RATES OF DUTY

General Rules

A. What are the General Rules

observed in the determination
of import duty?
Section 104 provides for the following
rules:
1. All Tariff Sections, Chapters, headings and
subheadings and the rates of import duty under
Section 104 of Presidential Decree No. 34 and
all subsequent amendment issues under
Executive Orders and Presidential Decrees are
hereby adopted and form part of this Code.
2. There shall be levied, collected, and paid
upon all imported articles the rates of duty
indicated in the Section under this Section
except as otherwise specifically provided for in
this Code: Provided, that, the maximum rate

A. What are the General Rules

observed in the determination
of import duty?
Section 104 provides for the following rules:
3.
The rates of duty herein provided or
subsequently fixed pursuant to Section four
hundred one of this Code shall be subject to
periodic investigation by the Tariff Commission
and may be revised by the President upon
recommendation of the National Economic and
Development Authority.
4. The rates of duty herein provided shall apply to
all products whether imported directly or
indirectly of all foreign countries, which do not
discriminate against Philippine export products.
An additional 100% across -the -board duty shall

RATES OF DUTY
Bases of Duty

B. What are the methods in assessing

the dutiable value of an imported
article subject to an AD VALOREM rate
of duty?
Under Section 201, the following are the methods in assessing the dutiable value
of an imported article subject to ad valorem rate of duty:
1. TRANSACTION VALUE 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:
a. The following to the extent incurred by the buyer but not included in price
actually paid:
i. Commission and brokerage fees
ii. Cost of container
iii. Cost of packing
iv. Value of the goods, materials and services used in the production or in
connection with
the production and sale of the imported good
v. Amount of royalties and license fees related to the goods being valued
that the buyer
must pay
b. Value of any of the proceeds of any subsequent resale, disposal or use of the
imported goods
that accrues directly or indirectly to the seller
c. Transport cost of import goods from port of exportation to port of entry in the
Philippines

B. What are the methods in assessing

the dutiable value of an imported
article subject to an AD VALOREM rate
of duty?
Under Section 201, the following are the methods in
assessing the dutiable value of an imported article subject
to ad valorem rate of duty:

2. TRANSACTION VALUE OF IDENTICAL

GOODS 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.

3. TRANSACTION VALUE OF SIMILAR GOODS

where the dutiable value cannot be determined
under the preceding method, the dutiable value
shall be the transaction value of similar goods

B. What are the methods in assessing

the dutiable value of an imported
article subject to an AD VALOREM rate
of duty?
Under Section 201, the following are the methods in assessing the
dutiable value of an imported article subject to ad valorem rate of
duty:

4. DEDUCTIVE VALUE the dutiable value of the imported

goods under this method shall be the deductive value
which shall be based on 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:
a. Either the commissions usually paid or agreed to be paid
or the additions usually made for profit and general
expenses in connection with sales.

B. What are the methods in assessing

the dutiable value of an imported
article subject to an AD VALOREM rate
of duty?
Under Section 201, the following are the methods in assessing the
dutiable value of an imported article subject to ad valorem rate of
duty:

5. COMPUTED VALUE the dutiable value of this method

shall be the computed value which shall be the SUM of:
a. The COST OR THE VALUE OF MATERIALS and
fabrication of other processing employed in producing the
imported goods;
b. The 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;
c. The FREIGHT, INSURANCE FEES AND OTHER
TRANSPORTATION EXPENSES for the importation of the
goods;

B. What are the methods in assessing

the dutiable value of an imported
article subject to an AD VALOREM rate
of duty?
Under Section 201, the following are the methods in
assessing the dutiable value of an imported article subject
to ad valorem rate of duty:

6. FALLBACK VALUE if the dutiable value cannot

be determined under the preceding methods
described above, it shall be determined by using
REASONABLE MEANS consistent with the
principles and general provisions of the
Agreement on Tariffs and Trade of 1994 and of
Article VII of GATT of 1994 and on the basis of
data available in the country of importation.

C. State and explain the basis of

dutiable value of an imported article
subject to an ad valorem tax under the
TCC? (Bar 2005)
The basis of dutiable value of an imported
article subject to an ad valorem tax under the
TCC is its transaction value which shall be the
price actually paid or payable for the goods when
sold for export to the Philippines, adjusted by
adding certain cost elements 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. (Sec. 201, TCC). If such
value could not be determined, then the following
values are to be used respectively; transaction
value of identical goods, transaction value of
similar goods, computed value and fallback

D. For customs valuation, when are

goods identical and when are they
similar?
1. 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.
2. Similar goods goods which although not alike
in all respects have like characteristics and like
component materials which enable them to
perform the same functions and to be
commercially interchangeable. The quality of the
goods, their reputation and the existence of a
trademark shall be among the factors to be
considered in determining whether goods are

E. What are the methods in assessing the dutiable

value of an imported article subject to a SPECIFIC
rate of duty? (Section 202)

1. When dutiable by GROSS WEIGHT- the dutiable

weight thereof shall be the weight of same,
together with the weight of ALL containers,
packages, holders and packing, of any kind, in
which said articles are contained, held or packed
at the time of importation.
2. When dutiable by LEGAL WEIGHT- the dutiable
weight thereof shall be the weight of same,
together with the weight of the IMMEDIATE
containers, holders and/or packing in which
such articles are usually contained, held or
packed at the time of importation and/or, when
imported in retail packages, at the time of their
sale to the public in usual retail quantities.

E. What are the methods in assessing the dutiable

value of an imported article subject to a SPECIFIC
rate of duty? (Section 202)

3. When dutiable by NET WEIGHT- the dutiable

weight thereof shall be only the actual weight of
the articles at the time of importation, excluding
the weight of the immediate and all other
containers, holders or packing in which such
articles are contained, held or packed.
* Articles affixed to cardboard, cards, paper, wood or similar
common material shall be dutiable together with the weight of
such holders.
* When a single package contains imported articles dutiable
according to different weights, or to weight and value, the
common exterior receptacles shall be prorated and the different
proportions thereof treated in accordance with the provisions of
this Code as to the dutiability or non -dutiability of such packing.

F. When shall these rates of duty

apply?
1. When articles are entered into, or
withdrawn from warehouse, from the
Philippines for consumption. (Section 204)
2. If abandoned, forfeited to, or seized by
the government, then sold at public
auction, rates of duty and tariff will be
those in force at the date of auction,
provided that if based on specific rates,
the rate of duty and tariff will be that in
force at the time of entry , or date of
abandonment, forfeiture, or seizure.

G. When are imported articles

deemed entered in the
Philippines for consumption?
It is when the specified entry form is
properly filed and accepted, together with
any related documents required by the
provisions of this Code and/or regulations to be
filed with such form at the time of entry, at the
port or station by the customs official
designated to receive such entry papers
and any duties, taxes, fees and/or other
lawful charges required to be paid at the time
of making such entry have been paid or secured
to be paid with the customs official designated
to receive such monies, provided that the
article has previously arrived within the

H. When are imported articles deemed

withdrawn from warehouse in the
Philippines?
It is when the specified form is
properly filed and accepted, together
with any related documents required by any
provisions of this Code and/or regulations to
be filed with such form at the time of
withdrawal, by the customs official
designated to receive the withdrawal
entry and any duties, taxes, fees and/or
other lawful charges required to be paid
at the time of withdrawal have been
deposited with the customs official
designated to receive such payment.

J. What shall the commercial invoice of

imported articles contain?
a. The place where, the date when, and the person by whom
and the person to whom the articles sold or agreed to be
sold, or if to be imported otherwise than in pursuance of a
purchase place from which shipped, the date when the
person to whom and the person by whom the shipped:
b. The port of entry to which the articles are destined:
c. A detailed description of the articles according to the terms
of the heading or subheadings, if specifically mentioned in
this code, otherwise the description must be in sufficient
detail to e, the articles to be identified both for tariff
classification and statistical purposes, indicating correct
commodity description, in customary terms or commercial
designation, including the grade or quality, numbers, marks
or symbols under which they are sold by the seller or

J. What shall the commercial invoice of

imported articles contain?
d. The quantities in the weights and
measures of the country or place form
which the articles are shipped, and in the
weights and measures used in this Code;
e. The purchase price of each article in the
currency of the purchase and in the unit of
the quantity which the articles were
bought and sold in the place of country of
exportation, if the articles are shipped in
pursuance of a purchase or an agreement
to purchase;

J. What shall the commercial invoice of

imported articles contain?
f. If the articles are shipped otherwise than
in pursuance of the purchase or an
agreement to purchase, the value of each
article in the unit of quantity in which the
articles are usually bought and sold, and in
the currency in which the transactions are
usually made, or, in the absence of such
value, the price in such currency which the
manufacturer, seller, shipper or owner
would have received, or was willing to
receive, for such articles if sold in the
ordinary course of trade and the usual

J. What shall the commercial invoice of

imported articles contain?
g. All charges upon the articles itemized by
name and amount when known to the
seller or shipper; or all charges by name
(e.g., commission, insurance, freight,
cases, containers, coverings and cost of
packing) included in invoice prices when
the amount for such charges are unknown
to the seller or shipper;
h. All discounts, rebates, drawbacks and
bounties separately itemized allowed upon
the exportation of the articles, all internal
and excise taxes applicable to the home

J. What shall the commercial invoice of

imported articles contain?
i. The current home consumption value or
price of which same, like or similar article
is offered or for sale for exportation to the
Philippines, on the date the invoice is
prepared or the date of exportation; and,
j. Any other facts deemed necessary to a
proper examination, appraisement and
classification of the articles which the
Commissioner may require.

K. What are the special duties

under TCC?
1. Dumping (Sec 301)
2. Countervailing
3. Marking
4. Discriminatory
5. Additional tariff imposed as a safeguard
measure under the Safeguard Measure
Act (R.A. 8800).

L. What is Dumping?
It is when any product, commodity or
article of commerce imported into the
Philippines at an export price less
than its normal value in the ordinary
course of trade for the like product,
commodity
or
article
destined
for
consumption in the exporting country is
causing or is threatening to cause material
injury to a domestic industry, or materially
retarding the establishment of a domestic
industry producing the like product
(Section 301).

M. What must be shown to

initiate anti-dumping
investigation?
a) evidence of dumping
b) injury
c) causal link between the dumped
imports and the alleged injury.

N. What is
countervailing?
It is when any product, commodity or
article of commerce is granted
directly
or
indirectly
by
the
government in the country or 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,
commodity or article has caused or
threatens to cause material injury to a
domestic industry or has materially

O. When is there
subsidy?
(1) When the government or any public
body in the country of origin or export of
the imported product, commodity or
article extends financial contribution to
the producer, manufacturer or exporter
of such product, commodity or article; or
(2) When there is a benefit conferred.

P. What is Marking?
Except as hereinafter provided, it is where
every article of foreign origin (or its
container) imported into the Philippines
shall be marked in any official language of
the Philippines and in a conspicuous place
as legibly, indelibly and permanently as
the nature of the article (or container) will
permit in such manner as to indicate to an
ultimate purchaser in the Philippines the
name of the country of origin of the article
(Section 303). If the article or container
thereof is not marked, a marking duty will

Q. What is
discrimination?
It is when a country imposes,

directly or
indirectly, any unreasonable charge, exaction,
regulation or limitation which is not equally
enforced upon the like articles of every foreign
country; or
2. When such country 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
1.

IMPOSITION OF
DUTIES

A. Who are the persons

liable for customs duties
and
tariff?
It is when a country imposes, directly

or
indirectly, any unreasonable charge, exaction,
regulation or limitation which is not equally
enforced upon the like articles of every foreign
country; or
2. When such country 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
1.

B. What is the nature of

the liability of an importer
for duties?
1. The liability for duties, taxes, fees and other
charges attaching on importation constitutes a
personal debt due from the importer to the
government which can be discharged only by
payment in full of all duties, taxes, fees and other
charges legally accruing.
2. It also constitutes a lien upon the articles
imported which may be enforced while such
articles are in custody or subject to the control of
the government.

C. Is the government also liable

for customs duties and tariff for
its own importation?

All importations by the Government for its

own use or that of its subordinate
branches
or
instrumentalities,
or
corporations, agencies or instrumentalities
owned or controlled by the government
shall be subject to the duties, taxes, fees
and other charges provided for in this
code, except when such importation is a
conditionally-free importation as provided
under Section 105 of this Code.

D. What is import entry?

It is a declaration to the Bureau of

Customs showing the description, value,
tariff classification and other particulars
of the imported article to enable the
customs authorities to determine the
correct customs duties and internal
revenue taxes due on the importation.

E. When is import entry

required?

General Rule: All imported articles shall

be subject to formal or informal entry.
Exception: Except containers for reexport subject to conditionally freeimportation. (Sec. 1302, TCC as amended
by RA 9135)

F. What are the kinds of import entry

and what articles do they cover?
1. Informal entry
a. Articles of a commercial nature intended for
sale, barter
or hire, the dutiable value of
which is P2,000 or less
b. Personal household effects or articles, not in
commercial
quantity,
imported
in
passengers baggage, mail or otherwise, for
personal use
2. Formal entry The TCC does not provide for a
listing of articles that are required to be cleared
on a formal entry. The Customs Commissioner
may, upon instruction for the protection of the
Finance Secretary, for the protection of

G. Who are the persons authorized to

make import entry?
1. The importer, being the holder of a bill
of lading;
2. A duty licensed customs broker acting
under authority from a holder of a bill;
3. A person duly empowered to act as
agent or attorney-in-fact for each holder
of the bill of lading (Sec. 1301, TCC as
amended by R.A. 9135)

H. What shall the import

entry declare?
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;
c. That, to the best of the declarant's information and belief,
all the invoke and bills of lading to the articles are the only
ones in existence relating to the importation in question and
that they are in the state in which they were actually
received by him;
d. That, to the best of the declarant's information and belief,

I. What are other

requirements for the
import entry?

a. The declaration shall be signed, under penalties

of falsification or perjury, by the importer,
consignee or holder of the bill, by or for whom the
entry is effected (Section 1305).
b. Shall be in the required number of copies in such
forms as prescribed by regulations, signed by the
persons making such entry, shall contain the
names of the importing vessel or aircraft, port of
departure and date of a the number and mark of
packages, or the quantity, if in bulk, the nature
and correct commodity description of the articles
contained therein, and its value as set forth in a
proper invoice to be presented in duplicate the
entry;

J. What are the duties of the customs

officer tasked to examine, classify, and
appraise imported articles?
1.

Determine whether the packages designated for

examination and their contents are in accordance with the
declaration in the entry, invoice and other pertinent
documents

2. Make a return in such a manner to indicate whether the

articles have been truly and correctly declared in the entry
as regard their quantity, measurement, weight and tariff
classification and not imported contrary to law
3. Submit sample to the laboratory for analysis when feasible
to do so and when such analysis is necessary for the proper
classification, appraisal, and/or admission into the
Philippines of imported articles
4. Determine the unit of quantity in which they are usually
bought and sold and appraise the imported articles in
accordance with Section 201 of the TCC. (Sec. 1403, TCC)

K. Is the classification and

appraisal by the Collector of
Customs final?
General Rule: Appraisal, classification return as finally passed upon and approved
or modified by the Collector shall not be altered or modified in any manner.
Exceptions: Readjustment may be made:
1.

Within one year after payment of the duties, upon statement of error in
conformity with Sec. 1707 of the TCC, approved by the Collector. Sec. 1707
provides for the correction of manifest clerical errors made in an invoice or
entry, errors in return of weight, measure and gauge, when duly certified to,
under penalties of falsification or perjury, by the surveyor or examining official
(when there are such officials at the port), and errors in the distribution of
charges on invoices not involving any question of law and certified to, under
penalties of falsification or perjury, by the examining official

2. Within fifteen days after such payment upon request for reappraisal and/or
reclassification addressed to the Commissioner by the Collector, if the appraisal
and/or classification is deemed to be low.
3. Upon request for reappraisal and/or reclassification, in the form of a timely
protest addressed to the Collector by the interested party if the latter should be
dissatisfied with the appraisal or return.

4. Upon demand by the Commissioner of Customs after the completion of

L. When are customs duties

computed and paid?
The Philippines adopts the self-assessment
system. Thus, it is the importer which
initially determines the customs duties and
other charges due from him and pays the
same. However, his computation and
payment is subject to the review of the
taxing authorities.

M. What is meant by
liquidation?
Liquidation
is
the
final
computation
and
ascertainment by the Collector of Customs of the
duties due on imported merchandise based on
official reports as to the quantity, character and
value thereof, and the Collector of Customs' own
finding as to the applicable rate of duty. It is akin
to an assessment of internal revenue taxes under
the NIRC where the tax liability of the taxpayer is
definitely determined. Liquidation is considered to
have been made when the entry is officially
stamped liquidated. (Pilipinas Shell Petroleum
Corporation v. Republic of the Philippines, etc., G.
R. No. 161953, Mar. 6, 2008)

N: When is liquidation
deemed final?
An assessment or liquidation by the Bureau of
Customs attains finality and conclusiveness
three (3) years from the date of the
final payment of duties except when:
1. There was fraud;
2. There is a pending protest; or
3. The liquidation of import entry was merely
tentative. (Sec. 1603 TCC, as amended by
R.A. 9135)

O: When is there 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. (Sec.
1602, TCC)

THE END