Are the tariff classifications that you are using being correctly applied? Have they been determined in accordance with the General Interpretive Rules and Canadian Rules as set out in the Tariff Schedule and for legal purposes has the classification been determined according to the terms of the Heading and any relative Section or Chapter Notes? These are the questions that must be answered in order to establish that you have correctly applied the correct classification number and the corresponding duty rate.
There are many situations where the tariff classification of a product due to its composition and features and overall complexity may appear to fall under more than one tariff classification with varying duty rates. These should be carefully evaluated to ensure that you are not paying more than you should be and equally important that there is not the possibility that another classification with a higher duty rate exists which may be discovered during a subsequent customs verification audit.
Wherever there are questionable classifications these should be thoroughly reviewed to ensure that the classification applied is correct, consistent and legally defensible to maintain your compliance responsibilities and to avoid unnecessary customs reviews. If the classification of the product being considered cannot be clearly determined by reference to the relative Headings, Section and Chapter Notes, or the Explanatory Notes, then you should consider obtaining an Advance Ruling from the Canada Border Services Agency (CBSA). This will afford you the protection against a potential audit and avoid the possibility of future reassessments for duty.
Even when an Advance Ruling is obtained there may still be differing opinions as to the correct classification of the article due to different interpretations of the relevant authorities. Advance Rulings may be appealed but generally such appeals are affirmed in favour of the original CBSA determination unless compelling reasons are presented that would overturn that decision. This leaves only one further avenue of appeal open to you which is an appeal to the Canadian Import Trade Tribunal (CITT).
If you have goods being imported under questionable classifications, you may wish to contact our Consulting Department at Thompson Ahern International to further discuss the merits of those classifications with a view to possibly obtaining an Advance Ruling from CBSA where warranted.
Ron Stefaniuk, CCS
Thompson Ahern International
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