The Customs Tariff Act, 1975 :
(a) Schedules to tariff
(b) Rules of interpretation and explanatory notes
The Indian Customs Tariff is based upon the Harmonized System of Nomenclature.
The Harmonized Commodity Description and Coding System (HS) of tariff nomenclature generally referred to as “Harmonized System of Nomenclature” is an
internationally standardized system of names and numbers for classifying traded products developed and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization.
Along the lines of HSN, the customs tariff has a set of Rules of Interpretation of the First Schedule i.e. Import tariff schedule and General Explanatory notes.
(i) Rules of interpretation:- Six
(ii) General explanatory notes: Three
These rules of interpretation and general explanatory notes are an integral part of the Schedule. The purpose of inclusion of the rules of interpretation and the general explanatory notes as an integral part of the first schedule is to give clear direction as to how the nomenclature in the schedule is to be interpreted and to give statutory force to the interpretative rules and the general explanatory notes.
(c) First Schedule of the Customs Tariff
The First Schedule comprises of 98 chapters grouped under 21 sections.
(i) Sections: A group of Chapters representing a particular class of goods.
(ii) Chapters: Each section is divided into various chapters and sub-chapters. Each chapter contains goods of one class.
(iii) Chapter notes: They are mentioned at the beginning of each chapter. These notes are part of the statute and hence have the legal authority in determining the classification of goods.
(iv) Heading: Each chapter and sub-chapter is further divided into various headings.
(v) Sub-heading: Each heading is further divided into various sub-headings.