Adoption of 8 Digit Customs Code-Reg. - Customs - 14/2003

OFFICE OF THE COMMISSIONER OF CUSTOMS C.R BUILDINGS, P.O BAG NO. 5400 QUEENS ROAD, BANGALORE - 560001 Public Notice No. 14/2003 Dated. 23-01-2003 Sub:- Adoption of 8 Digit Customs Code - Reg. All Importers, Exporters, Custom House Agents and members of Trade in general, officers of the Department and all others concerned are hereby informed that a new 8 digit classification code has been adopted for levy of Customs duty with effect from 1st February, 2003. At present, different Government Agencies adopt different commodity classification codes for the purpose of classification of commodities, for tax purposes, deciding the importability of a product, compilation of trade statistics and various other trade related transactions. This causes disputes and hardships to the trade and industry apart from making it difficult to collect, compare and analyse trade statistics. There has also been a demand from the trade and industry to adopt a common classification code to be used for all trade related transactions based on internationally adopted Harmonised System of Nomenclature (HSN) to facilitate international and domestic trade. As part of the harmonization effort for levy of Customs duties, the President of India has given assent to promulgation of Customs Tariff (Amendment) Ordinance, 2003 (1 of 2003) on 20th January, 2003. The Ordinance proposes to substitute 8 digit customs classification code in place of the present 6 digit classification code with effect from 1st February, 2003. The proposed code is entirely based on 6 digit HSN based code. Taking into account commodities which are of special significance to the country's needs, 6 digit entries are further split up into 8 digit entries wherever required. There is no change in the scope of headings (4 digit) and sub-headings (6 digit). Section Notes and Chapter Notes are retained as it is without any change. However, supplementary notes are added to explain the scope of entries created at the 8 digit level. The proposed classification code pertains to only classification of commodities and does not seek to effect changes either in the rates of customs duty or the importability of commodities. The 8 digit code will be adopted by both DGFT and DGCIS as the code is common for Customs, DGFT and DGCIS. The switchover to the new Code is part of ongoing efforts by the Government to simplify import procedures and documentation by adopting a common classification code for all trade-related transactions. This would remove obstacles in international trade arising due to divergence of classifications by different agencies and thereby reduce transaction cost. The code has been prepared in consultation with trade and industry, various Ministries in the Government of India and customs field formations. The common classification will ensure smoother clearances of imported goods and help in getting more specific data on commodities of special significance to India and sharing of those data among various agencies. This is necessary for computerization of tax administration and electronic data sharing. At present, importers are declaring the quantity of goods imported in various units of measurement. This creates difficulties in compilation and exchange of trade statistics. To obviate this difficulty, standard units of measurement have been prescribed, on the basis of the international trade practices, to facilitate collection, compilation, analysis and sharing of trade statistics. However, this provision will come into force from a later date to be notified after giving sufficient time to trade and industry to familiarize themselves with the new 8 digit code. The Ordinance and the new code can be accessed at CBEC's website at www.cbec.gov.in A few examples illustrating the splitting up of 6 digit code to 8 digit code are annexed. An orientation course on the new 8 digit Customs classification code for the Custom House Agents (CHAs) and other interested parties will be held at Air Cargo Complex, Bangalore on the 29th and 30th January, 2003 at 11 a.m. All those interested are requested to participate in the orientation course and familiarize themselves with the new 8 digit classification code. For clarification of doubts/difficulties, if any, the following officers may be contacted:- (1) Mr. P. Devraj, Asst. Commissioner of Customs, Air Cargo Complex, Bangalore. Tel: 5227426. (2) Mr. Deepak K. Gupta, Deputy Commissioner of Customs Inland Container Depot, Bangalore. Tel: 8453064. Sd/- (P.R. CHANDRASEKHARAN) COMMISSIONER OF CUSTOMS BANGALORE