Scope, coverage, and tariff collection
- Section 2 requires customs duties to be collected on all articles, goods, and merchandise imported into the Philippine Islands at the rates in the tariff, except when expressly exempted by the act.
- Section 4 requires duties to be collected on articles, goods, and merchandise exported from the Philippine Islands at the rates specifically prescribed in the act.
- Section 10 allows importations from the United States to be dutiable under the act, while Section 10 bars customs duties on articles transported only from one place or port to another place or port within the Philippine Islands.
- Section 5 commands that the rules and regulations stated in the act must be observed in the construction and enforcement of its tariff provisions.
Core customs rules for textiles
- Rule 1 (Section 5) defines how to ascertain thread count in textiles: thread totals refer to all threads comprised in the warp and weft in a square of six millimeters.
- Rule 1 establishes counting method: the warp is all longitudinal threads whether foundational or added for patterns/body, and the weft is all threads crossing the warp forming patterns/body.
- Rule 1 requires use of a “thread counter” to determine thread count for customs treatment.
- Rule 1 provides an averaging method if thread density varies across the textile: duty is based on the average between the most closely woven part and the most loosely woven part.
- Rule 1 instructs that when permitted by the textile’s nature, threads must be counted on the obverse side, and for woolly/melton-like or indistinct-thread textiles, threads must be counted on the reverse side by rasping or burning hair when necessary.
- Rule 1 establishes a fallback rule if counting remains doubtful: the textile is subject to the highest duty of its belonging group; if mixed, it is dutiable by the class where the most highly taxed material in the mixture is comprised.
- Rule 2 (Section 5) requires dutiability rules for cotton textiles composed of two materials based on thread-type combinations and a strict one-fifth thread threshold:
- If hemp/jute/linen/ramie/other vegetable fibers do not exceed one-fifth, textiles follow Group Three, Class Four with surtaxes; if they exceed one-fifth, textiles follow Group Five, Class Five.
- If wool/flock wool/hair/wastes do not exceed one-fifth, textiles follow Group Three, Class Four with surtaxes; if they exceed one-fifth, textiles follow Class Six as textiles mixed with wool.
- If silk/floss silk do not exceed one-fifth, textiles follow Group Three, Class Four with surtaxes; if they exceed one-fifth, textiles follow Class Seven.
- Rule 3 (Section 5) provides multi-material rules for textiles composed of more than two materials, including:
- Wool + cotton/vegetable fibers + silk/floss silk: subject to Class Six as mixed woolen textiles and additionally liable to a silk/floss silk surtax, subject to the one-fifth threshold; if silk/floss silk threads exceed one-fifth, duty shifts to Class Seven.
- Cotton + vegetable fibers + silk/floss silk: subject to Class Five (as textiles assimilated to jute/hemp/etc.) plus a silk/floss silk surtax under the one-fifth threshold; if silk/floss silk threads exceed one-fifth, duty shifts to Class Seven.
- Wool + cotton + vegetable fibers without silk: subject to Class Five plus a woolen surtax under the one-fifth threshold; if wool threads exceed one-fifth, duty shifts to Class Six.
- Rule 4 (Section 5) sets the silk textile standard:
- Any textile whose silk/floss silk thread count exceeds one-fifth of the total thread count is a textile of silk.
- If silk/floss silk threads exceed one-half of the total, the textile is considered and dutiable as pure silk.
Textile exceptions and related surtaxes
- Rule 5 (Section 5) mandates special classification for knitted stuffs, tulles, laces, blondes, and ribbons in certain mixtures:
- Knitted stuffs, tulles, laces, blondes when mixed are dutiable according to the class comprising the threads of the material most highly taxed, whatever the proportion.
- Knitted stuffs, laces, blondes, and tulles in Class Seven are considered textiles mixed with silk when they contain cotton/vegetable fillers or wool/flock wool, whatever the mixture proportion.
- Rule 6 (Section 5) mandates ribbon classification:
- Ribbons and galloons mixed with cotton/vegetable fibers or with vegetable fibers and wool, containing no silk, are dutiable as the class comprising the threads most highly taxed.
- Ribbons and galloons containing silk in any proportion are dutiable according to Class Seven.
- Rule 7 (Section 5) governs trimmings:
- Trimmings are dutiable on their total weight as if exclusively composed of the apparent or visible textile material.
- Trimmings whose visible parts consist of various textile materials are dutiable under the class comprising the most highly taxed material.
- Trimmings with predominating metallic threads of any kind are dutiable according to Class Seven.
- Trimmings are distinguished from ribbons and galloons by the fact that trimmings are plaited, while ribbons and galloons are real textiles with warp and weft.
- Rule 8 (Section 5) requires surtaxes for specific textile operations:
- Surtaxes applicable due to broche, embroidery, metal threads, or making up are computed by applying them to the duties leviable on the textile, accounting for admixture where necessary.
- Total duty is collected by adding surtaxes together when needed.
- Rules 9 to 12 (Section 5) impose surtaxes for particular features:
- Rule 9: Textiles, broches, or woven-like brocades with silk/floss silk pay duty leviable thereon plus the applicable surtaxes; it defines brocades/broches as textiles where flowers/ornaments are applied so threads do not occupy the entire width.
- Rule 10: Textiles embroidered by hand or machine after weaving or with application of trimmings pay duty plus surtaxes; it distinguishes embroidery from patterns woven-in by noting embroidery is independent of warp and weft and cannot be unraveled.
- Rule 11: Textiles and trimmings containing metallic threads in any proportion pay duty plus surtaxes; textiles exclusively made of metallic threads are dutiable as Class Seven.
- Rule 12: Textiles manufactured into articles pay duty plus surtaxes; ready-made clothing and wearing apparel are assessed on total weight under duty for the principal component textile on their most visible exterior part; half-finished, cut, or basted clothing is treated as made-up articles.
Classification rules for other goods
- Rule 13 (Section 5) directs classification for articles not enumerated in the tariff:
- Unlisted articles are assimilated to those they most closely resemble in material, quality, texture, or use.
- The collector of the port of entry initially classifies the unlisted article.
- When appraisal doubts arise, the interested party may request the collector to indicate the tariff number; the appraisal is then made based on the number indicated.
- Rule 14 (Section 5) requires classification for composite goods by the material chiefly determining value:
- When goods consist of two or more materials or parts (e.g., implement handle and implement; mirror glass and frame), the total weight is taxed according to the material chiefly determining the value.
- Rule 15 (Section 5) provides detailed rules for unenumerated articles and “component material of chief value”:
- If an unenumerated article similar to an enumerated article has one best match, it pays the same duty rate as that enumerated article it most resembles.
- If it equally resembles two or more enumerated articles with different rates, it pays the highest rate.
- For composite unenumerated articles made of two or more materials, duty is assessed at the highest rate applicable if the article were wholly composed of the component material of chief value.
- “Component material of chief value” means the component material whose value exceeds any other single component material.
- The value of each component material is determined by its ascertained value in the condition found in the article.
- If multiple duty rates could apply, the article pays the highest rate.
Packing, weight basis, and tariff computation
- Rule 16 (Section 5) governs duties on packing, packages, and receptacles:
- Exterior common packing and coverings in use and imported with merchandise are dutiable under their corresponding tariff paragraphs except where goods are assessed by gross weight or ad valorem.
- Packages/receptacles assessed at a higher rate than contents are assessed under their own paragraphs, but usual and regular receptacles in current form for bona fide transportation are dutiable together with the goods if the goods are dutiable by gross weight or ad valorem.
- Rule 17 (Section 5) states the gross-weight rule:
- Where goods are dutiable upon gross weight, dutiable weight includes all covers, receptacles, wrappers, packages, and packing of every description (exterior, interior, immediate) without allowance for tare.
- Rule 18 (Section 5) states the net-weight rule:
- Where goods are dutiable upon net weight, dutiable weight excludes exterior covers/receptacles/packages/wrappers/packing, but includes all interior or immediate receptacles.
- Rule 19 (Section 5) addresses mixed tariff bases in one receptacle:
- Goods dutiable on net weight are assessed by net weight under Rule 18, and goods dutiable on gross weight are assessed together with the weight of the entire exterior receptacle.
- When goods dutiable by gross weight include more than one gross-weight class, the exterior receptacle weight is apportioned proportionately based on the respective net weights.
- Goods dutiable by net weight packed with goods dutiable by “unities” are assessed under their respective rules; the exterior receptacle is dutiable by its corresponding paragraph.
- For this rule, goods dutiable ad valorem and free-of-duty goods are treated and appraised as by net weight.
- Rule 20 (Section 5) authorizes estimation for customary packings:
- Where net-weight dutiable merchandise is customarily contained in uniform or similar packing/packages/receptacles, the collector shall ascertain by tests the actual weight/quantity of the merchandise and the actual weight of packing/receptacles, then prescribe regulations for estimating dutiable weight/quantity.
- Thereafter, imports in such customary packings are entered and duties collected on the basis of the estimated dutiable weight/quantity.
Prohibited imports
- Section 6 prohibits importation of:
- Dynamite, gunpowder, and similar explosives, and firearms of all descriptions and detached parts, unless the importer produces a special authorization for landing issued to him by the Civil Governor.
- Books, pamphlets, or other printed matter, paintings or illustrations, figures, or other objects of an obscene or indecent character.
- Roulette wheels, gambling layouts, dealing boxes, and all other machines/apparatus/mechanical devices used in gambling, or used in the distribution of money/cigars/other articles when distribution depends on lot or chance.
Measurement units, payment currency, and United States imports
- Section 7 defines tariff abbreviations:
- G. W. = gross weight; Kilo. / Kilos = kilogram(s); N. W. = net weight; Hectog. / Hectol. = hectogram/hectoliter.
- Section 8 requires duties be paid in United States money, subject to coin-receipt rules:
- Peso = 50 cents; media peso = 25 cents; peseta = 10 cents; media peseta = 5 cents.
- These rates change by quarterly proclamation of the Civil Governor.
- Section 9 continues the metrical system as used in the Philippine Islands:
- The meter equals 39.37 inches; the liter equals 1.0507 quarts, wine measure; the kilogram equals 2.2040 pounds avoirdupois.
- Section 10 dutiability rule for United States imports:
- Articles transported only within the Philippine Islands from one place/port to another are not subject to customs duties.
Export and import duties schedule
- Section 11 sets the operative duty schedule for imports by Classes, including the following portions:
- CLASS ONE for stones, earths, ores, glass, and ceramic products, with specific group provisions including building and industrial materials, coal, schists/bitumens derivatives, ores, crystal/glass, pottery/porcelain, and precious stones/pearls/imitations.
- CLASS TWO for metals and manufactures where a metal enters as a principal element, including groups for gold/silver/platinum/alloys, cast iron, wrought iron and steel, copper and alloys, and other metals and alloys, with specific numeric duties for listed sub-items.
- CLASS THREE for substances used in pharmacy and chemical industries and products composed of these substances, including groups for simple drugs, colors/dyes/varieties, chemical and pharmaceutical products, and oils/fats/wax/derivatives, plus listed rates for fertilizers, starch/feculae, dextrine, glues/albumens/gelatin, carbons for electric lighting, and gunpowder/explosive compounds.
- CLASS FOUR for cotton and its manufactures, including groups for raw cotton and cotton waste, yarn measurement/numbering rules, and textiles with thread-count-based duties and related surtaxes.
- The act provides detailed duties by listed paragraphs, including unit basis rules such as G. W. 100 kilos, N. W. 100 kilos, per dozen, per hundred, per kilogram, and ad valorem rates where expressly stated.
- The act includes specific minimum ad valorem duty floors in the textile and glass/pottery sections, such as 30% ad valorem and 20% ad valorem for specified glass categories, and 15% ad valorem or 25% ad valorem minimums for specified metal/waste or other categories where the provisos apply.
Textiles surtaxes within cotton textiles class
- Cotton textile surtaxes apply through Textiles group rules tied to thread composition and the referenced textile rules on admixtures.
- Cotton textiles containing hemp/jute/linen/ramie/pita threads pay a surtax of 15% of the duties applicable thereto when such threads do not exceed one-fifth of total threads; when they exceed one-fifth, textiles follow corresponding duties of Class Five.
- Cotton textiles containing wool/flock wool/hair/wastes pay a surtax of 35% when wool-type threads do not exceed one-fifth; when they exceed one-fifth, textiles follow corresponding duties of Class Six as textiles mixed with wool.
- Cotton textiles containing silk/floss silk pay a surtax of 70% when silk/floss silk threads do not exceed one-fifth; when they exceed one-fifth, textiles follow corresponding duties of Class Seven.
- The cotton textile surtax provisions do not apply to knitted stuffs, tulles, laces, and blondes; or to ribbons; or to trimmings; the act then separately imposes surtaxes for embroidery and metallic-thread/purl/gold variants under the applicable textile rules.
- Textiles, broches, or woven-like brocades with silk/floss silk pay the duty leviable thereon plus 15%; embroidered textiles pay duty plus 30%, with increased surtaxes where embroidery contains common metal/silver (60%) or gold (100%).
- Textiles and trimmings containing common metal or silver threads/purl pay a surtax of 50%, and gold threads/purl pay 100%.
- Made-up sacks pay duty plus 15%; listed shawls/rugs/linens for making up pay a surtax of 30% of the duties leviable thereon; other made-up wearing apparel and clothing pay duty on the principal component textile on the most visible exterior part plus a surtax of 100% (with the act’s specific stated exceptions within the cotton textile group).
- Thread-count classification for textiles plain and without figures is established by specific thread thresholds and duty rates by measured width/weight conditions, including categories for up to 38 threads, from 19 to 30 threads, from 31 to 38 threads, and 39 threads or more, with higher rates when printed or manufactured with dyed yarns (including 30% or 40% surtaxes depending on the category stated).
Transit entry and preservation of prior law
- Section 3 allows merchandise in transit at the time the revised tariff goes into effect to be entered under the provisions of law existing at the time of shipment.
- Section 3 restricts that privilege to no more than sixty days after the enforcement of the present tariff of duties and taxes.