TMI BlogSystem of classification of GoodsX X X X Extracts X X X X X X X X Extracts X X X X ..... rules of interpretation, form what is normally termed as the nomenclature of goods, in a country. Governments utilise the nomenclature as the basis for prescribing appropriate duty on goods imported / exported. The nomenclature combined with the duty rates is called the Tariff. As the tariff is normally a part of the Tariff Act in a country, it is called the 'Tariff Schedule'. 2. A good nomenclature of goods should ensure; (i) that every product manufactured or otherwise, will get covered under a code number uniformly applied the world over. (ii) that a set of rules is available for interpretation. (iii) that the nomenclature is accepted internationally as a technical and legal basis for improving trade relations amongst countr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty rates specified against each of them. The pattern of arrangement of goods in the Tariff is in the increasing degree of manufacture involved. The pattern of arrangement of goods is in the following sequence. Natural products, raw materials, semi finished goods and fully finished goods / article / machinery, etc. The legal text of the Tariff consists of Sections, Chapters, Headings, Subheadings, subheading notes and the General Interpretative Rules (GIR). The Indian Customs Tariff has 21 sections and 99 chapters. A Section is a grouping together of a number of Chapters which codify a particular class of goods. The Section notes explain the scope of chapters / headings, etc. The Chapters consist of chapter notes, brief description of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states that goods which cannot be classified by application of the preceding rules may be classified under the heading appropriate to the goods to which they are most akin. Rule 5 applies to packing materials / articles in which the goods are carried. Rule 6 provides the general guideline for classification of goods under the appropriate sub heading. 9. While classifying goods, the foremost consideration is the 'statutory definition'. In the absence of any statutory definition, and any guideline provided by HS explanatory notes, the cardinal principle would be the way goods are known in 'common parlance'. Many times statutes contain definitions and meanings of only a restricted number of words, expressions or phrases. While interpretin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on issued in terms of Customs Act provisions, are levied to the tariff rate of duty. In the export tariff schedule, only the commodities on which export tariff is levied are stated which does not involve the rigorous process of classification. In fact export duties are leviable only on listed 26 commodities but by exemption notifications, all but one set of item (i.e., leather items) are completely exempt from export duties. In the Central Excise Tariff, an Excise Duty is specified against each subheading. Goods which are prescribed 'nil' rates of duty in the Tariff are those goods which are levied to 'free' rates of duty. 12. In the Tariff Schedule, over the years, a systematic effort has been done to unify rates on similar products t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifying the classification codes under the Customs tariff, Central Excise tariff, ITC(HS) and the statistical schedule to evolve a Combined Nomenclature at the eight digit level to make it in tune with international statistical schedule. Once legislated, it will provide a base for collecting comprehensive trade data for statistical purposes. 16. The process of classification of goods is of paramount importance now, as both industrialised and developing countries use it as a tool for implementation of various trade policy instruments, international commercial arrangements, multilateral Tariff agreements. Further, as the variety of products traded internationally grows rapidly, it is all the more necessary that the nomenclature keeps up w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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