The President has promulgated an
Ordinance amending the Customs Tariff Act, 1975 with prospective
effect from February 1, 2003 to enable the trade, commerce and
industry to ready themselves to the emerging new commodity classification
code. The Act was last amended in 1985.
Numbered as
Ordinance No. 1 of the year 2003, it seeks to amend the Customs
Tariff Act, 1975 to adopt a common commodity classification to
be used by Customs, Directorate General Foreign Trade and Directorate
General Central Intelligence and Services. The Code has been prepared
in consultation with the Ministry of Commerce, trade, industry
and other users as part of Government’s ongoing efforts for simplification
of procedures to facilitate imports.
The Code is based
on internationally adopted six digit harmonized system of nomenclature
evolved by World Customs Organization and individual countries
to expand and to accommodate domestic needs and concerns. The
present Code of six digit which has about 6000 items has been
expanded into eight digits with an additional about 10,000 more
items with a provision to add more such items in future as well.
The Ordinance
seeks to integrate Indian economy with the global economy to evolve
procedures adopting global needs. This will also avoid disputes
relating to classification arising out of multiplication of classification
code adopted by different agencies thereby reducing transaction
costs thus improving competence of Indian industry to facilitate
collection, compilation, analysis and exchange of trade statistics
and standard units of measurements based on international trade
practices incorporated against commodities.
No change in
the rates of duties has been provided.
The Ordinance
follows the long felt demands of All Industries Associations and
Export Promotions Board for a common Code. This also follows the
recommendations of Kelkar Committee so that a Code is in position
ahead of schedule.
The expanded
Code takes into account specific needs of the country and will
be helpful in international trade negotiations.
