Page 42 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 3: Classification and Valuation of Excisable Goods

3.1.1 Scheme of Classification Notes

CETA and Customs Act both have sections and chapters. Remember you have read above that
the scheme of class is common for both CETA and Customs Act. Each section has various
chapters. A section relates to a class of goods e.g., Section – I is ‘Animal Products’, Section – XI is
‘Textile Products’, Section – XVII is ‘Vehicles, Aircraft, Vessels and Other Transport Equipments’.

A chapter contains goods of one class e.g., Section – XI of Textile Products has Chapter 50 relating
to Silk, Chapter 51 relating to Wool and Chapter 52 relating to Cotton.
Each Chapter is further divided into headings and the headings are divided into sub-headings,
e.g., Chapter 50 of silk has 4 headings:
 50.01 Silk and Cocoons

 50.02 Raw Silk
 50.03 Silk Waste
 50.04 Silk Yarn
The heading 50.04 ‘Silk Yarn’ has sub-headings 5004.11 Silk Yarns with 85% or more silk and sub-
heading 5004.19 relates to Silk Yarns with less than 85% silk.
In this classification scheme let us elaborate on 5004.19, in this there are upto 6 digits. The first
two digits ‘50’ is chapter number; next two digits ‘04’ is heading number and next two digits after
decimal ‘19’ is subheading number.
The 2 more digits (to make these 6 digits to 8 digits) are additional digit to facilitate and provide
flexibility in international trade.

Notes The excise duty is chargeable at different goods at different rates. Therefore, goods
are classified for determination of duty. The classification of goods adopted in Central
Excise Tariff Act and Customs Act is common.
3.1.2 Broad Grouping in CETA

Following is broad grouping of goods in CETA:
1. Animal Products (Section I - Chapters 1 to 5)
2. Vegetable Products (Section II - Chapters 7 to 14)
3. Animal or vegetable fats (Section III - Chapter 15)

4. Prepared foodstuffs, beverages (Section IV - Chapters 16 to 24)
5. Mineral Products (Section V - Chapters 25 to 27)
6. Chemicals, Fertilisers, soap etc. (Section VI - Chapters 28 to 38)

7. Plastics and Rubber and their articles (Section VII - Chapters 39 and 40)
8. Leather and articles (Section VIII - Chapters 41 to 43)
9. Wood, cork, straw and their articles (Section IX - Chapters 44 and 46)
10. Pulp, Paper, Paper-board and articles (Section X - Chapters 47 to 49)

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