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Import (Customs) Duty: Definition, How It Works, and Who

Pays It

Import duty is a tax collected on imports and some exports by a country's customs
authorities. A good's value will usually dictate the import duty.

Import (Customs) Duty: Definition, How It

Works, and Who Pays It
What Is Import Duty?
Import duty is a tax collected on imports and some exports by a country's
customs authorities. A good's value will usually dictate the import duty.
Depending on the context, import duty may also be known as a customs
duty, tariff, import tax, or import tariff.

KEY TAKEAWAYS

 Import duty is also known as customs duty, tariff, import tax,

or import tariff.
 Import duty is levied when imported goods first enter the country.
 Around the world, several organizations and treaties have a direct
impact on import duties.
 Import duties are typically calculated based on the value of the
imported goods, which may include the cost of the goods, shipping,
and insurance.
Understanding Import Duties
Import duties have two distinct purposes: raise income for the local
government and give a market advantage to locally grown or produced
goods that are not subject to import duties. A third related goal is
sometimes to penalize a particular nation by charging high import duties
on its products.

In the United States, Congress established import duties. The Harmonized

Tariff Schedule (HTS) lists the rates for imports and is published by the
International Trade Commission (USITC). 1 Different rates are applied
depending on the countries' trade relations status with the United States.
The general rate applies to countries that have normal trade relations with
the United States. The special rate is for countries that are not developed
or are eligible for an international trade program. 2

International Organizations
Around the world, several organizations and treaties have a direct
impact on import duties. Numerous countries have tried to reduce duties to
promote free trade. The World Trade Organization (WTO) promotes and
enforces commitments that its member nations have made to cut tariffs.
Countries make these commitments during complex rounds of
negotiations.3

Another example of an international effort to reduce tariffs was the North

American Free Trade Agreement (NAFTA) between Canada, the United
States, and Mexico. NAFTA eliminated tariffs, except those on certain
agriculture, between the three North American nations. 4
Congressional Research Service. "Agricultural Provisions of the U.S.-Mexico-Canada
Agreement ." Page i, 1.
In 2018, the U.S., Canada, and Mexico signed a new deal to replace
NAFTA called the USMCA, and the new USMCA went into force on July 1,
2020.5

Import Duty Documentation

To pay import duties, you will need several documents. The commercial
invoice is a key document as it details the transaction between the buyer
and seller. This will include the value of the goods, the terms of sale, and
other relevant information. The invoice helps customs authorities
determine the correct duty amount based on the declared value of the
items.

Another document is the bill of lading or the airway bill which serve as a
receipt for the shipment. The bill of lading is used for sea shipments, while
the airway bill is used for air shipments. These documents include details
like the consignor, consignee, description of the goods, and shipping route.
Customs authorities rely on this information to verify the shipment's
legitimacy and ensure that all goods are accounted for and appropriately
taxed.
The packing list is also used for paying import duties. The list provides a
detailed breakdown of the quantity, weight, and dimensions of the goods.
This helps customs officials cross-check the physical shipment with the
declared items on the commercial invoice and bill of lading.

There could also be additional documents that may be required including

the certificate of origin and any necessary permits or licenses. The
certificate of origin verifies the country where the goods were
manufactured. Permits and licenses may be needed for certain restricted
or regulated goods.

Calculating Import Duties

Import duties are calculated based on the value of the goods being
imported. This includes the cost of the goods, shipping, and insurance.
These items provide a comprehensive value of the total cost involved in
bringing the goods to the importer's country. The specific rate of duty
applied to an imported product is determined by its classification under the
Harmonized System (HS) code. 6
International Trade Administration. "Understanding HS Codes and the Schedule B ."
Other factors that can influence the import duty rate include the country of
origin and any existing trade agreements between the importing and
exporting countries. As we'll look at next, certain agreements between two
countries could reduce or even eliminate the import duty.
As an example, suppose a company in the United States imports
electronics from China. The value of the shipment including the cost of the
electronics, shipping, and insurance is $50,000. According to the U.S. tariff
schedule, the duty rate for this category is 5%. Therefore, the import duty
is calculated as 5% of $50,000, resulting in a duty of $2,500. If the same
goods were imported from a country with which the U.S. has an
exemption, the duty rate might be lower or even zero.
FAST FACT
Import duties vary by country and product, and countries may choose to
set import duties to achieve a specific political agenda.
Import Duty Exemptions
Many countries provide exemptions or reductions on import duties. One of
the primary ways countries reduce or eliminate import duties is through
free trade agreements (FTAs). FTAs are treaties between two or more
countries that aim to reduce trade barriers to facilitate easier and more
cost-effective exchange of goods and services. For example, the NAFTA
between the United States, Canada, and Mexico allows for many products
to be traded duty-free among the member countries.
Another common form of duty reduction is the use of duty-free quotas.
These quotas allow a certain quantity of specified goods to be imported
without paying duties. Once the quota is met, any additional imports of
those goods are subject to the standard duty rates. This system helps
balance the need to protect domestic industries with the benefits of lower-
cost imports.
Temporary importation is another scenario where there may be duty
exemptions. Goods imported temporarily for repair, exhibition, or other
specific purposes may be exempt from duties, provided they are re-
exported within a set timeframe.

Import Duty vs. Export Duty

The economic impacts of import and export duties differ significantly,
shaping the domestic economy and international trade in various ways.

Import duties increase the cost of foreign goods in the domestic market,
thereby making locally produced goods more competitive. Export duties
directly affect the profitability of exporting goods by making them more
expensive for foreign buyers. This can lead to a reduction in export
volumes as exporters may find it less attractive to sell their goods abroad.

From a trade policy perspective, import duties are often used strategically
to protect nascent or strategic industries that are deemed important for
national development or security. By shielding these industries from
foreign competition, governments aim to nurture them until they become
competitive on a global scale. This approach can lead to a more diversified
economy and reduce dependency on foreign goods.
Export duties are employed to manage the outflow of critical resources and
ensure that domestic industries have sufficient access to essential raw
materials and commodities. For example, a country with significant mineral
resources might impose export duties to keep these resources available
for local manufacturers, therefore supporting the development of higher
value-added industries.
To summarize, import duties increase the cost of foreign goods to protect
domestic industries and generate revenue, but they can lead to higher
consumer prices and production costs. Export duties to control resource
outflows and stabilize domestic prices by making exports more expensive,
fostering local value addition and economic development.
Real-World Example
As mentioned earlier, the Harmonized System (HS) code helps determine
the applicable tariff and tax rates for a specific foreign country. To find your
HS code, you can use the US Census Bureau’s Schedule B Search
Engine, which helps you obtain a complete 10-digit Schedule B number for
your exports. The first six digits of this number will be the HS code. The
Schedule B website also offers an instructional video to help classify
products.7

When shipping to U.S. territories like Guam, Puerto Rico, and the U.S.
Virgin Islands (USVI), different regulations apply:

 In Guam, there are no duties or quotas, but there are fees such as a
$5.00 processing fee, a business license requirement, a 4% gross
receipt tax, and a 4% use tax on imported items.
 For Puerto Rico, shipments are not considered exports and are thus
duty-free, but they are subject to a state sales tax of 10.5% and
possibly a county sales tax.
 The USVI exempts U.S.-origin items from duties but imposes an
excise tax ranging from 0 to 4%, with higher rates for certain items
like cigarettes and alcohol. For more details on excise taxes, the
USVI excise tax office can be contacted. 8

Specific Import Tariff Product Example (Alcohol)

Let's look at another example, but this one is specific to a type of product.
This example pertains specifically to a customs duty for importing alcohol
into the United States.

If you're a returning resident at least 21 years old, you can bring back one
liter of alcohol duty-free as part of your personal exemption. This alcohol
must be for your personal use, not for sale, and must comply with the laws
of the state where you arrive. Federal rules allow you to bring one liter
without paying duty, but some states may let you bring more, though you’ll
have to pay any applicable customs duties and taxes. 9

While there's no federal limit on how much alcohol you can bring back
beyond the duty-free amount, large quantities might make customs and
border patrol officers think you’re importing it for resale. If that happens,
you might need a permit and have to file paperwork to import the alcohol.
Also, state laws might limit how much alcohol you can bring in without a
license.

For alcohol and cigarettes, the duty-free amounts can be part of an $800
or $1,600 personal exemption. Unlike other items, any amount over the
duty-free limit will be taxed, even if you haven’t reached your exemption
limit. For example, if your exemption is $800 and you bring back three
liters of wine, only one liter will be duty-free, and the other two will be
taxed.9

What Are Import Duties?

Import duties are taxes imposed by a government on goods imported into
a country. These duties are designed to protect domestic industries from
foreign competition, generate revenue for the government, and sometimes
control the flow of specific goods.

How Are Import Duties Calculated?

Import duties are usually calculated based on the value of the goods being
imported, which can include the cost of the goods, shipping, and insurance
(often referred to as the CIF value). The specific rate applied depends on
the product classification under the Harmonized System (HS) code and the
country's tariff schedule.

What Is fhe Difference Between Import Duties and

Taxes?
Import duties are specific taxes levied on goods as they enter a country,
whereas taxes can include a broader range of charges such as value-
added tax (VAT), sales tax, and excise duties

Who Is Responsible for Paying Import Duties?

The responsibility for paying import duties usually falls on the importer of
record, which could be an individual or a business entity. This is often
specified in the sales agreement under terms like Delivered Duty Paid
(DDP) or Delivered Duty Unpaid (DDU).

The Bottom Line

Import duties are taxes levied by governments on goods brought into a
country to protect local industries, raise revenue, and control trade. These
duties are determined based on the value and classification of the goods,
with rates and regulations differing significantly by country and product
type.

ARTICLE SOURCES

Investopedia requires writers to use primary sources to support their work.

These include white papers, government data, original reporting, and
interviews with industry experts. We also reference original research from
other reputable publishers where appropriate. You can learn more about
the standards we follow in producing accurate, unbiased content in
our editorial policy.
1. U.S. International Trade Commission. "Harmonized Tariff Schedule ."

2. U.S. International Trade Commission. "About Harmonized Tariff

Schedule."

3. World Trade Organization. "WTO in Brief."

4. Congressional Research Service. "Agricultural Provisions of the

U.S.-Mexico-Canada Agreement ." Page i, 1.

5. Office of the United States Trade Representative. "United States-

Mexico-Canada Agreement."

6. International Trade Administration. "Understanding HS Codes and

the Schedule B."

7. International Trade Administration. "Import Tariffs & Fees Overview

and Resources."

8. International Trade Administration. "Import Tariffs Overview and

Resources."

9. United States Customs and Border Protection. "Customs Duty

Information."
Customs Tariff Act and HSN Classification – Rules
and Structure
The Customs Tariff Act, 1975 is a key legislation in India that governs
the imposition of customs duties on goods imported into or exported
from the country. It provides a comprehensive classification system for
goods based on the internationally recognized Harmonized System of
Nomenclature (HSN), dividing them into 98 chapters and assigning
specific 8-digit tariff codes. The Act comprises two schedules—Schedule
I specifies the rates of import duties, while Schedule II outlines
export duties on select items. Accurate classification of goods under
the appropriate heading is essential to determine the applicable rate
of duty.
Table of Contents

1. Customs Tariff Act (CTA)

2. Overview of Customs Tariff
3. Rules for Interpretation of Tariff
4. Application of GIR in Tariff

1. Customs Tariff Act (CTA)

Once the liability of payment of customs duty is established, the next question is
what is the amount of duty payable. The two step process is
(a) Correctly classify the goods, to find out rate of customs duty
(b) Find its assessable value to which the rate of duty is to be applied for
calculating amount of duty payable.
The rate of duty is found out by classifying the product in its appropriate heading
under Customs Tariff.
The Customs Tariff Act classifies all the goods under 97 chapters and specific code
is assigned to each item. There are over 1,000 tariff headings and 2,000 sub-
headings. This classification forms basis for classifying the goods under particular
Chapter head and Sub-head to prescribe customs duty to be charged on that
particular product.

Classification of a product is to be done by consignor only – Classification of a

product is to be done by consignor only. Classification cannot be changed or
questioned at consignee’s end – Steel Authority of India Ltd. v. CCE (2022) 382 ELT
10 (SC).

Classification is responsibility of supplier, purchaser is not obliged to

indicate classification – Classification is the responsibility of supplier, purchaser
is not obliged to indicate classification of goods he is purchasing – UOI v. Bharat
Forge (2022) 93 GST 731 = 141 taxmann.com 731 = 64 GSTL 3 (SC).
Customs Tariff Act is used for GST – Customs Tariff Act is being used for
classification of goods for purpose of levy of GST w.e.f. 1-7-2017. There is no
separate tariff for purpose of GST.
Linking of Tariff Act and Main Act – Linking has been made in Customs, vide
section 2 of Customs Tariff Act and section 12 of Customs Act.

1.1 Background of the Tariff

As international trade increased, need was felt to have universal standard system of
classification of goods to facilitate trade flow and analysis of trade statistics. Hence,
Harmonised Commodity Description and Coding System (Generally referred to as
‘Harmonised System’ or simply ‘HS’) was developed by World Customs
Organisation (WCO) [www.wcoomd.org].
This is an International Nomenclature standard adopted by about 200 Countries to
ensure uniformity in classification in International Trade.
HSN is a multi-purpose international product nomenclature developed by WCO
(World Customs Organisation). It comprises about 5,000 commodity groups, each
identified by a six digit code, arranged in a legal and logical structure. The system
is used by more than 200 countries. Over 98% of the merchandise in international
trade is classified in terms of HS – WCO website – quoted in Hitachi Home and Life
Solutions v. CC (2012) 285 ELT 504 (CESTAT), where it was held that HSN
automatically classifies the trade parlance test.
Harmonised System (HS) provides commodity/product codes and description upto
4-digit (Heading) and 6-digit (Sub-Heading) levels only and member countries of
WCO are allowed to extend the codes upto any level subject to the condition that
nothing changes at the 4-digit or 6-digit levels. India has developed 8-digit level
classification to indicate specific statistical codes for indigenous products and also
to monitor the trade volumes – Chapter 4 Para 2.2 of CBIC’s Customs Manual,
2023.

HS is amended periodically in a cycle of 4/6 years, taking note of the trade flow,
technological progress etc. Member countries including India are under obligation
to amend the Tariff Schedules in alignment with HS – Chapter 4 Para 2.3 of CBIC’s
Customs Manual, 2023. (Latest changes have been brought into effect on 1-1-2022).

For purpose of uniform interpretation of HS, the WCO has published detailed
Explanatory Notes to various headings/sub-headings. WCO in its various
committees discusses classification of individual products and gives classification
opinion on them. Such information, though not binding in nature, provides a useful
guideline for classifying goods – Chapter 4 Para 2.4 of CBIC’s Customs Manual,
2023.
Customs Tariff uses 8 digit nomenclature. ITC (HS) published by DGFT has 10 digit
classification.
Permissibility of import and export is governed by the DGFT’s ITC(HS) [Import
Trade Control (Harmonised System)] classification of import and export goods,
published by DGFT. The nomenclature arranges goods as in the HS to regulate
Foreign Trade Policy and collating the statistical analysis of imports and exports of
the country – Chapter 4 Para 2.11 of CBIC’s Customs Manual, 2023.
Case law in respect of relevance of HSN in classification of a product is discussed in
next chapter.

1.2 Tariff Contains Schedules

Customs Tariff Act has two Schedules – first schedule is in respect of Import
Tariff, which we have discussed above. Second Schedule is ‘Export Tariff’, showing
export duties leviable. Since most of exports are exempt from export duty, the
schedule contains only 50 items (as on 1-1-2022), out of which many are exempt by
way of a notification No. 27/2011-Cus dated 1-3-2011 as amended.

1.3 Sections, Chapters and Headings in Tariff

There are 21 sections in case of Customs Tariff.
Methodology of classification of goods – In the Tariff Schedule,
commodities/products are arranged in a fixed pattern with the duty rates specified
against each of them. The pattern of arrangement of goods in the Tariff is in
increasing degree of manufacture of commodities/products in the sequence of
natural products, raw materials; semi-finished goods and fully finished
goods/article/machinery, etc. The Indian Customs Tariff has 21 Sections and 98
Chapters. Section is a group consisting 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 commodities
arranged at four digit, six digit and eight digit levels. Every four-digit code is called
“heading” and every six digit code is called a “sub-heading” and 8 digit code is
called a “Tariff Item” – Chapter 4 Para 2.1 of CBI&C’s Customs Manual, 2023.
Sections in Customs Tariff – A ‘section’ is a grouping of a number of Chapters
which codify a particular class of goods. Each of the sections is related to a broader
class of goods e.g. Section I is ‘Animal Products’, Section VII is ‘Plastics and
Articles thereof’, Section XI is ‘Textile and Textile Articles’, Section XVII is
‘Vehicles, Aircrafts, Vessels and associated transport equipment’, etc. Section Notes
are given at the beginning of each Section, which govern entries in that Section.
These notes are applicable to all Chapters in that section.
Section divided in Chapters and chapters in sub-chapters – Each of the
sections is divided into various Chapters and each Chapter contains goods of one
class. For example, Section XI relates to Textile and Textile Articles and within that
Section, Chapter 50 is Silk, Chapter 51 is Wool, Chapter 52 is Cotton, Chapter 53 is
other vegetable textile fabrics, Chapter 61 is Articles of Apparel and so on.
There are 98 chapters out of which Chapter 77 is blank, which is kept reserved for
future use.
Some Chapters are divided into sub-chapters e.g. Chapter 72 (Iron and Steel) is
divided into I:
I – Primary Materials
II – Iron and Non-Alloy Steel
III – Stainless Steel and
IV – Other Alloy Steel.
Chapter Notes – Chapter Notes are given at the beginning of each Chapter, which
govern entries in that Chapter.
Headings and sub-headings within the Chapter – Each chapter and sub-chapter
is further divided into various headings depending on different types of goods
belonging to same class of products.
For instance, Chapter 50 relating to Silk is further divided into 5 headings. 5001
relates to Silk worm cocoons, 5002 relates to raw silk, 50.03 relates to silk waste
etc. The headings are sometimes divided into further subheadings. For example
5003 10 means ‘silk waste not carded or combed’, while 5003 90 means ‘other silk
waste’. These are preceded by single dash. 5003 90 is further classified as 5003 90
10 (Mulberry silk waste), 5003 90 20 (Tussar waste) and 5003 90 90 (Other).
Grouping of goods – In the Tariff Schedule, commodities/products are arranged in
a fixed pattern with the duty rates specified against each of them. The pattern of
arrangement of goods in the Tariff is in increasing degree of manufacture of
commodities/products in the sequence of natural products, raw materials, semi-
finished goods and fully manufactured goods/article/machinery etc. – Chapter 4
Para 2.1 of CBI&C’s Customs Manual, 2023.

Eight Digit classification – All goods are classified using 4 digit system. These are
called ‘headings’. Further 2 digits are added for sub-classification, which are
termed as ‘sub-headings’. Further 2 digits are added for sub-sub-classification,
which is termed as ‘tariff item’. Rate of duty is indicated against each ‘tariff item’
and not against heading or sub-heading.

The same classification will be used by DGFT (Director General of Foreign Trade)
and DGCIS (Director General of Commercial Intelligence & Statistics). The
additional 2 digits are to facilitate and provide flexibility in international trade. The
common classification will reduce transaction costs and reduce diversion of
classification among different agencies.

1.4 Coding of Dashes

Single dash (-) at the beginning of description of any article in Tariff indicates a
group, while two dashes (- -) at the beginning indicate a sub-group. The single dash
(-) indicates primary classification of article covered by the heading, while double
dash (- -) is the sub-classification of the preceding article which has single dash (-)
i.e. it is a sub-classification of primary classification.
Triple dash (- – -) and quadruple dash (- – – -) indicate sub-sub-classification of
immediately preceding description of article, which has ‘-‘ or ‘- -‘. In other words, a
single dash or double dash may be followed by either three dashes or four dashes.
Both three dashes or four dashes are used to indicate 8 digit classification i.e. ‘tariff
item’.
Goods to fall in tariff entry with double dash (- -) have to satisfy specification of
single dash (-) preceding them – Schenectady Herdillia Ltd. v. CCE (2007) 208 ELT
110 (CESTAT).
Following hypothetical example illustrating classification of ‘Ready Made Garments’
will make the distinction clear [Note that this is not actual extract from the tariff]
A Ready Made Garments
AA – Men’s wear
AA-1 –– Suits
AA-2 –– Shirts
AA-3 –– Other
AB – Ladies wear
AB-1 –– Salwar
AB-2 –– Skirts
AB-3 –– Other
AC – Other
The ‘ready made garments’ are classified as:
(a) Men’s wear
(b) Ladies wear
(c) Other.
The ‘ready made garments’ are classified as:
(a) Men’s wear
(b) Ladies wear
(c) Other.
The men’s wear and ladies wear are further sub-classified. Thus, ‘Other’ in AA-3
means men’s wear other than suits and shirts, while ‘other’ in AC means all ready-
made garments excluding Men’s wear and Ladies wear.
Rule 6 of Interpretation Rules of Schedule to Tariff state that Classification of goods
in sub-headings shall be determined in terms of those sub-headings. Only sub-
headings at the same level are comparable e.g. in aforesaid example, AB-1 and AB-3
can be compared, but AB-3 cannot be compared with (say) AA-3.
The men’s wear and ladies wear are further sub-classified. Thus, ‘Other’ in AA-3
means men’s wear other than suits and shirts, while ‘other’ in AC means all ready-
made garments excluding Men’s wear and Ladies wear.
Rule 6 of Interpretation Rules of Schedule to Tariff state that Classification of goods
in sub-headings shall be determined in terms of those sub-headings. Only sub-
headings at the same level are comparable e.g. in aforesaid example, AB-1 and AB-3
can be compared, but AB-3 cannot be compared with (say) AA-3.

1.5 Searching HSN Code on CBIC website

Search facility is available on website. The search can be on basis of technical
description as well as description through trade or commercial description. It is
available at pre-login and post-login. Go to Home> Services> User Services >
Search HSN Code. The search is based on Artificial Intelligence and Machine
language linked with the e-invoice declaration database
– https://www.gst.gov.in dated 6-1-2022.

1.6 Import Policy Aligned with Customs Tariff and HSN

Import Policy has been specified item-wise, termed as ITC (HS) 2022 [Import Trade
Classification (Harmonised System) of Import Items, 2022].
The ITC (HS) 2022 is aligned with Customs Tariff, which has been amended w.e.f.
1-1-2022.
ITC (HS) 2022 has been notified vide DGFT Notification No. 54/2015-20 dated 9-2-
2022. Updated ITC (HS) 2022 is available on website of DGST (https://dgft.gov.in).
2. Overview of Customs Tariff
Following is broad grouping of goods in Tariff:

 Animal Products (Section I – Chapters 1 to 6)

 Vegetable Products (Section II – Chapters 6 to 14)
 Animal or vegetable fats and oils (Section III – Chapter 15)
 Prepared foodstuffs, beverages (Section IV – Chapters 16 to 24)
 Mineral Products (Section V – Chapters 25 to 27)
 Products of Chemicals and allied industries (Section VI – Chapters 28 to 38)
 Plastics and Rubber and their articles (Section VII – Chapters 39 and 40)
 Raw hides and Skins, Leather and articles (Section VIII – Chapters 41 to 43)
 Wood, cork, straw and their articles (Section IX – Chapters 44 and 46)
 Pulp of wood, Paper, Paperboard and articles (Section X – Chapters 47 to 49)
 Textile and Textile Products (Section XI – Chapters 50 to 63)
 Footwear, Headgear, Umbrellas, Articles of human hair (Section XII –
Chapters 64 to 67).
 Articles of stone, plaster, ceramic, mica, glass (Section XIII – Chapters 68 to
70)
 Pearls, precious metals (Section XIV – Chapter 71)
 Base metals and articles of base metal (Iron, Steel, Copper, Nickel, Zinc, Tin
etc.). (Section XV – Chapters 72 to 83)
 Machinery and mechanical appliances, electrical equipments, television etc.
(Section XVI – Chapters 84 and 85)
 Vehicles, Aircrafts, vessels and associated transport equipment (Section XVII
– Chapters 86 to 89)
 Optical, photographic, medical, surgical instruments, clocks, musical
instruments (Section XVIII – Chapters 90 to 92)
 Arms and Ammunition (Section XIX – Chapter 93)
 Misc. Manufactured articles like Furniture, toys etc. (Section XX – Chapters
94 to 96)
 Works of Art, collectors’ pieces and antiques (Section XXI – Chapters 97 to
99).

Special provisions in Customs Tariff – Though most of goods are classified as

per above system, special classification is used in certain cases – * All goods
imported under ‘project imports’ – 98.01 * All laboratory chemicals in packs less
than 500 gms or 500 ml – 98.02 * All baggage of passengers or member of crew –
98.03 * Goods for personal use imported by post or air – 98.04 * Stores on board of
vessel or aircraft – 98.05. Thus, those goods will be classified in these headings,
irrespective of actual classification as per the Customs Tariff.
Columns in CTA – In Customs Tariff, there are five columns:
(1) Tariff Item
(2) Description of goods
(3) Unit
(4) Standard Rate of Duty
(5) Rate of duty for Preferential Area
Government charges lower customs duty in case of import of some specified goods
from Myanmar, Bangladesh, Mauritius, Seychelles, Nepal, Tonga etc. If preferential
rate is not specified for a particular product, the standard rate of customs duty will
apply.