New guidelines on customs duty, tax refund effective Oct 9

The Bureau of Customs (BOC) has released Customs Memorandum Order (CMO) No. 25-2020, which provides guidelines on refund of duties and taxes and tax credit.

CMO 25-2020 applies to the refund of overpayment or erroneous payment and other refund of duties and taxes to claimants as implemented under Customs Administrative Order (CAO) No. 04-2019 (guidelines on handling applications for duty drawback and refund for overpayment, abatement of duties and taxes).

It also applies to payment and refund arising from final decisions in protest cases, judicial decisions, special laws, and executive or presidential issuances, as well as to payment of refund claims approved and endorsed by BOC and the Bureau of Internal Revenue (BIR).

The order takes effect on October 9.

According to the book Understanding International Trade, Tariff & Customs by former BOC deputy commissioner and PortCalls columnist Atty. Agaton Teodoro Uvero, the Customs Modernization and Tariff Act’s (CMTA) Section 903 provides the rules on refund and is a new provision pursuant to the Revised Kyoto Convention.

Stakeholders may file claims for refund of duties and taxes on any of the following grounds:

  • When there is an error in the assessment or goods declaration
  • When BOC permits a change in customs procedure, in the instances of consumption to warehousing from one where duties and taxes are paid to another where no or less duties and taxes are required to be paid
  • Clerical errors on an invoice or entry, and errors in return of weight, measure and gauge
  • Errors in the distribution of charges on invoices not involving any question of law, which means only question of facts

No application for refund will be accepted for claims is less than P5,000. The finance secretary, in consultation with the customs commissioner, may adjust the minimum amount of refund, taking into consideration the consumer price index as published by the Philippine Statistics Authority.

Applications for refund must be filed within 12 months or 360 days from the date of payment of duties and taxes, and submitted to the Office of the District Collector (ODC) of the port where these were paid. Payment of processing fees will also be made at the same port.

Under CMO 25-2020, processing fees can range from P700 to P5,000 depending on the amount of claim. Other fees include documentary stamp, internal revenue stamp, and Tax Credit Certificate (TCC) fee.

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