A Quick Introduction to the GIR for Classification (please be advised the description given to each Rule are for ease of reference and understanding only) 151 GIR # Part / Sub. Description (for ease of reference) 1 Main Rule: Classify Goods as they are Presented 2 A B (A) Presentation vs. Identification (B) Mixtures of Goods 3 A B C (A) Most Appropriate Heading (B) Sets of Goods, for Retails Sale (C) Numeric Order of Classification 4 Goods Most Akin / Alike 5 A B (A) Protective Cases & Packing Materials (B) Packing & Packing Material 6 Sub-heading Qualifiers & Specifics
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Meaning of “Terms of the Heading” or “Terms of Notes” We will often encounter the phrase “Terms of the Tariff Headings” or , “Terms of the Section or Chapter Notes” The word “terms” refers to how something is expressly described or defined within a Tariff Heading, or Notes. For example: If you have to classify a horse, then the item is expressly described as a horse. However, how is that horse defined? Is it a live horse, or a horse found on a merrygo-round at carnivals. This will therefore define the classification under the appropriate tariff heading. • Live Horses: TH 01.01 • Festive, carnival or other articles (merry-go-rounds): TH 95.05 153
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GIR No. 1 – Main TH Classify Goods as they are Presented We have deconstructed Rule No. 1 into 3 “parts” for better understanding: • Part 1 – Classification is determined by the terms of the Tariff Headings, • Part 2 – And, according to any relative Section or Chapter Notes, • Part 3 – And, provided such Headings or Notes do not otherwise require, according to the following provisions: the Section and Chapter Titles are provided for ease of reference only and have no legal bearing on classification and have therefore been drawn up in concise and very general terms. 155
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GIR No. 1 Part 1 Explained (Main TH) Part 1: “Classification is determined by the terms of the Tariff Headings” 157 In explanation: • My commodity / item is a live horse. • Chapter 1 covers “ALL LIVE ANIMALS” • Tariff Heading 01.01 specifically covers “Live horses”, therefore, the item being a live horse i.t.o. Rule 1 Part 1, shall remain classifiable under Tariff Heading 01.01 Rule 1 Part 2 continues on next page ...
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GIR No. 1 Part 2 Explained (Section + Chapter Notes) Part 2: “And, any relative Section or Chapter Notes” To explain: Tariff Heading 30.06 refers to “Pharmaceutical goods specified in Note 4 to this Chapter”: Specifically …. Heading 30.06 applies only to the following, which are to be classified in that heading and in no other heading of this Schedule: a) Sterile surgical catgut, similar sterile suture materials (including sterile absorbable surgical or dental yarns) and sterile tissue adhesives for surgical wound closure; b) Sterile laminaria and sterile laminaria tents; c) .... Other notes ….. Rule 1 Part 3 continues on next page ..... 159
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GIR No. 1 Part 3 Explained (Other Forms of Presentation) Part 3: “And, provided such Headings or Notes do not otherwise require, according to the following provisions” To Explain: • My commodity is that of Chemical Fertilizers being nitrogenous. • This item falls under Chapter 31, “FERTILIZERS”, classifiable specifically under Heading 31.02. • By referring to Note 2 of Chapter 31, it says that Heading 31.02 applies only to the following goods, provided that they are not put up in the forms or packages described in heading 31.05 (…a gross mass not exceeding 10 kg): a) Goods which answer to one or other of the descriptions given below: (i) sodium nitrate, whether or not pure; (ii) ammonium nitrate, whether or not pure; (iii) double salts, whether or not pure, of ammonium sulphate, ..... 161
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GIR No. 2 2(A): Presentation vs. Identification RULE 2 comprises of Sub Rules A & B 2(A) ANY REFERENCE IN A HEADING TO AN ARTICLE SHALL BE TAKEN TO INCLUDE A REFERENCE TO THAT ARTICLE INCOMPLETE OR UNFINISHED, PROVIDED THAT, AS PRESENTED, THE INCOMPLETE OR UNFINISHED ARTICLE HAS THE ESSENTIAL CHARACTER OF THE COMPLETE OR FINISHED ARTICLE. IT SHALL ALSO BE TAKEN TO INCLUDE A REFERENCE TO THAT ARTICLE COMPLETE OR FINISHED (OR FALLING TO BE CLASSIFIED AS COMPLETE OR FINISHED BY VIRTUE OF THIS RULE), PRESENTED UNASSEMBLED OR DISASSEMBLED. Explanatory Note to Rule 2 (A) with examples on next page ... 163
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GIR No. 2(A) Explained Incomplete or unfinished articles refers to incomplete or unfinished articles that can, as presented, already be deemed to have the essential character of the corresponding complete or finished article. Examples: • Chapter 61 General Notes, reflect that garments incomplete or unfinished, but having the characteristic of the complete or finished articles, remains classified within the chapter. • A motor vehicle, not yet fitted with the wheels or tyres or battery… • The term “Blank”, means an article, not ready for direct use, having the approx. shape or outline of finished article or part, and may only be used for completion into the finished article or part. Rule 2 (B) to follow on next page ... 165
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GIR No. 2 2(B): Mixtures of Goods 2(B) ANY REFERENCE IN A HEADING TO A MATERIAL OR SUBSTANCE, SHALL BE TAKEN TO INCLUDE A REFERENCE TO MIXTURES OR COMBINATIONS OF THAT MATERIAL, OR SUBSTANCE WITH OTHER MATERIALS OR SUBSTANCES. ANY REFERENCE TO GOODS OF A GIVEN MATERIAL OR SUBSTANCE SHALL BE TAKEN TO INCLUDE A REFERENCE TO GOODS CONSISTING WHOLLY OR PARTLY OF SUCH MATERIAL OR SUBSTANCE. THE CLASSIFICATION OF GOODS CONSISTING OF MORE THAN ONE MATERIAL OR SUBSTANCE SHALL BE ACCORDING TO THE PRINCIPLES OF RULE 3. Explanatory Note to Rule 2 (B) with an example on next page ... 167
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GIR No. 2(B) Explained With reference to mixtures and combinations of materials or substances, this rule covers the classification of goods comprising of mixtures, combinations of materials, or substances and goods consisting of two or more materials or substances. Examples: Mixtures of the products of headings 09.04 to 09.10 Chapter 9, being Coffee, Tea and Spices are to be classified as follows: a) Mixtures of 2 or more of the products of the same heading are to be classified in that heading: I.e. Coriander of 0909.20 and caraway of 0909.60 will be classified in heading 0909, where the subheading will depend on the majority % of the two: I.e. Coriander = 60% & caraway = 40%, applicable TH will be 0909.20 b) Mixtures of 2 or more of the products of different headings are to be classified under heading 09.10: I.e. Pepper of 09.04 and coriander of 09.09 will be classified in heading 09.10 [specifically 0910.91 as per Chapter Note 1(b)] 169
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GIR No. 3 3(A): Most Appropriate Heading RULE 3 comprises of Sub Rules A,B & C: WHEN BY APPLICATION OF RULE 2(B), OR FOR ANY OTHER REASON, GOODS ARE PRIMA FACIE (meaning “based on 1 st impression) CLASSIFIABLE UNDER TWO OR MORE HEADINGS, CLASSIFICATION SHALL BE EFFECTED AS FOLLOWS: 3(A) THE HEADING WHICH PROVIDES THE MOST SPECIFIC DESCRIPTION SHALL BE PREFERRED TO HEADINGS PROVIDING A MORE GENERAL DESCRIPTION. HOWEVER WHEN TWO OR MORE HEADINGS EACH REFER TO PART ONLY OF THE MATERIALS OR SUBSTANCES CONTAINED IN MIXED OR COMPOSITE GOODS OR TO PART ONLY OF THE ITEMS IN A SET PUT UP FOR RETAIL SALE, THOSE HEADINGS ARE TO BE REGARDED AS EQUALLY SPECIFIC IN RELATION TO THOSE GOODS, EVEN IF ONE OF THEM GIVES A MORE COMPLETE OR PRECISE DESCRIPTION OF THE GOODS. See definition and example on next slide… 171
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GIR No. 3(A) Explained A specific description means a description by name is more specific than a description by class. In other words, Headings that mention goods by name are always considered more Specific than headings covering groups of goods. 173 Example: Electric shavers: • TH 8508 – Electro-mechanical tools for working in the hand, with self contained electric motor • TH 8509 – Electro-mechanical domestic appliances, with self contained electric motor • TH 8510 – Shaver, hair-clippers and hair removing appliances with self contained electric motor Which one should apply? See next slide…
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GIR No. 3(A) Explained A specific description means a description by name is more specific than a description by class. In other words, Headings that mention goods by name are always considered more Specific than headings covering groups of goods. 175 Example: Electric shavers: • TH 8508 – Electro-mechanical tools for working in the hand, with self contained electric motor • TH 8509 – Electro-mechanical domestic appliances, with self contained electric motor • TH 8510 – Shaver, hair-clippers and hair removing appliances with self contained electric motor NO NO !
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GIR No. 3 3(B): Sets of Goods, for Retails Sale 3(B) MIXTURES, COMPOSITE GOODS CONSISTING OF DIFFERENT MATERIALS OR MADE UP OF DIFFERENT COMPONENTS AND GOODS PUT UP IN SETS FOR RETAIL SALE, WHICH CANNOT BE CLASSIFIED BY REFERENCE TO 3 (A), SHALL BE CLASSIFIED AS IF THEY CONSISTED OF THE MATERIAL OR COMPONENT WHICH GIVES THEM THEIR ESSENTIAL CHARACTER, INSOFAR AS THIS CRITERION IS APPLICABLE. Explanatory Note to Rule 3(B) with an example on next page ... 177
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GIR No. 3(B) Explained Rule 3(B) relates to a combination of goods and sets put up for retail sale. The essential character may be based on volume, quality, quantity, weight and value. Example: • A pencil sharpener (TH 8214) with a shavings container made of plastic (TH 3926), belongs entirely to Tariff Code 8214.10 as the pencil sharpener gives the article its essential character. In this instance the essential character is based on the importance for the use of the article. • A hair care set, comprising of an electric hair clipper (TH 8510), a comb (TH 9615), scissors (TH 8213), a brush (TH 9603), and a textile towel (TH 6302), are all packed in a leather case (TH 4202). The set would thus be classified in TH 8510 giving the set its essential character. 179
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GIR No. 3 3(C): Numeric Order of Classification Rule 3(C): WHEN GOODS CANNOT BE CLASSIFIED BY REFERENCE TO 3(A) OR (B), THEY SHALL BE CLASSIFIED UNDER THE HEADING WHICH OCCURS LAST IN NUMERICAL ORDER AMONG THOSE THAT EQUALLY MERIT CONSIDERATION. Note to RULE 3(C) Explained: • If goods cannot be classified by reference to Rule 3(a) or (b), they are to be classified in the heading which occurs last in numerical order. Example: • A set of pliers of TH 8202.30, plus sockets of TH 8204.20, and screwdrivers of TH 8205.40, all packed in a plastic case of TH 42.02, then the most appropriate TH would be 8206.00 as it describes sets of tools classifiable from TH 82.02 to 82.05 put up in sets for retail sale (the plastic case might be packaging only). • Here the last specific tariff heading last in numerical order applied. 181
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GIR No. 4 Goods Most Akin / Alike GOODS WHICH CANNOT BE CLASSIFIED IN ACCORDANCE WITH THE PREVIOUS RULES SHALL BE CLASSIFIED UNDER THE HEADING APPROPRIATE TO THE GOODS TO WHICH THEY ARE MOST AKIN 183 RULE 4 Explained • In utilizing this Rule, it is necessary to compare the presented goods with similar goods. • In order to establish a kinship, can depend on many factors, such as description, character, purpose, etc. • It also allows for the creation of new subheadings when compared with tariff headings for similar goods.
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GIR No. 5 5(A): Protective Cases & the Like RULE 5 Consists of Sub-Rules A & B: IN ADDITION TO THE FOREGOING PROVISIONS, THE FOLLOWING RULES SHALL APPLY IN RESPECT OF THE GOODS REFERRED TO THEREIN: 5(A) CAMERA CASES, MUSICAL INSTRUMENT CASES, GUN CASES, DRAWING INSTRUMENT CASES, NECKLACE CASES AND SIMILAR CONTAINERS, SPECIALLY SHAPED OR FITTED TO CONTAIN A SPECIFIC ARTICLE OR SET OF ARTICLES, SUITABLE FOR LONG-TERM USE AND PRESENTED WITH THE ARTICLES FOR WHICH THEY ARE INTENDED, SHALL BE CLASSIFIED WITH SUCH ARTICLES WHEN OF A KIND NORMALLY SOLD THEREWITH. THIS RULE DOES NOT HOWEVER APPLY TO CONTAINERS, WHICH GIVE THE WHOLE ITS ESSENTIAL CHARACTER. Explanatory Note to Rule 5(A) with an example on next page ... 185
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GIR No. 5(A) Explained RULE 5(A) – Protective Cases: The Rule covers the type of containers that are normally sold with the articles with which they are used, and which are normally specially shaped or fitted to accommodate such articles. Examples: • Camera cases presented with cameras, specific to that make of camera, or • Guitar cases presented with guitars, specific to that make and size of guitar. 187
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GIR No. 5 5(B): Packaging Material & Dunnage 5(B) SUBJECT TO THE PROVISIONS OF RULE 5(A), ABOVE PACKING MATERIALS AND PACKING CONTAINERS PRESENTED WITH THE GOODS THEREIN, SHALL BE CLASSIFIED WITH THE GOODS IF THEY ARE OF A KIND NORMALLY USED FOR PACKING SUCH GOODS. HOWEVER, THIS PROVISION IS NOT BINDING WHEN SUCH PACKING MATERIALS OR PACKING CONTAINERS ARE CLEARLY SUITABLE FOR REPETITIVE USE. Note: Where packaging material such as returnable pallets, boxes (i.e. clip boxes for car engines) or any other type of returnable rack / racking is to be re-exported to the supplier, then such goods must be classified separately. 189 Explanatory Note to Rule 5(B) with an example on next page ...
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GIR No. 5(B) Explained Rule 5(B): This rule covers packaging or packing materials and / or packing containers that are normally used for the packing of the goods to which they relate. 191 Examples: • Short term packaging, i.e. cellophane packaging found when clothing is being imported, or • Pressured containers for gas used repetitively
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GIR No. 6 Sub-heading Qualifiers & Specifics • FOR LEGAL PURPOSES, THE CLASSIFICATION OF GOODS IN THE SUBHEADING OF A HEADING, SHALL BE DETERMINED ACCORDING TO THE TERMS OF THOSE SUBHEADINGS, AND • ANY RELATED SUBHEADING NOTES, AND MUTATIS MUTANDIS (meaning necessary changes), TO THE ABOVE RULES (GIR 1 – 5), ON THE UNDERSTANDING THAT ONLY SUBHEADINGS AT THE SAME LEVEL ARE COMPARABLE. • FOR THE PURPOSES OF THIS RULE THE RELATIVE SECTION AND CHAPTER NOTES ALSO APPLY, UNLESS THE CONTEXT OTHERWISE REQUIRES. RULE 6 Explained (example on next page) Sublevel headings must be adhered to in terms of specifics relating to classifying according to this rule (Sub-headings being qualifiers and Tariff Codes being item specifics: Refer to Level Indicators or dashes for ease of reference. (i.e. Level 1 - | Level 2 - - | Level 3 - - -) See Example on next page…193
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GIR No. 6 Example A framed glass mirror is found to be classified in TH 7009. First we need to ask, how is it presented, and secondly we need to know what will it be used for. Which sub-heading is more appropriate? 195 NO NO NO YES!
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Section and Chapter Notes to Schedule 1 Part 1 197
198 • A Section Note refers to the range or group of chapters included in that specific industry section. I.e. the section notes to Section 1 covers Chapters 1 to 5 only, and so forth. • A Chapter Note is confined to information on that particular chapter and the headings which are included there. In other words, the notes to Chapter 4 pertain to the headings from 04.01 to 04.10 only, and so forth. Sections and Chapters: Schedule1 Part 1 Example of Section Notes SECTION: I LIVE ANIMALS; ANIMAL PRODUCTS NOTES: 1. Any reference in this Section to a particular genus or species of an animal, except where the context otherwise requires, includes a reference to the young of that genus or species. 2. ............... Example of Chapter Notes: CHAPTER: 1 LIVE ANIMALS NOTES: 1. This Chapter covers all live animals except the following: (a) fish and crustaceans, molluscs and other aquatic invertebrates, of heading 03.01, 03.06 or 03.07; (b)..............
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SECTION Notes With reference to SECTION NOTES the main types refer to: 1. Exclusions 2. Definitions 3. Classification provisions 4. Limitation of scope 200 SECTION: VI PRODUCTS OF THE CHEMICAL OR ALLIED INDUSTRIES NOTES: 1. . (A) Goods (excluding radioactive ores) answering to a description in heading 28.44 or 28.45 are to be classified in those headings and in no other heading of this Schedule. (B)....... 3. Goods put up in sets consisting of two or more separate constituents, some or all of which fall in this Section and are intended to be mixed together to obtain a product of Section VI or VII, are to be classified in the heading appropriate to that product, provided that the constituents are:........ Section Note 1 refers to included goods but also excluded goods and Note 3 refers to provisions and limitations