Change in Customs Tariff w.e.f. January 1, 2022

by | Dec 31, 2021 | Insight

This is to update you that Section 104(iii) of the Finance Act, 2021 which prescribed amendments in the First Schedule of the Customs Tariff Act, 1975 (‘Customs Tariff’) will become effective from January 1, 2022. This is to align the Customs Tariff with globally evolving technologies as well as the Harmonized System of Nomenclature (HSN), 2022 which proposes 351 amendments to existing HSN.

Few illustrative amendments are as follows:

  1. Chapter Heading 8485 has been added covering ‘Machines for Additive Manufacturing
  2. In Chapter 85, definitions of ‘smartphone’, ‘flat panel display modules’, ‘LED lamps’ etc. have been added in Chapter Notes. There are corresponding amendments in respective Chapter Headings as well. For example, separate tariff Items for Smartphones and other phones have been added in Chapter Heading 8517
  3. Chapter Heading 8524 has been added for ‘Flat panel display modules whether or not incorporating touch-sensitive screens
  4. New tariff items have been added to Chapter Heading 8549 covering ‘Electrical and Electronic Waste and Scrap
  5. Sub-heading Notes for Sub-Heading 870822 and various Tariff Items have been inserted in Chapter Heading 8701

Corresponding changes have been made in GST rate and exemption Notifications vide Notification No.(s) 18/2021-Central Tax (Rate), 19/2021-Central Tax (Rate) and 20/2021-Central Tax (Rate) and Customs rate and exemption Notifications vide Notification No.(s) 55/2021-Customs, 56/2021-Customs, 57/2021-Customs, 58/2021-Customs, 59/2021-Customs all dated December 29, 2021.

NITYA Comments: The importers are well-advised to analyse impact of aforesaid changes on effective import duties on goods imported by them. Further, these changes will also impact 8-digit classification followed by taxpayers for payment of GST on goods supplied by them.