Choosing right Commodity Code
When importing anything from anywhere your item will pass through customs at the border. The correct commodity code enables correctly classify imported items and enables you to pay the correct tax and duties.
As a trader you always will be looking for ways to reduce the taxes. One desperate ways is to choose a commodity code which has the least fees. This may help in the short term, but as an experienced person importing good, I would recommend taking all steps necessary in choosing the right commodity code.
The Binding Tariff Information ( BTI ) decision is the right way to do this if you wanted a sustainable supply chain for your business.
The most straightforward way to choose the correct commodity code is to ask your manufacturer. Since your manufacturer is in business doing this for a very long time, he may know the correct code to use and avoid problems. You can consider double checking this again with you other contingent manufacturer. If you have a trader in between your supply flow you can confirm this again with him or her. If you depend on a freight forwarder for door delivery or warehouse delivery or storage facility delivery, then you can ask them to confirm.
Now that you have asked everyone about this commodity code, there is very little chance that your shipment will be held for customs violation. Shipment if held by customs can reduce the ready to market time consequently creating a ripple effect on to your bottom line.
Customs violation problems due to wrong commodity code
The biggest problem is getting in the customs’ records for violation. Since you already have an infraction recorded in the system, then next time your shipment arrives the system autonomously adds it on to customs check sample verification.
Some customs checks may need to be carried out in an offsite location and can add up more time to receive your shipment. Not to mention the response plan that you will have to draft and the evidences you have to share, etc.
What is Binding Tariff Information (BTI) decision ?
A Binding Tariff Information (BTI) decision is a pre-compiled accurate commodity code classification for everything you intend to import . Many do not consider doing this as this is not mandatory and has a expiry date.
Advantages of choosing the correct commodity code
The first and foremost advantage of doing this is that you eliminate uncertainty in the shipment arrival.
With a Binding Tariff Information (BTI) decision the customs duties are notified well in advance. Shipments with this tag are recognized as low risk and flagged less for mandatory customs check.
This also helps if you are exporting, specially any food item or agricultural products. You will know the eligible export refunds that you can claim as its very clearly listed within this document. While importing certain items there are licensing requirements, quotas or other restrictions. Most new traders import items without giving any regards to these norms and mandates. A Binding Tariff Information (BTI) decision lists all the import or export licensing requirements.
Some items may include quotas or other quantitative restrictions. The only way to be sure about it by asking the right authority or having a Binding Tariff Information (BTI) decision.