TIOL-DDT 146 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#663399" size="3">TIOL-DDT
146</font><br>
29 06 2005<br>
Wednesday</b></font></p>
<p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>HSN amendments to be effective from 1.1.2007 - What’s new?</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Is a mobile
phone classified in the same heading as a traditional line telephone? Is a
multi-function office machine incorporating a scanner, a copier, a printer
and a fax to be regarded as a printer, a copier or something else? What is
the distinction between a household vacuum cleaner and an industrial vacuum
cleaner? <br>
<br>
These questions are sought to be answered in the amended Harmonized System,
coming into force on 1 January 2007. The HSN is the ultimate in tariff classification
and it is supposed to contain a heading for every item in the world. But technology
and ingenuity of the human mind do not wait for Customs officers gathered
in Brussels to decide classification. Mind boggling and unimaginable products
beyond the comprehension of the Tariff makers are hitting the market everyday.
Amending the HS is in accordance with the HS Convention, which emphasizes
the importance of ensuring that the HS is kept up to date in the light of
changes in technology or in patterns of international trade and stipulates
that it is for the HS Committee to propose such amendments as may be considered
desirable, having regard, in particular, to the needs of users. <br>
<br>
The work on the 2007 amendments commenced in the HS Review Sub-Committee in
2000 and the HS Committee finalized the work in May 2004. The amendments,
in the form of a draft Recommendation, were subsequently submitted to the
WCO Council which adopted the Recommendation at its Sessions in June 2004.
The amendments were finally approved by the HS Contracting Parties in January
2005 and will come into force on 1 January 2007. <br>
<br>
<font color="#006633"><b>But why amend the HSN?</b></font><br>
<br>
•<b> Technological progress</b><br>
<br>
Most of the electronic equipment today is capable of performing several functions.
Take the example of a mobile phone with built-in camera and perhaps also an
MP3 player or the multi-function office machine which is a printer, fax, copier
and phone. As a result, the amendments include a revised definition of computers
- or automatic data processing machines as they are called in the HS - to
reflect that these machines are basically all digital, as well as a clarification
of the classification of separately presented printers, network equipment,
loudspeakers, microphones, cameras, and monitors and projectors used in conjunction
with a computer. All printers, for example, have been grouped in a single
heading. To give just one example, heading 85.17 will now will be as follows<br>
<br>
85.17 Telephone sets, including telephones for cellular networks or for other
wireless networks; other apparatus for the transmission or reception of voice,
images or other data, including apparatus for communication in a wired or
wireless network (such as a local or wide area network), other than transmission
or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28.<br>
instead of<br>
<br>
Electrical apparatus for line telephony or line telegraphy, including line
telephone sets with cordless handsets and telecommunication apparatus for
carrier-current line systems or for digital line systems; videophones <br>
<br>
as at present. <br>
<br>
• <b>Trade practice</b><br>
<br>
Some products become obsolete in international trade whereas other merchandise
becomes more important. As a general rule, headings and subheadings are deleted
if the annual world trade is less than USD 100 million and 50 million, respectively.
However, these thresholds do not apply for headings and subheadings covering
products of social or environmental concern. To reflect this change in trade
patterns, a number of headings and numerous subheadings have been deleted.
On the other hand, new subheadings have been created for some varieties of
cut flowers, macadamia nuts, bamboo shoots, and drinking glasses, to mention
but a few.<br>
<br>
<b>• Necessity of uniform application</b><br>
<br>
During their daily work, HS users come across terms and expressions that may
be interpreted differently and thus leading to non-uniform application of
the HS. Since uniform classification in the HS is one of the WCO’s main
objectives, it is necessary to improve the wording whenever required. As an
example, the term “assembled parquet panels” has created some
difficulties in the past since there are different views on the meaning of
the term “parquet” in different parts of the world. Whereas “parquet”
must show a kind of mosaic pattern in one part of the world, a striped flooring
would qualify as “parquet” in other parts. To avoid this confusion,
the term “assembled parquet panels” has been replaced by “assembled
flooring panels”.<br>
<br>
• <b>Social and environmental concerns</b><br>
<br>
As a multi-purpose nomenclature, the HS is also used to facilitate the monitoring
and control of various products of social and environmental concern. To accommodate
this important issue, often at the request of other international organizations,
new subheadings have been created for certain species of fish (e.g. swordfish
and toothfish), hazardous chemicals covered by the Rotterdam Convention (all
compounds of mercury, excluding amalgams, grouped in a new heading), mixtures
containing ozone-layer depleting substances covered by the Montreal Protocol,
bamboo products, and products containing asbestos.<br>
<br>
For us in Taxindiaonline, this means, both the Customs and Excise Tariffs
will be changed and with much difficulty we had put these tariffs in our <b>Taxindiaonline’s
XCuSE</b> and we will have to redo them all over again. We will.<br>
<br>
<b><font color="#006633">Common Cause Shourie is no more</font></b><br>
<br>
The man who redefined Public Interest Litigation(PIL) HD Shourie is no more.
DDT deeply mourns the death of the man who made common cause his mission.
An ICS officer, Shourie never really retired. He got re-tyred and ran a crusade
on many issues affecting the common man. The Right to Information Bill is
a result of his untiring efforts. Lakhs of poorly paid pensioners were indebted
to him for making their lives a little better with a slightly better pension
as a result of his PIL against discrimination. His PILs were really Public
Interest ones and not Publicity Interest Litigations. He took on the legal
profession when he approached the Supreme Court to declare strike by lawyers
illegal. <br>
<br>
<font color="#006633"><b>5% cut in Customs rates and comprehensive Service
Tax </b></font><br>
<br>
The Finance Minister Mr. Chidambaram told the Chief Ministers in the National
Development Council meeting that the Centre proposed to reduce the peak Customs
duty rate by 5 per cent, move towards one central value-added tax rate and
make the coverage of service tax more comprehensive. <br>
<br>
<font color="#FF6666"><b>Until Tomorrow with more DDT<br>
<br>
Have a nice day. <br>
<br>
Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b></font>
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