It’s always a real time act while getting the goods cleared from customs wherein product classification plays a vital role to decide correctness of duty payable/livable, on other side this is very important for government authorities (customs) also to ascertain proper classification of goods as this whole exercise is part of a whole country’s commerce study based on which countries EXIM policies are decided. From the laymen prospective it is important to understand reason of such acts from government agencies readings of which difficult as complex technical words are being used in all the law / regulation books. The entire activity is very specific and need proper attention / expertise… this is the grey area where most of the companies (Importer/Exporters/Logistics Service Providers involved into goods clearances) are lacking… taking my thoughts further wherein I am trying to create trade consciousness in admiration of proper product classification my this thought had motivated me to write this blog…
Firstly, we need to understand why this is so important for government / trade and under which law it is being governed internationally
Fastest changing requirements for speed of transport had unfolded new scopes for both, but simultaneously has created a need for rapid / accurate product classification & translations.
Product classification plays a pivotal role in economy study of a countries & comparison of world trade statistics as required under the provision of GATT.
Arrant classification can not only assist the person involved for his daily clearance activities, can simply also enhances synergies with customs while working as an extended arm in-between authorities & customers for speedy clearances.
Classification being a vast subject hence demands clear guidelines, thus one common procedure were agreed by world customs organization (WCO) under the guidelines from world trade organization (WTO) for international trade called as Harmonized system (HS) to achieve international uniformity in the classification of goods.
Classification for all products is mandatory so as to understand the flow of incoming / outgoing products & control the countries commerce.
Wrong classification can lead to confusion in countries statistics / stocks / funds or can result in severe black out of correct information.
Wrong classification can compromise government revenue which may result in short levy of import duties or over payment of export incentives.
Correct classification safeguard local industry from international price war.
Wrong classification can invite malpractices, which are detrimental to the countries’ interest.
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