Teka triumphs in customs duty case

Teka won out over customs authorities who taxed them on the retail, rather than production, prices of its products

The Ho Chi Minh City Department of Customs has just released a decision to cancel its original decision on the taxable price of eleven Teka Vietnam imported products.

Teka is a multinational firm of German origin, engaged in manufacturing and marketing kitchen and bathroom appliances, porcelain products and industrial containers.

Following the case, the customs authority will keep the price declared by Teka Vietnam as the taxable price for eleven items, instead of the much higher price recalculated by the custom authority.

These products include sinks, induction cookers, electric roasters, dishwashers and fridges. The taxable price determined by the Vietnamese custom authority for them was from 30 to 100 per cent higher than Teka’s declared valuations.

In late December 2013, the Ho Chi Minh City Department of Customs decided to apply a taxable price for a cargo of kitchen and bathroom appliances imported from Spain by Teka Vietnam on November 15, 2013, making its assessment by comparing the same model in the customs authority’s data system.

However, Teka Vietnam disagreed with the valuation and petitioned to Ho Chi Minh City Department of Customs in mid-January 2014.

In a dialogue with Teka in early February, the customs authority agreed to cancel its determination of the taxable price for the eleven items.

In Decision 39/QD-GQKN dated March 7, 2014 sent to Teka Vietnam, Le Dinh Loi, deputy head of Ho Chi Minh Department of Customs said that Teka Vietnam was the distributor of Teka Group and was not allowed to directly sell products to consumers; therefore, wholesale prices were 30-35 per cent of the retail price published on its website or retailer listed prices.

Due to the specific quality of these products, the company had to bear many other costs such as warehousing, display, maintenance, engineering and after-sales service, said Loi.

Meanwhile, under Decision 39, many other products in its cargo imported in November 2013 would still receive a higher taxable price but information has yet to be released.

VIR’s attempts to contact Teka Vietnam have been fruitless.

Other foreign invested companies like Electrolux, Toyota, and Diageo are petitioning to Vietnamese customs authorities based on what they regard as inaccurate taxable prices on their imported products.

However, while Teka Vietnam was successful in maintaining its declared prices for eleven items, the other enterprises are still waiting for a final decision from the General Department of Customs for their issue.