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February 2022
India has enacted significant changes in the classification of goods under the India Customs Tariff Act, effective January 1, 2022, that will affect duty rates and exemptions.
These changes follow release by the World Customs Organization (WCO) of the 7th edition of the Harmonized System (HS) nomenclature, also effective January 1, 2022. Because India is a party to the HS convention, it has made these numerous changes in its Customs Tariff Act to follow the WCO’s latest HS release.
Action item: Taxpayers need to analyze the impact of these significant changes on their supply chains. These changes will require careful evaluation to assess their impact on Indian imports and to identify correct tariff payments, tariff exemptions, and timely compliance.
The changes to the India Customs Tariff Act are extensive: 351 amendments at the six-digit level, and the replacement of 347 tariff headings with more than 1,000 new tariff headings. The amendments also include the addition of new explanations, exclusions, and inclusions from chapter notes, and reshuffling of tariff headings within the same chapter headings.
The tariff headings of imports affecting industry in general, such as imports under Chapters 70, 84, and 85, have undergone numerous changes.
The following are a few examples of the latest changes:
These changes could have numerous impacts, such as:
Principal, Customs and International Trade National Practice Leader, PwC US