The Hindu Business Line : `New trade classification codes will hit industry'

The DGCIS has drawn attention to the threshold turnover limit of Rs 200-250 crore per annum, wanting to know the basis on which the Customs Department could arrive at such a figure.

Kolkata , Jan. 17

The new Harmonised System of Nomenclature (Tariff Classification System, launched from January 1, based on changes made by the Department of Revenue in the eight digit commodity classification of the Customs Tariff Act, has made smaller EPCs unhappy owing to omission of several item codes pertaining to their exports.

Classification

An abrupt change in the ITC-HS codes, it is felt, was bound to disturb trade/industry as most of trade promotion schemes and incentives were directly linked to the trade classification codes.

Mr Pradeep Kr Shaw, Chairman of Shellac and Forest Produce Export Promotion Council, told Business Line here that now raw materials, finished and value-added products under Lac have been clubbed together and brought under single classification with 30 per cent Customs tariff.

He said tariff on Seedlac, a raw material imported regularly for making value-added Lac, was now jacked up from 5 per cent to 30 per cent, hitting the industry hard. Seeking an immediate correction, he said this was against the accepted principle of low duty on raw materials and high tariff on finished items.

The deletions (of some of the codes) are also said to have significant statistical value. Seeking a fresh look into the matter, Mr S.K. Das, Director-General of Commercial Intelligence and Statistics (DGCIS), Kolkata, said while "the Central Board of Excise and Customs can look at the data from the revenue angle, DGCIS will have to examine it from the classification angle."

Panel meeting

It is learnt that the proposed changes were discussed in detail by an inter-ministerial committee before finalisation.

While comments of the DGCIS, headquartered at Kolkata, were sought by the office of the DGFT, it is learnt that the DGCIS, mainly concerned with the commodity classification aspect, was not actually involved in the subsequent deliberations of the committee.

The DGCIS has also drawn attention to the threshold turnover limit of Rs 200-250 crore per annum, wanting to know the basis on which the Customs Department could arrive at such a figure.

Mr Shaw said, "We are indeed surprised that such a simplisitic and narrow criteria can be a basis for revision of such a highly sensitive and important issue like ITC (HS) Code".

Mr Das said there could not be a uniform turnover threshold limit because an item of low volume today may emerge as an extremely important one tomorrow for the country's exports, like handloom products and handicrafts.

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