4.1.3 Different classification of goods. In ASEAN, the harmonized system code is in
place. As the taxes are different, shippers tend to arbitrarily classify their goods so as to
pay minimum tax. For example, some customs classify toys as plastic goods while others
classify them as decoration items. This miscalculation is either due to the lack of
education among the customs authorities or due to logistics unfriendly practices. Also,
a transit delay occurs when the LSPs challenge the customs officials on the classification
codes. The logistics costs also increase because of detention, as the containers are
detained at the port thereby increasing port charges.