after
due notice shall constitute as an act of abandonment of
Exceptions from requirements of
marking (Sec. 303 [1][3], TCCP; Sec.
710 [A][3], CMTA)
I Incapable of being marked;
I Cannot be marked prior to shipment to
the Philippines without injury
C Marking of a container of such goods
will reasonably indicate the origin of
such goods
C Crude substances
C An ultimate purchaser, by reason of
the character of such goods or by
reason of the circumstances of their
importation, must necessarily know
the country of origin of such goods
even though they are not marked to
indicate their origin
U Imported for use by the importer and
not intended for sale in their imported
or any other form
P Cannot be marked prior to shipment to
the Philippines, except at an expense
economically prohibitive of their
importation.
P To be processed in the Philippines by
the importer or for the importer's
account other than for the purpose of
concealing the origin of such goods
and in such manner that any mark
contemplated by this section would
necessarily be obliterated, destroyed,
or permanently concealed
A Cannot be marked after importation
except at an expense which is
economically prohibitive, and the
failure to mark the goods before
importation was not due to any
purpose of the importer, producer,
seller or shipper to avoid compliance

36
 said goods and their disposition shall be governed by the 2 Produced more than 20 years prior to
provisions of this Act relative to abandonment of imported 0 their importation into the Philippines
goods (Sec. 303[5], TCCP; Sec. 710 [E], CMTA).

4 Discriminatory/Retaliatory Duties

When the President finds that the public interest will be served thereby, the President shall, by
proclamation, specify and declare new or additional duties in an amount not exceeding one hundred
percent (100%) ad valorem upon goods wholly or in part the growth or product of, or imported in a
vessel of any foreign country whenever the President shall find as a fact that such country:

i. Imposes, directly or indirectly, upon the disposition or transportation in transit or through

reexportation from such country of any goods wholly or in part the growth or product of the
Philippines, any unreasonable charge, exaction, regulation or limitation which is not equally
enforced upon the like goods of every foreign country; or

ii. Discriminates in fact against the commerce of the Philippines, directly or indirectly, by law or
administrative regulation or practice, by or in respect to any customs, tonnage, or port duty,
fee, charge, exaction, classification, regulation, condition, restriction or prohibition, in such
manner as to place the commerce of the Philippines at a disadvantage compared with the
commerce of any foreign country (Sec. 304 [a], TCCP; Sec. 711 [A], CMTA)

NOTE: This is without prejudice to the Philippine commitment in any ratified international
agreements or treaty.

Maintained/Increased discrimination; Exclusion: The President is authorized, if deemed

consistent with the interests of the Philippines and of public interest, to issue a further proclamation
directing that such product of said country or such goods imported in their vessels be excluded from
importation into the Philippines. (Sec. 304 [b], TCCP; Sec. 711 [B], CMTA)

Scope of application of proclamation: Any proclamation issued by the President, if the President
deems it consistent with the interest of the Philippines, extend to the whole of any foreign country
or may be confined to any subdivision or subdivisions thereof; Provided, That the President may,
whenever the public interest requires, suspend, revoke, supplement or amend any such
proclamation. (Sec. 304 [c], TCCP; Sec. 711 [C], CMTA)

Forfeiture/Seizure/Condemnation of goods in favor of Government: All goods imported

contrary to the provisions of this section shall be forfeited to the government of the Philippines and
shall be liable to be seized, prosecuted and condemned in like manner and under the same
regulations, restrictions, and provisions as may from time to time he established for the recovery,
collection, distribution, and remission or forfeiture to the government by the tariff and customs
laws. Whenever the provision of this section shall be applicable to importations into the Philippines
of goods wholly or in part the growth or product of any foreign country, it shall be applicable
thereto, whether such goods are imported directly or indirectly. (Sec. 304 [d], TCCP; Sec. 711 [D],
CMTA)

Duty of the BOC: It shall be the duty of the Commission to ascertain and at all times be informed
whether any of the discriminations against the commerce of the Philippines enumerated in
subsections (a) and (b) of this section are practiced by any country; and if and when such
discriminatory acts are disclosed, it shall be the duty of the Commission to bring the matter to the
attention of the President, and to recommend measures to address such discriminatory acts. (Sec.
304 [e], TCCP; Sec. 711 [E], CMTA)

Rule-making Power of the SOF: The Secretary of Finance shall make such rules and regulations
as are necessary for the execution of a proclamation that the President may issue in accordance
with the provisions of this section. (Sec. 304 [f], TCCP; Sec. 711 [F], CMTA)

37
I. Remedies

SUMMARY OF REMEDIES
Government Taxpayer
Administrative/Extrajudicial
1. Enforcement of Tax Lien 1. Protest
2. Search, Seizure, Forfeiture, Arrest 2. Refund (Abatement/Drawback)
3. Reduction of custom duties/Compromise 3. Abandonment (Express/Implied)

Judicial
1. Civil Action 1. Appeal to CTA
(a) Distraint
(b) Constructive
(c) Levy
2. Criminal Action

Remedies of the Government

ADMINISTRATIVE REMEDIES

GA1 ENFORCEMENT OF TAX LIEN

Liability of Importer for Duties and Taxes: Unless relieved by laws or regulations,
the liability for duties, taxes, fees, and other charges attached to importation constitutes
a personal debt due and demandable against the importer in favor of the government
and shall be discharged only upon payment of duties, taxes, fees and other charges. It
also constitutes a lien on the imported goods which may be enforced while such goods
are under customs' custody (Sec. 1204, TCCP; Sec. 405, CMTA)

Enforcement of Lien: Administrative fines and forfeitures shall be enforced by the

seizure of the vehicle, vessel or aircraft or other property subject to the fine or forfeiture
and by subsequent proceedings. For the purpose of enforcing the lien for customs duties,
fees and other charges on any seized or confiscated article in the custody of the Bureau
of Internal Revenue, the Bureau of Internal Revenue is hereby authorized to impose and
enforce the said lien. (Sec. 2533, TCCP)

[BAR 1997] The BOC normally avails itself of the administrative remedy of seizure, such
as by enforcing the tax lien on the imported articles, instead of the judicial remedy when
the goods to which the tax lien attaches, regardless of ownership, is still in the custody
or control of the government.
(1) XPN: In the case, however, of importations which are prohibited or undeclared,
the remedy of seizure and forfeiture may still be exercised by the BOC even if
the goods are no longer in its custody. (Mamalateo, Reviewer on Taxation, 2014
ed., p. 837)

When the goods are properly released and thus beyond the reach of the tax lien, the
government can seek payment of the tax liability through judicial action since the tax
liability of the importer constitutes a personal debt to the government; therefore,
enforceable by action. (Ibid).

38
GA2-A FORFEITURE

Conditions Affecting Forfeiture of Goods. The forfeiture shall be effected only:

(1) When and while the goods are in:
a) Custody or within the jurisdiction of customs officers, or
b) Possession or custody of or subject to the control of the importer,
exporter, original owner, consignee, agent of another person effecting the
importation, entry or exportation in question, or
c) Possession or custody of or subject to the control of persons who shall
receive, conceal, buy, sell, or transport the same, or aid in any of such
acts
(2) With knowledge that the goods were imported, or were the subject of an attempt
at importation or exportation contrary to law. (Sec. 2532, TCCP; Section 1115,
CMTA)
May be exercised even when the articles are no longer in customs custody UNLESS the
importation is merely attempted, in which case it may be effected only while the goods
are still within the customs jurisdiction or in the hands of a person who is aware thereof.
Sale of Perishable Goods During Forfeiture Proceedings: Upon motion of the
importer of the perishable goods, the goods may be sold at a public auction during the
pendency of the forfeiture proceedings. The proceeds of the auction shall be held in
escrow until the final resolution of the proceedings (Sec. 1118, CMTA).

Burden of Proof in Forfeiture Proceedings: In all proceedings for the forfeiture of

any vehicle, vessel, aircraft, or goods under this Act, the burden of proof shall be borne
by the claimant.
Not subject to compromise (Sec. 1131, CMTA)

Sec. 2530, TCCP;

Property Subject to Forfeiture Under Tariff and Customs Laws
Sec. 1113, CMTA

Vessel, Vehicle and/or Cargo

(a) [Bar 1994] Used unlawfully in the importation or exportation of goods or in conveying or
transporting smuggled goods in commercial quantities into or from any Philippine port or
place.

The mere carrying or holding on board of smuggled goods in commercial

quantities shall subject such vehicle, vessel, aircraft, or any other craft to
forfeiture: Provided, That the vehicle, vessel, aircraft or any other craft is not
used as a common carrier which has been chartered or leased for purposes of
conveying or transporting persons or cargo;
There is no illegal importation when a non-motorized vessel, being towed
by a tugboat, that entered the jurisdiction of the Philippines only for
emergency bunkering needs of the tugboat, which principally navigates
and controls the route. The Court finds the element of intent wanting
(Mamalateo, Reviewer in Taxation, 2014 ed., p. 828; citing Barge v.
COC, CTA, February 17, 2011)
The complementary, if not, collateral use of the place for smuggling
operation is sufficient for it to be deemed to have been used in
smuggling (Llamado v. COC, G.R. No. L-28809, May 16, 1983)

39
 (b) Vessel engaging in the coastwise trade which shall have on board goods of foreign growth,
produce, or manufacture in excess of the amount necessary for sea stores, without such
goods having been properly entered or legally imported;

(c) Vessel or aircraft into which shall be transferred cargo unloaded contrary to law prior to
the arrival of the importing vessel or aircraft at the port of destination;

(d) Part of the cargo, stores, or supplies of a vessel or aircraft arriving from a foreign port
which is unloaded before arrival at the vessels or aircrafts port of destination and without
authority from the customs officer;
XPN: but such cargo, ship, or aircraft stores and supplies shall not be forfeited if
such unloading was due to accident, stress of weather, or other necessity and is
subsequently approved by the District Collector;
Goods

(e) Goods fraudulently concealed in or removed contrary to law from any public or private
warehouse, container yard, or container freight station under customs supervision; [BAR
2008]
(f) Goods, the importation or exportation of which are effected or attempted contrary to law,
or any goods of prohibited importation or exportation, and all other goods which, in the
opinion of the District Collector, have been used, are or were entered to be used as
instruments in the importation or the exportation of the former;
(g) Unmanifested goods found on any vessel or aircraft if manifest therefor is required;
(h) Sea stores or aircraft stores adjudged by the District Collector to be excessive, when the
duties and taxes assessed by the District Collector thereon are not paid or secured
forthwith upon assessment of the same;
(i) Any package of imported goods which is found upon examination to contain goods not
specified in the invoice or goods declaration including all other packages purportedly
containing imported goods similar to those declared in the invoice or goods declaration to
be the contents of the misdeclared package;
(j) Boxes, cases, trunks, envelopes, and other containers of whatever character used as
receptacle or as device to conceal goods which are subject to forfeiture under this Act or
which are so designed as to conceal the character of such goods;
(k) Any conveyance actually used for the transport of goods subject to forfeiture under tbis
Act, with its equipage or trappings, and any vehicle similarly used, together with its
equipment and appurtenances. The mere conveyance of smuggled goods by such
transport vehicle shall be sufficient cause for the outright seizure and confiscation of such
transport vehicle but the forfeiture shall not be effected if it is established that the owner
of the means of conveyance used as aforesaid, is engaged as common carrier and not
chartered or leased, or that the agent in charge thereof at the time, has no knowledge of
the unlawful act; and

(l) Goods sought to be imported or exported:

1. Without going through a customs office, whether the act was consummated,
frustrated, or attempted;
2. Found in the baggage of a person arriving from abroad and undeclared by such
person;

3. Through a false declaration or affidavit executed by the owner, importer, exporter, or

consignee concerning the importation of such goods;

4. On the strength of a false invoice or other document executed by the owner,

importer, exporter, or consignee concerning the importation or exportation of such

40
 goods; or

5. Through any other practice or device contrary to law by means of which such goods
entered through a customs office to the prejudice of the government.

Sec. 2531, TCCP;

Property Subject to Forfeiture Under Tariff and Customs Laws
Sec. 1114, CMTA
[BAR 1994] The forfeiture of the vehicle, vessel, or aircraft shall not be effected if it is
established that the owner thereof or the agent in charge of the means of conveyance used as
aforesaid has no knowledge of or participation in the unlawful act:

Prima facie presumption shall exist against the vehicle, vessel, or aircraft under any of the
following circumstances:

(a) If the conveyance has been used for smuggling before;

(b) If the owner is not in the business for which the conveyance is generally used; and
(c) If the owner is not financially in a position to own such conveyance.

GA2-B SEARCH, SEIZURE, ARREST

Exercise of Police Authority

Police Authority: includes the power to effect search, seizure, and arrest for the
effective implementation of the tariff and customs law

Persons Exercising Police Authority (Sec. 214, CMTA):

(a) Officials of the Bureau, District Collectors, Deputy District Collectors, police officers,
agents, inspectors and guards of the Bureau;
(b) Upon authorization of the Commissioner, officers and members of the Armed Forces
of the Philippines (AFP) and national law enforcement agencies; and
(c) Officials of the BIR on all cases falling within the regular performance of their duties,
when payment of internal revenue taxes is involved.
(d) [Officers generally empowered by law to effect arrests and execute processes of
courts, when acting under the direction of the Collector. (Sec. 2203, TCCP)]

NOTE: All seizures pursuant to this section must be effected in accordance with the
provisions on the conduct of seizure proceedings provided for in Chapters 3 and 4 of
Title XI of this Act. Mission orders shall clearly indicate the specific name carrying
out the mission and the tasks to be carried out (Sec. 214, CMTA).

Authority to Require Assistance and Information: Any person exercising police

authority may demand the assistance of and request information from the Philippine
National Police (PNP), the AFP and other national law enforcement agencies, when
necessary, to effect any search, seizure or arrest. It shall be the duty of any police officer
and other national law enforcers to give such lawful assistance (Sec. 218, CMTA).

Duty of Officer to Disclose Official Character: For the proper exercise of police

41
 authority, any authorized person shall disclose the nature of the authority upon being
questioned at the time of exercise thereof and shall exhibit the corresponding written
authority issued by the Commissioner (Sec. 217, CMTA).

GA2-B-1 SEARCH

Search

Place Where Authority May be Exercised (Sec. 215, CMTA): All persons exercising
police authority as described in the preceding section shall, only exercise powers within
customs premises as provided for in Section 303 of this Act, and within the limits of the
authority granted by the Commissioner, Port and airport authorities in all ports of entry
shall provide authorized customs officers with unhampered access to all premises within
their administrative jurisdiction.

(1) Control Over Premises Used for Customs Purposes: The Bureau shall, for
customs purposes, have exclusive control, direction and management of customs
offices, facilities, warehouses, ports, airports, wharves, infrastructure and other
premises in the Customs Districts, in all cases without prejudice to the general
police powers of the local government units (LGUs), the Philippine Coast Guard
and of law enforcement agencies in the exercise of their respective functions
(Sec. 303, CMTA).

Authority to Enter Properties (Sec. 219, CMTA): Any person exercising police
authority may, at any time, enter, pass through, and search any land, enclosure,
warehouse, store, building or structure not principally used as a dwelling house.
(1) Not considered dwelling: when a security personnel or any other employee
lives in the warehouse, store, or any building, structure or enclosure that is used
for storage of goods, it shall not be considered as a dwelling house for purposes
of this Act.

Authority to Search Dwelling House (Sec. 220, CMTA): A dwelling house may be
entered and searched only upon warrant issued by a Judge of a competent court, the
sworn application thereon showing probable cause and particularly describing the place
to be searched and the goods to be seized.

Authority to Search Vessels or Aircrafts and Persons or Goods Conveyed

Therein (Sec. 221, CMTA): Any person exercising police authority under this Act may
board, inspect, search and examine a vessel or aircraft and any container, trunk,
package, box or envelope found on board, and physically search and examine any
person thereon.
(1) Power to seize: In case of any probable violation of the CMTA, the person
exercising police authority may seize the goods, vessel, aircraft, or any part
thereof
(2) Power to remove obstruction: Such power to search includes removal of any
false bottom, partition, bulkhead, or any other obstruction for the purpose of
uncovering any concealed dutiable or forfeitable goods.

42
 (3) Immunity from damage claims; exception: The proceeding herein
authorized shall not give rise to any claim for damage caused to the goods,
vessel or aircraft, unless there is gross negligence or abuse of authority in the
exercise thereof.

Authority to Search Vehicles, Other Carriers, Persons and Animals

(Sec. 222, CMTA):
(1) For purposes of determining the presence of dutiable or prohibited goods.
(2) Upon reasonable cause
(3) Any person exercising police authority may:
a) Open and examine any box, trunk, envelope, or other container;
b) Search of receptacles used for the transport of human remains and dead
animals.
c) Stop, search, and examine any vehicle or carrier, person or animal
suspected of holding or conveying dutiable or prohibited goods

Authority to Search Persons Arriving from Foreign Countries (Sec. 223, CMTA):
(1) Upon reasonable cause

(2) Travelers arriving from foreign countries may be subjected to search and
detention by the customs officers.

(3) The dignity of the person under search and detention shall be respected at all
times.

(4) Female inspectors may be employed for the examination and search of persons
of their own sex.

Power to Inspect and Visit (Section 224,CMTA): The Commissioner or any customs
officer who is authorized in writing by the Commissioner, may demand evidence of
payment of duties and taxes on imported goods openly for sale or kept in storage.
(1) In the event that the interested party fails to produce such evidence within
fifteen (15) days, the goods may be seized and subjected to forfeiture
proceedings:

(2) During the proceedings, the interested party shall be given the opportunity to
prove or show the source of the goods and the payment of duties and taxes
thereon:

(3) When the warrant of seizure has been issued but subsequent documents
presented evidencing proper payment are found to be authentic and in order, the
District Collector shall, within fifteen (15) days from the receipt of the motion to
quash or recall the warrant, cause the immediate release of the goods seized,
subject to clearance by the Commissioner

(4) Provided that the release thereof shall not be contrary to law.

GA2-B-2 SEIZURE

ALERT ORDER

Alert Orders (Sec. 1111, CMTA): Alert orders are written orders issued by customs
officers as authorized by the Commissioner on the basis of derogatory information
regarding possible noncompliance with this Act.

(1) Effect: (a) suspension of the processing of the goods declaration; (b) conduct of

43
 physical or nonintrusive inspection of the goods within forty-eight (48) hours
from issuance of the order.

(2) Action/Recommendation by alerting officer: Within forty-eight (48) hours

or, in the case of perishable goods, within twenty-four (24) hours from
inspection, the alerting officer shall recommend:
a) Continuance of processing of goods in case of a negative finding, or
b) Issuance of a warrant of seizure and detention if a discrepancy between
the declaration and actual goods is found.

(3) No alert order shall be issued on account of allegations of undervaluation unless

said undervaluation is caused by the submission to customs of forged or spurious
invoice or other commercial documents.

GA2-B-3 SEIZURE

SEIZURE OR RELEASE OF GOODS/VESSEL

Seizure or Release of Goods (Section 1116-1117, CMTA):

(1) Issuing authority: District Collector shall issue an order of release or a warrant
of seizure upon the recommendation of the alerting officer or any other customs
officer.
i. [BAR 1992] Appurtenant to its power under the TCCP to enforce
the provisions of such law, the BOC may conduct searches and
seizures even without the benefit of a warrant issued by a judge
upon probable cause. This is historically considered an exemption
from the constitutional guarantee against unreasonable searches
and seizures (Mamalateo, Reviewer in Taxation, 2014 ed.,
p.838)
(2) Grounds for Issuance of Warrant Seizure: existence of probable cause
a) Nonexistence of probable cause: Issue Order of Release
b) Automatic review: District Collector shall immediately transmit all the
records to the Commissioner who shall automatically review within forty-
eight (48) hours, or within twenty-four (24) hours in case of perishable
goods. When no decision is made by the Commissioner within the
prescribed period, the imported goods shall be deemed released.
(3) Period: (a) perishable goods: 2 days; (b) non-perishable goods: within five (5)
(4) Lifting of Alert Order: The lifting of the alert order shall be issued by the
District Collector only upon the affirmation of the decision of the District Collector
by the Commissioner, or after the lapse of the period of review by the
Commissioner, whichever is earlier.
(5) Description, Classification and Valuation of Seized Goods: The District
Collector shall cause the preparation of a list and particular description,
classification, and valuation of the goods seized and valuation of identical or
similar goods.

Seizure of Vessel or Aircraft for Delinquency of Owner or Officer (Section 1122,

CMTA): the owner, agent, master, pilot in command or other responsible officer of any
vessel or aircraft becomes liable for any violation of this Act, the vessel or aircraft may
be seized and be subjected to forfeiture proceedings for the settlement of any fine or
penalty for which such person is liable. In determining whether or not to seize a vessel
or aircraft, the Bureau shall take into account the amount of fine or penalty in relation to
the commercial impact that be caused to international trade by the seizure or detention

44
 as well as the value of the vessel or aircraft.

Service of Warrant of Seizure:

(1) Purpose: The owner or importer shall be given, an opportunity to be heard
during the forfeiture proceedings. Due process.

(2) To whom served: owner or importer of the goods or the authorized

representative thereof.
a) Owner: For the purpose of serving the warrant, the importer,
consignee, or person holding the bill of lading or airway bill shall be
deemed the owner of the goods.
b) Authorized Representative: For the same purpose, authorized
representative shall include any agent of the owner and if the owner or
the agent is unknown, any person having possession of the goods at the
time of the seizure.

(3) Unknown Owner; Service: Service of warrant to an unknown owner shall be

effected by posting the warrant for fifteen (15) days in a public place at the
concerned district, and by electronic or printed publication. If, within fifteen (15)
days after service of warrant, no owner or agent can he found or appears before
the District Collector, the seized goods shall be forfeited ipso facto in favor of the
government to be disposed of in accordance with the CMTA (Sec. 1121, CMTA).

GA2-B-4 SEIZURE

SETTLEMENT PENDING SEIZURE CASE

Settlement of Pending Seizure Case by Payment of Fine or Redemption of

Forfeited Goods (Sec. 1124, CMTA):
(1) During the course of the forfeiture proceeding, DC may allow the settlement by:
a) Payment of fine
i. In case of settlement by payment of fine, the owner, importer,
exporter, or consignee or agent shall offer to pay a fine equivalent
to thirty percent (30%) of the landed cost of the seized goods.

ii. No settlement by payment of fine shall be allowed when:

o there is fraud, or
o when the discrepancy in duties and taxes to be paid
between what is determined and what is declared
amounts to more than thirty percent (30%).
b) Redemption of forfeited goods
i. In case of settlement by redemption, the owner, importer,
exporter, or consignee or agent shall offer to pay the redeemed
value equivalent to 100% of the landed cost.

(2) Release upon payment; without prejudice to filing of administrative or

criminal case: Upon payment of the fine or payment of the redeemed value,
the goods shall be released and all liabilities which may attach to the goods shall
be discharged without prejudice to the filing of administrative or criminal case.

(3) Approval of Commissioner: Settlement is subject to the approval of the

Commissioner. However, the Commissioner may accept the settlement by
redemption of any forfeiture case on appeal.

(4) Settlement not allowed: Settlement of any seizure case by payment of the
fine or redemption of forfeited goods shall not be allowed when there is:
a) Fraud

45
 b) where the importation is prohibited
c) the release of the goods is contrary to law

GA2-B-5 DECISION

Decision in Forfeiture Cases (Sec. 1125, CMTA):

(1) The DC shall:
Type of Goods Issue of Render of Decision
Order of Hearing
1. Perishable 5 days from issuance 10 days upon
of the warrant termination of the
hearing
2. Non-perishable 15 days from issuance 30 days upon
of the warrant termination of the
hearing
(2) Declaration of Forfeiture; imposition of fines; other actions: The decision
shall include a declaration of forfeiture, the imposition of a fine or such other
action as may be proper.

GA2-B-6-a AUTOMATIC REVIEW IN FORFEITURE CASES

Automatic Review in Forfeiture Cases (Sec. 1127, CMTA): The Commissioner shall
automatically review any decision by the District Collector adverse to the government.

Periods:
Incident Period
1. Entire records of the case 5 days from the promulgation of the
shall be elevated from DC to decision
Commissioner
2. COC shall decide on the Perishable Non-Perishable
automatic review Within thirty Within ten (10)
(30) days from days from receipt
receipt of the of the records
records
4. Elevation from COC to SOF: Within five (5) days for review by the
a. When no decision is Secretary of Finance.
rendered within the
prescribed period
b. Goods with FOB or FCA value
of 10,000,000.00 or more
5. SOF shall decide on automatic Within thirty Within ten (10)
review (30) days from days from receipt
receipt of the of the records
records

The decision issued by the Secretary of Finance, whether or not a decision was rendered
by the Commissioner within thirty (30) days, or within ten (10) days in the case of
perishable goods, from receipt of the records, shall be final upon the Bureau.

GA2-B-6-b APPEAL IN FORFEITURE CASES

Notice of Appeal; Appeal Fee: In forfeiture cases, the person aggrieved by the

46
 decision of a District Collector may file a written notice of appeal, together with the
required appeal fee to the District Collector, furnishing a copy to the Commissioner.
Duty of the DC: The District Collector shall immediately transmit all the records of the
proceedings to the Commissioner.

Period to file Appeal; Review

Type of Goods Period to file Notice of Period to Review
Appeal
1. Perishable 5 days from receipt of the 15 days from receipt of the
decision records
2. Non- 15 days from receipt of 30 days from receipt of the
perishable the decision records

If within thirty (30) days, no decision is rendered, the decision of the District Collector
under appeal shall be deemed affirmed.

An appeal filed beyond the period herein prescribed shall be dismissed as may be proper.

GA2-B-6-c REVIEW BY THE CTA

Unless otherwise provided in this Act or by any other law, the party aggrieved by the
ruling or decisions of the Commissioner may appeal to the CTA, in the manner and within
the period prescribed by law and regulations. Decisions of the Secretary of Finance when
required by this Act, may likewise be appealed to the CTA (Sec. 1136, CMTA).

Unless an appeal is made to the CTA in the manner and within the period prescribed by
law and regulations, the ruling or decision of the Commissioner or the Secretary of
Finance shall be final and executory (Ibid).

An aggrieved party may, within thirty (30) days from receipt of an adverse ruling or
decision, appeal the same to the CTA without prejudice to the authority of the Secretary
of Finance to review decisions adverse to the government in accordance with Sections
1127 and 1128 of this Act, as the case may be (Sec. 1104, CMTA).

[Bar 2002] Where there is no decision as yet by the Commissioner of Customs, which
can be appealed to the CTA, the remedy of prohibition would not lie because the CTA has
not acquired jurisdiction over the seizure case. The writ of prohibition being merely
ancillary to the appellate jurisdiction over it until it has acquired jurisdiction on the
petition fore review. Since there is no appealable decision, the CTA has no jurisdiction
over the petition for review and writ of prohibition (COC v. Alikpala, 36 SCRA
208[1970]).

GA3 REDUCTION OF CUSTOM DUTIES COMPROMISE

Authority of the Commissioner to Make Compromise: Subject to the approval of

the Secretary of Finance, the Commissioner may compromise any administrative case
arising under this Act involving the imposition of fines and surcharges, including those
arising from the conduct of a post clearance audit, unless otherwise specified by law.
(Sec. 2316, TCCP; Sec.1131, CMTA)

Sec. 2316, TCCP Sec.1131, CMTA

COC may compromise any case arising Cases involving forfeiture proceedings shall

47
48
49
ADMINISTRATIVE AND JUDICIAL PROCEDURES RELATVE TO CUSTOMS
SEIZURE AND FORFEITURE

Settlement by payment of fine/redemption of forfeited goods

List of description, classification, valuation

Issuance of Warrant of Seizure

Order of Hearing

50
JUDICIAL REMEDIES

GJ1 CIVIL ACTION

Remedies for the Collection of Duties, Taxes, Fines, Surcharges, Interests, and
Other Charges (Sec. 1132, CMTA): The civil remedies for the collection of import
duties, taxes, fees, or charges resulting from the conduct of a post clearance audit
shall be obtained by:

(a) Distraint of goods, chattels, or effects, and other personal property of whatever
character, including stocks and other securities, debts, credits, bank accounts,
and interest in and rights to personal property, and by levy upon real property
and interest in rights to real property; and

(b) Civil or criminal action.

Either or both of these remedies may be pursued at the discretion of the Bureau;
Provided, That the remedies of distraint and levy shall not be allowed when the amount
of duties and taxes involved is not more than ten thousand pesos ( 10,000.00).

The Bureau shall advance the amounts needed to defray costs of collection by means of
civil or criminal action, including the preservation or transportation of personal property
distrained and the advertisement and sale thereof as well as of real property and
improvements thereon.

GJ1-A DISTRAINT

DISTRAINT OF PERSONAL PROPERTY

Distraint of Personal Property (Sec.1134[A],CMTA): Upon failure of the person owing
any delinquent duty, tax and other charges to pay at the time required, the
Commissioner shall seize and distraint the goods, chattels or effects, and the personal
property, including stocks and other securities, debts, credits, hank accounts, and
interests in and rights to personal property of such persons, in sufficient quantity to
satisfy the duty, tax or other charge and the expenses of the distraint and the cost of the
subsequent sale.

(1) Duty of Officer Serving Warrant of Distraint (WOD): The officer serving the warrant
of distraint shall make or cause to be made an account of the goods, chattels, effects, or
other personal property distrained, a copy of which, signed by the said officer, shall he left
either with the owner or person from whose possession such goods, chattels, or effects or
other personal property were taken, or at the dwelling or other place of business of such
person and with someone of suitable age and discretion, to which list shall be added a
statement of the sum demanded and note of the time and place of sale.

(2) Stocks and Securities: Stocks and other securities shall be distrained by serving a copy
of the warrant of distraint upon the importer and upon the president, manager, treasurer,
or other responsible officer of the corporation, company or association, which issued the
said stocks or securities.

(3) Debts and credits: Debts and credits shall be distrained by leaving with the person owing
the debts or having in his/her possession or under his/her control such credits, or with
his/her agent, a copy of the warrant of distraint. The warrant of distraint shall be sufficient
authority to the person owing the debts or having in his possession or under his control
any credits belonging to the importer to pay to the Commissioner the amount of such
debts of credits.

(4) Garnishment of Bank Accounts: Bank accounts shall be garnished by serving a warrant
of garnishment upon the importer and upon the president, manager, treasurer, or other
responsible officer of the bank Upon the receipt of the warrant of garnishment, the bank

51
 shall turn over to the Commissioner so much of the bank accounts as may be sufficient to
satisfy the claim of the government.

Filing of Report: A report on the distraint shall, within ten (10) days from receipt of the
warrant, be submitted by the Commissioner to the Secretary of Finance
Lifting the Order of Distraint: The Commissioner shall have the power to lift such
order of distraint subject to the rules and regulations promulgated pursuant to this Act.

CONSTRUCTIVE DISTRAINT
Constructive Distraint of the Property (Sec. 1133, CMTA): To safeguard the interest
of the government, the Commissioner may place under constructive distraint the
property of a delinquent importer who, in the opinion of the Commissioner, is: HIR2O
(1) to Hide or conceal the property, or
(2) Intending to leave the Philippines, or
(3) Retiring from any business subject to duty and tax, or
(4) to Remove the property therefrom, or
(5) to perform any act tending to Obstruct the proceedings for collecting the duty
and tax due, or which may be due.

a) How effected: The constructive distraint of personal property shall be

effected by requiring the importer or any person in possession or control
of such property to: NOS
i. Sign a receipt covering the property,
o Refusal or Failure to sign Receipt: In case the
importer or the person in possession and control of the
property sought to be placed under constructive distraint
refuses or fails to sign the receipt herein referred to, the
customs officer effecting the constructive distraint shall
proceed to prepare a list of such property and, in the
presence of two (2) witnesses, leave a copy thereof in
the premises where the property distrained is located,
after which the said property shall be deemed to have
been placed under constructive distraint.

ii. Obligate to preserve the distrained property on the state and

condition at the time of the government's seizure of the same,
and

iii. Not dispose of the same in any manner whatsoever, without the
express authority of the Commissioner.

GJ1-B LEVY

LEVY ON REAL PROPERTY (Sec.1134[B], CMTA).

When levy may be resorted to: After the expiration of the period within which to pay
the duty, tax and other charges as prescribed in this section, real property may be
levied:
(1) Upon the distraint of personal property belonging to the importer
(2) Before the distraint of personal property belonging to the importer
(3) Simultaneously with the distraint of personal property belonging to the importer
(4) after the distraint of personal property belonging to the importer

Warrant of Levy (WOL): To this end, the Commissioner or the duly authorized
representative shall prepare a duly authenticated certificate showing the name of the
importer and the amounts of the duty and tax and penalty due. The certificate shall

52
 operate with the force of a legal execution throughout the Philippines

How effected: The levy shall be effected by writing upon the certificate a description of
the property on which levy is made.

Service of WOL: At the same time, written notice of the levy shall be mailed to or
served upon the: RIAMO
(1) Register of deeds of the province or city where the property is located
(2) Importer
(3) Agent or the Manager of the business from which the liability arose (if the
importer is not in the Philippines)
(4) Occupant of the property in question (if there be no manager)

Insufficiency of distraint: In case the warrant of levy on real property is not issued
before or simultaneously with the warrant of distraint on personal property, and the
personal property of the importer is not sufficient to satisfy the duty and tax due, the
Commissioner or a duly authorized representative shall, within thirty (30) days after
execution of the distraint, proceed with the levy on the real property of the importer.

Within ten (10) days after receipt of the warrant, a report on any levy shall be submitted
by the levying officer to the Commissioner; Provided, That the Commissioner may lift
such warrants of levy issued, subject to the rules and regulations promulgated pursuant
to this Act.

GJ2 CRIMINAL ACTION

Fraud Investigation and Prosecution (Section 1138, CMTA): No criminal case for
violation of this title shall be instituted without the approval of the Commissioner. The
Bureau shall have the power to investigate and institute smuggling cases committed
within its jurisdiction; Provided, That in case of inquest, the same may be instituted by
the apprehending customs officer.

Supervision and Control over Criminal and Civil Proceedings (Sec. 1135, CMTA):
Civil and criminal actions and proceedings instituted on behalf of the Government under
the authority of this Act or other laws enforced by the Bureau shall be brought in the
name of the government of the Philippines and shall be prosecuted and handled by the
Bureau with the assistance of the Department of Justice (DOJ).

Determination of Probable Cause for Filing Criminal and Civil Proceedings;

Approval of Commissioner Required:

(1) The determination of the existence of probable cause and the subsequent filing
of any criminal or civil case with the proper court against violators of this Act
shall exclusively belong to the DOJ:
(2) No civil or criminal action for the recovery of duties or the enforcement of any
fine, penalty or forfeiture under this Act shall be filed in court without the
approval of the Commissioner.

Acquittal in criminal charge not res judicata in seizure or forfeiture proceedings. Criminal
proceedings are action in personam while seizure or forfeiture proceedings are action in
rem.

53
Remedies of the Tax Payer
ADMINISTRATIVE REMEDIES

TA1 PROTEST

Protest: When, a ruling or decision of the District Collector or customs officer involving
goods with valuation, rules of origin, and other customs issues is made the party
adversely affected may appeal by way of protest against such ruling or decision by
presenting to the Commissioner at the time when payment of the amount claimed to
be due the government is made, or within fifteen (15) days thereafter, a written protest
setting forth the objection to the ruling or decision in question and the reasons therefore.

Protest is appropriate when taxpayer is contesting:

Classification Ruling When a declared tariff classification of goods,
not subject of a pending application for advance
ruling, is in dispute, the importer, exporter, or
the Bureau shall submit the matter to the
Commission for a ruling, without prejudice to
the application of Section 1106 of this Act on
protest (Sec. 1100, CMTA)
Valuation Ruling When the valuation method of goods not subject of an
application for advance valuation ruling or the
declared customs value is in dispute, the matter shall
be resolved in accordance with Section 1106 of this
Act on protest (Sec. 1101, CMTA)
Ruling on the Rules of When the declared origin of the goods, not subject of
Origin a request for advance ruling on origin, is in dispute,
the matter shall be resolved in accordance with
Section 1106 of this Act on protest (Sec. 1102,
CMTA)

Exception: Fixing of fines in seizure cases.

Payment under protest: Subject to the approval of the Secretary of Finance, the
Commissioner shall provide such rules and regulations as to the requirement for
payment or nonpayment of the disputed amount and in case of nonpayment, the release
of the importation under protest upon posting of sufficient security.
(1) Under old rule: Sec. 2308. Protest and Payment Upon Protest in Civil
Matters: When a ruling or decision of the Collector is made whereby liability for
duties, taxes, fees or other charges are determined, except the fixing of fines in
seizure cases, the partly adversely affected may protest such ruling or decision
by present Collector at the time when payment of the amount claimed to be due
the government is made, or wit, (15) days thereafter, a written protest setting
forth his objection to the ruling or decision in question with the reason's
therefore. No protest shall be considered unless payment of the amount due
liquidation has first been made and the corresponding docket fee.

Protest Exclusive Remedy in Protestable Case (Sec. 1107, CMTA): In all cases
subject to protest, the interested party who desires to have the action of the District
Collector reviewed, shall file a protest, otherwise the action of the District Collector shall
be final and conclusive.

54
 Form and Scope of Protest (Sec. 1108, CMTA): A protest shall be filed in accordance
with the prescribed rules and regulations promulgated under this section. It shall specify
the particular decision or ruling of the District Collector for which protest is being made,
and shall indicate the particular ground or grounds upon which the protesting party
bases the claim for relief. The scope of a protest shall be limited to the particular goods
subject of a goods declaration, but any number of issues may be raised in a protest with
reference to the goods declaration constituting the subject matter of the protest.

Samples to be Furnished by Protesting Parties (Sec. 1109, CMTA): If the nature of

the goods permit, importers filing protests involving questions offset must, upon
demand, present to the Commissioner samples of the goods which are the subject
matter of the protest. The samples of the goods shall be verified by the customs officer
who made the classification against which the protests are filed.

Decision in Protest: When a protest is filed in proper form, the Commissioner shall
render a decision within thirty (30) days from receipt of the protest. In case the protest
is sustained, in whole or in part, the appropriate order shall be made, and the entry
reassessed, if necessary.

Appeal in Protest Cases: Appeals to protest cases shall be governed by Section 114 of
this Act (Sec. 1126, CMTA).
(1) Under Sec. 114 of the CMTA (Right of Appeal, Forms and Ground):
a) Any party adversely affected by a decision or omission of the Bureau
pertaining to an importation, exportation, or any other legal claim shall
have the right to appeal within fifteen (15) days from receipt of the
questioned decision or order.
b) An appeal in writing shall be filed within the period prescribed in this Act
or by regulation and shall specify the grounds thereof.
c) The Bureau may allow a reasonable time for the submission of
supporting evidence to tbe appeal.

Administrative and Judicial Appeals (Section 1104, CMTA): An aggrieved party may,
within thirty (30) days from receipt of an adverse ruling or decision, appeal the same to
the CTA without prejudice to the authority of the Secretary of Finance to review
decisions adverse to the government in accordance with Sections 1127 (Automatic
Review in Forfeiture Cases) and 1128 (Automatic Review by the Secretary of Finance in
other cases23) of this Act, as the case may be.

Protest vis--vis Forfeiture

Protest Forfeiture
Issue
Validity or propriety of assessment of Validity or legality of importation
goods
Proof Required
1. The collector is wrong No probable cause exists regarding the
2. The assessment and classification illegality of the importation.
Procedure
1. Payment (if required) 1. Warrant of Seizure
15 days

2. Protest before Commissioner 2. After hearing, decision by Collector

[Collector] 15 days
15 days
3. Commissioner of Customs

23 In cases not involving protest or forfeiture.

55
56
57
58
 importation, and are reexported within a reasonable time; and
b) The goods have not been worked, repaired, or used in the country to
which they were exported, and are reimported within a reasonable time.

Use of the goods shall, however, not hinder the refund if such use was
indispensable to discover the defects or other circumstances which caused the
reexportation or reimportation of the goods.

As an alternative to reexportation or reimportation, the goods may be expressly

abandoned or destroyed or rendered commercially valueless under customs
control as the Bureau may decide. In such case, the importer shall not be
entitled to an abatement or a refund if it does not defray the costs of such
abandonment, destruction, or rendition.

(7) Abatement of Duty on Dead or Injured Animals:Where it is certified, under

pain of penalty for falsification or perjury, and upon production of proof
satisfactory to the Bureau that an animal subject of importation dies or suffers
injury before arrival, or while in customs custody, the duty due thereon shall be
abated provided that its carcass on board or in customs custody is removed in
the manner required by the Bureau and at the expense of the importer. (Sec.
910, CMTA).

Refund of Duties and Taxes (Sec. 903, CMTA):

(1) Ground: duties and taxes have been overcharged as a result of an error in the
assessment or goods declaration.
(2) New procedure: Where permission is given by the Bureau for goods originally
declared for a customs procedure with payment of duties and taxes to be placed
under another customs procedure, a refund shall be made of any duties and
taxes charged in excess of the amount due under the new procedure, subject to
such regulation issued for the purpose.
(3) Less than 5k threshold: A refund shall not be granted if the amount of duties
and taxes involved is less than five thousand pesos ( 5,000.00); Provided, That
the Secretary of Finance, in consultation with the Commissioner, may adjust the
minimum amount specified in this Act, taking into account the CPI as published
by the PSA.
(4) Refund Arising from Correction of Errors: Manifest clerical errors made on
an invoice or entry, errors in return of weight, measure and gauge, when duly
certified under penalties of falsification or perjury by the surveyor or examining
officer when there are such officers at the port, and errors in the distribution of
charges on invoices not involving any question of law and certified under
penalties of falsification or perjury by the examining customs officer, may be
corrected in the computation of duties, if such errors are discovered before the
payments of duties, or if discovered within one (1) year after release from
customs custody of imported goods upon written request and notice of error
from the importer, or upon statement of error certified by the District Collector.
For the purpose of correcting errors specified in the next preceding
paragraph, the Bureau is authorized to make refunds within the
statutory time limit (Sec. 912, CMTA).

Investigation Required in Case of Abatements and Refunds (Sec. 911, CMTA): The
Customs Officer concerned shall, in all cases of abatement or refund of duties, submit an
examination report as to any fact discovered which indicates any discrepancy and cause
the corresponding adjustment on the goods declaration.

Claims for Refund (Sec. 913, CMTA): All claims and application for refund of duties
and taxes shall be made in writing and filed with the Bureau within twelve (12)
months from the date of payment of duties and taxes.

59
(1) If as a result of the refund of duties, a corresponding refund of internal revenue
taxes on the same importation becomes due, the Bureau shall cause the refund
of internal revenue taxes in favor of the importer after issuance of a certification
from the Commissioner of Internal Revenue, when applicable.
(2) The importer may file an appeal of a denial of a claim for refund or abatement,
whether it is a full or partial denial, with the Commissioner within thirty (30)
days from the date of the receipt of the denial. The Commissioner shall render a
decision within thirty (30) days from the receipt of all the necessary documents
supporting the application. Within thirty (30) days from receipt of the decision of
the Commissioner, the case may also be appealed to the CTA.
(3) Notwithstanding the provisions in the preceding paragraphs, the filing of claims
for refund of national internal revenue taxes shall be governed by the provisions
provided under the NTRC of 1997, as amended.

60