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Classification of Goods

The document discusses the classification of goods for import/export purposes. There are specific rules and procedures for determining the appropriate heading or sub-heading under which a product will be categorized. This includes classifying based on the essential character or nature of the goods. A harmonized system of nomenclature was created to standardize product codes internationally to reduce difficulties in trade caused by language changes over time. Classification is important because duties are assessed differently depending on the determined classification of the goods in question.

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94 views10 pages

Classification of Goods

The document discusses the classification of goods for import/export purposes. There are specific rules and procedures for determining the appropriate heading or sub-heading under which a product will be categorized. This includes classifying based on the essential character or nature of the goods. A harmonized system of nomenclature was created to standardize product codes internationally to reduce difficulties in trade caused by language changes over time. Classification is important because duties are assessed differently depending on the determined classification of the goods in question.

Uploaded by

rahulkoduvan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Classification of goods

Determination of heading or sub-


heading under which particular
products will be covered.
• Basic procedure
1. classification
2. Valuation
Classification :
The process of identifying where the goods
are listed is known as classification.
Need for classification

• Different goods are charged at different rates.


- Arrive at proper duty.
• Charged on advalorem and on tariff value.
• To identify whether goods are excisable or
not.
Harmonised system of Nomenclature

• Name changes as language changes – create


difficulties in the interstate and international
trade.
• Product coding system – General Agreement
on Tariff and Trade
Rules to classify the Goods
• Rule 1
No ambiguity in classification
• Rule 2 (a)
Incomplete / unfinished goods
 Manufacture is not fully over – incidental
processes to be completed.
 Functional aspects of goods- essential character.
 Physical aspects of goods
 Degree of completion
• Rule 2(b)
Goods made up of two or more materials or
substances.

If rule 2(b) is applied for any reason then


classification shall be under Rule 3.
• Rule 3
Goods mentioned under two or more headings
 specific description - football
Essential character – mobile with calculator, laptop
Latter the better -
Most akin goods – similar character
Packing materials-
Goods compared at the same level of sub-headings.
Valuation
Basis for levy of excise duty
 Specific duty
 Duty based on value
 Duty based on tariff value
 Duty based on maximum retail price
 Duty based on transaction value
Specific Duty
• Basis of levy is specific quantity
• No relevance to the selling price.
weight, length, volume, number of units
produced.
Advalorem value

• Basis of levy is the value of the goods.


• Assessable value : value on which the rate of
duty is applied .

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