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Consequences of Tariff Re-Classification

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Imported goods are identified using Canada’s tariff classification system. Tariff classification is important for two reasons: (1) the duty rate depends on the tariff classification; and (2) tariff classification determines eligibility for preferential duty rates under Canada’s various preferential trade agreements (generally speaking, “Free Trade Agreements” or “FTAs” for short).

Importers can sometimes find themselves in the unfortunate position of facing an enormous increase in duties, or disqualification from preferential FTAs, due to a tariff classification dispute with the Canada Border Services Agency (“CBSA”). As seen in the decision in Canada v. Best Buy Canada Ltd., 2021 FCA 161, classification is not always obvious!


Canada’s tariff classification system is based on the World Customs Organization’s (“WCO”) harmonized system and consists of categories called “tariff items” – 10-digit codes that describe specific goods. Every good being imported must be classified under one “tariff item”.

A classic tariff classification problem can be seen in the Canadian International Trade Tribunal’s (“CITT”) 2019 decision in Anderson Watts Ltd., 2019 CanLII 110939. There the CITT was asked whether “Mr. Noodles Instant Noodles” was properly classified as pasta (1902.30.20 or 1902.30.31) or soup (2101.10.00). While this might sound like an odd question, it was an important one: there is a 2% difference in the duty rates between these two classifications (for import from most countries, if no FTA applies), and Anderson Watts imported a LOT of Mr. Noodles!

Best Buy Decision

A recent Federal Court of Appeal (“FCA”) decision in Canada v. Best Buy Canada Ltd., (2021 FCA 161, the “FCA Decision”, aff’ing 2019 CanLII 110846, the “CITT Decision”) illustrates just how particular tariff classification can be.

Best Buy classified their metal TV stands as “parts suitable for use solely or principally with” flat screen TVs (8529.90.90), but the CBSA disagreed, re-classifying them as “other metal furniture” (9403.20.00).   The CITT considered evidence such as testimony from an interior designer regarding the evolution and design of the TV stands, as well as the stands’ intended use (CITT Decision at para 20; FCA Decision at para 16). The CBSA relied on a WCO Classification Opinion describing the stands as “audio-visual carts designed to hold televisions and other audio-visual apparatuses”, i.e., “other” metal furniture. The CITT rejected the WCO Opinion as irrelevant because it considered wheeled stands for various A/V equipment, whereas the Best Buy Stands were “television-specific” and “non-wheeled” (FCA Decision at para 12).

The decision ultimately turned on the nature of the TV stands and on their intended use with flatscreen TVs (CITT Decision at para 23), with the CITT ruling in favour of Best Buy.


While tariff classification is of utmost importance to importers, CBSA re-classifications can be unpredictable, and very specific attributes of the goods can become central issues in litigation.

Importers unlucky enough to be facing a tariff classification dispute should seek professional guidance.

Do you require assistance in this area?  If so, please click here.

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