Difference between Tariff and Non-Tariff Notifications
IN yesterday's DDT, I had written, "But how did this become a Non-Tariff Notification? Board seems to have lost track of basic classification of notifications, whether Tariff or Non-Tariff.". I got several calls from concerned netizens - many from the department - asking me to explain the difference between Tariff and Non-Tariff Notifications. I too made several calls to find out the general perception about this and strangely, there is not much clarity even among departmental officers.
I tried to get some wisdom from that citadel of knowledge for Indirect Taxes, which is on a mission to educate the departmental officers and has embarked upon a massive training programme to preach and teach GST. I am referring to NACEN - the National Academy of Customs, Excise and Narcotics, which is recognised as an international Centre of Excellence.
In an e-book meant for departmental officers, NACEN explains the concept as:
Difference between Tariff and Non-Tariff Notifications
Tariff Notification is a notification which contains matters relating to tariff i.e. rate of duty. In other words, any notification having impact on effective rate of duty or in other words, providing for lower rate of duty (i.e. effective rate of duty) than the prescribed tariff rate of Central Excise duty/Customs duty, would be termed as Tariff Notification. The duty exemption provided through tariff notification may be either full or partial exemption from payment of duty/tax. Further, such exemption from payment of duty may be unconditional or may be subject to fulfillment of condition (s) specified in the notification. On other hand, notification used for amending existing rules or laying out new rules/ regulation or implementing various other provisions of the tax Statute, which does not have any impact on rate of duty, are called Non-Tariff notifications.
Non-Tariff Notification is distinguished from a Tariff notification by putting (N.T.) after the notification number. The words i.e. Central Excise or Customs or Service Tax is written just after number to distinguish as to whether notification issued relates to Central Excise or Customs or Service Tax law.
While Tariff and non-tariff notifications are distinguished in case of Custom duty and Central Excise duty, by putting letters NT in case of non-tariff notification, in case of service tax, no such distinction is made. In service tax, notification dealing with exemption from payment of service tax or dealing with amendment of rules etc. are numbered in the same manner, as the rate of Service Tax is prescribed in Section 66B of the Finance Act, 1994 itself and there is no separate Tariff Act for Service Tax.
The History:
Till 1988, there was no distinction between Tariff and Non-Tariff Notifications. They were plain customs or Central Excise Notifications. On 10.02.1988, CBEC issued a Circular No. 10/1998, wherein it was informed,
With effect from 1-1-1988 it has been decided to allot separate running serial numbers to Non-Tariff Notifications, i.e. Notifications issued under the various provisions of Central Excise and Salt Act, 1944 and Rules made thereunder, other than under rule 8 of the Central Excise Rules, 1944. Such Non-Tariff Notifications will be followed by the words "Non-Tariff" in abbreviated form as indicated below:-
Notification No....................................... /88-CENTRAL EXCISES (N.T.)
And once in a way, the CBEC itself gets confused as to whether a notification is plain or Non-Tariff. I have recounted such an instance recently in DDT 2885 and 2886 - CBEC Rescinds the Wrong Notification.
What's in a name? that which we call a rose
By any other name would smell as sweet- William Shakespeare