October 23, 2014
CUSTOMS ADMINISTRATIVE ORDER NO. 006-14
SUBJECT : Guidelines on the Imposition of Surcharge under Section
2503 of the Tariff and Customs Code, as Amended
1. Repealing Clause
Customs Administrative Order 01-2014, Sections 2-6 are repealed and
replaced by this Customs Administrative Order.
2. Amount of Surcharge
The Collector of Customs shall impose the surcharge in Section 2503 of
the TCCP in accordance with the following:
a. For Misclassification.
Where the percentage difference in misclassification. is ten per
cent (10%) or more the amount of surcharge shall be as
follows:
i. When the percentage difference is ten per cent (10%) or
more but not exceeding twenty per cent (20%), a one
time surcharge of the difference in customs duty shall
be imposed.
ii. When the percentage difference exceeds twenty per cent
(20%) a two times surcharge of the difference in
customs duty shall be imposed.
b. For Undervaluation, Misdeclaration in Weight, Measurement or
Quantity.
When the percentage difference in undervaluation/misdeclaration
in weight, measurement or quantity is ten per cent (10%) or
more, but not exceeding thirty per cent (30%), a surcharge
of two times of the difference in customs duty shall be
imposed.
An undervaluation, misdeclaration in weight, measurement or
quantity of more than thirty percent (30%) between the
value, weight, measurement or quantity declared in the
entry, and the actual value, weight, measurement or quantity
shall constitute a prima facie evidence of fraud penalized
through seizure proceedings under Section 2530 of the TCCP.
3. Determination of Percentage Difference in Undervaluation,
Misclassification and Misdeclaration SHECcT
For purposes of determining the amount of surcharge due to
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undervaluation, misclassification and misdeclaration, the computation of the
percentage difference shall be in accordance with following:
a. Undervaluation
The percentage difference in undervaluation shall be determined
using this formula:
duty using valuation as found - duty using valuation as declared
–––––––––––––––––––––––––––––––––––––––––––––––––––
duty using valuation as found
b. Misclassification
The percentage difference in misclassification shall be determined
using this formula:
duty using classification as found - duty using classification as declared
–––––––––––––––––––––––––––––––––––––––––––––––––––––––
duty using classification as found
c. Misdeclaration in weight, measurement or quantity
The percentage difference in misdeclaration shall be determined
using this formula:
duty using weight, measurement or quantity as found - duty using weight,
measurement or quantity as declared
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
duty using weight, measurement or quantity as found
4. Mandatory Imposition of Surcharge
Imposition of surcharge under Section 2503, TCCP is mandatory except
in following cases:
a. For Misclassification.
When the entered tariff classification is based on an advance tariff
classification ruling issued by the Tariff Commission pursuant
to its authority under Section 1313-a of the TCCP which had
not been reversed by the Secretary of Finance as of the time
of the entry of such tariff classification, but which is
subsequently reversed by the Secretary of Finance at any
time between the time the tariff classification was entered
but before final liquidation of the import. SEcTHA
b. For Errors, under certain circumstances
When the undervaluation, misclassification, and misdeclaration in
entry described under Section 2503 of the TCCP is:
i. Discovered before any payments are made on the entry;
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and
ii. The result of either of the following:
a. Manifest clerical error made in an invoice or entry
b. Error in return of weight, measure, or gauge, duly
certified to under penalties of falsification or
perjury by the surveyor or examining official
(when there are such officials at the port)
c. An error in the distribution of charges on invoices not
involving any question of law, certified to under
penalties of falsification or perjury by the surveyor
or examining official
5. Surcharges Not Subject to Compromise
The imposition of surcharge under Section 2503 of the TCCP, as
amended, may not be subject of compromise under Section 2316 of the
TCCP. Surcharge properly imposed cannot be waived. Good faith on the part
of the importer is not a valid defense.
6. Effectivity
This Order shall take effect immediately upon publication in a
newspaper of general circulation or Official Gazette and three (3) copies
deposited to the UP Law Center.
(SGD.) JOHN P. SEVILLA
Commissioner
Bureau of Customs
Approved by:
(SGD.) CESAR V. PURISIMA
Secretary of Finance
Department of Finance
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