Sections, Chapters and headings in 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.
Central Excise Tariff is divided in 20 sections, while there are 21 sections in case of Customs Tariff.
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.
Some Chapters are divided into sub-chapters e.g. Chapter 72 (Iron and Steel) is divided into 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 HSN, 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 HSN 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 1.2 of CBE&C’s Customs Manual, 2011.
Eight Digit classification in excise and customs – 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’. Further2 digits are added for sub-classification, which is termed as ‘tariff item’. Rate of duty is indicated against each ‘tariff item’ and not against heading or sub-heading.