Customs Clearance for Turmeric

Import Procedures and Customs Clearance for Turmeric by IPOLoistics

1. Introduction

Customs Clearance for Turmeric – Turmeric is one of the key agricultural products used extensively in the food, pharmaceutical, cosmetic, and functional food industries. Due to its high applicability and large demand in the market, importing turmeric requires a professional approach to optimize costs and ensure legal compliance. IPOLoistics, with its extensive experience in logistics, is committed to assisting clients with the import process of turmeric, from the initial steps to the final delivery of goods to the warehouse.

This article provides a detailed overview of the turmeric import process, from identifying the HS code, checking customs duties, to customs clearance procedures, along with key considerations to ensure successful import operations.

2. Determining the HS Code for Turmeric

HS Code is a critical factor in classifying goods, determining customs duties, and applying relevant regulations for imports. Turmeric is available in various forms, and each form has its own HS code:

Product Form	Description	HS Code
Fresh Turmeric (Roots)	Fresh, unprocessed turmeric roots	0910.11.00
Turmeric Powder	Dried and ground turmeric	0910.12.00
Turmeric Starch	Pure turmeric extract in powder form	1106.30.00

Key Points for Determining HS Code:

• Accurate product description: Incorrect HS Code classification can lead to incorrect duty application, fines, or delays in customs clearance.
• International HS Code lookup: IPOLoistics frequently cross-references HS codes through the World Customs Organization (WCO) and Vietnam’s General Department of Customs to ensure accuracy.

3. Import Duties and Associated Fees

3.1. Applicable Taxes

Importing turmeric is subject to the following taxes:

• Value Added Tax (VAT):
  • The VAT rate for turmeric is 5% (applies to fresh turmeric, turmeric powder, and turmeric starch).
• Import Duty:
  • The import duty rate for turmeric typically ranges from 0% – 10%, depending on the product type and country of origin.
  • Duty Preferences: If turmeric is imported from countries that have Free Trade Agreements (FTAs) with Vietnam, such as ASEAN, India, or the EU, the import duty may be reduced or completely exempted. For example:
    • Turmeric from ASEAN: 0% import duty under the ATIGA Agreement.
    • Turmeric from India: 0% import duty under the AIFTA Agreement.
• Environmental Tax (if applicable):
  • Turmeric is not subject to an environmental tax in Vietnam.

3.2. Formula for Calculating Import Taxes

The formula for calculating import duties and VAT is as follows:

1. Import Duty:$$\text{Import Duty}=\text{CIF Value}\times \text{Import Duty Rate}$$
2. VAT:$$\text{VAT}=(\text{CIF Value}+\text{Import Duty})\times \text{5\%}$$

Where:

• CIF = Cost, Insurance, and Freight value at the Vietnamese port (includes FOB price + shipping cost + insurance).

Example: If a shipment of turmeric from India has a CIF value of 10,000 USD and is exempt from import duties:

• Import Duty = 10,000 USD × 0% = 0 USD.
• VAT = (10,000 USD + 0 USD) × 5% = 500 USD.
• Total taxes payable: 500 USD.

4. Import Process for Turmeric

4.1. Preparing Import Documentation

Complete and accurate documentation is essential for ensuring smooth customs clearance. The required documents include:

1. Commercial Invoice: Indicates the value of goods and terms of sale.
2. Sales Contract: Contract between the importer and the overseas supplier.
3. Packing List: Details of the quantity, weight, and packaging of goods.
4. Certificate of Origin (C/O): Required to benefit from duty preferences under FTAs.
5. Phytosanitary Certificate:
   • Required for fresh turmeric to ensure it is pest-free.
   • Not required for turmeric powder or turmeric starch.
6. Certificate of Analysis (COA): For turmeric used in pharmaceuticals or cosmetics.
7. Customs Declaration: Submitted via the VNACCS/VCIS system.

4.2. Customs Procedures

Step 1: Registering for Specialized Inspection (if needed)

• Fresh turmeric: Register for phytosanitary inspection with the Plant Protection Department.
• Turmeric powder or turmeric starch: Check for food safety compliance (if used as a food ingredient).

Step 2: Electronic Customs Declaration

• IPOLoistics utilizes the VNACCS system to submit customs declarations:
  • HS Code.
  • CIF value.
  • Details of quantity, weight, packaging.
• The system will classify the declaration:
  • Green channel: Automated clearance.
  • Yellow channel: Document inspection.
  • Red channel: Inspection of both documents and goods.

Step 3: Payment of Customs Duties and Fees

• After clearance, IPOLoistics proceeds with paying the import duties and taxes through the bank or at the customs office.

Step 4: Receiving and Transporting Goods

• Once cleared, turmeric is released from the port and transported to the warehouse.

5. Key Considerations in Customs Clearance for Turmeric

1. Product Standards:
   • Ensure that fresh turmeric meets pest-free standards.
   • Check for chemical residues or harmful additives in turmeric powder or starch.
2. Monitoring Tax Policies:
   • Regularly update on tax policies and duty preferences based on international trade agreements.
3. Quality Control at Source:
   • Work with reputable suppliers to ensure the product meets export and import standards.
4. Managing Time and Costs:
   • Account for the time required for specialized inspections to avoid extra storage fees.

6. Role of IPOLoistics in Turmeric Importation

IPOLoistics provides comprehensive solutions for turmeric importers:

• Legal Consultancy: Assisting in HS Code lookup, tax calculation, and identifying specialized inspection requirements.
• Customs Declaration: Ensuring accurate and timely submission of all customs documentation.
• International Transport Management: Optimizing shipping costs and insuring goods.
• Handling Specialized Inspections: Representing clients in dealing with inspection agencies and relevant authorities.

Conclusion

Importing turmeric requires thorough understanding of legal regulations, tax policies, and a professional approach to ensure compliance with both national and international standards. IPOLoistics is committed to guiding businesses through each step of the importation process, from documentation to final delivery, ensuring a smooth and efficient operation. With the support of IPOLoistics, businesses can confidently grow their turmeric import operations while minimizing risks and costs.