2022: First Major reform in the Logistic Sector

Logistics sector saw one of the biggest reforms in recent years right at the start of FY 2022. HS code amendments undertaken by World Customs Organisation (WCO) has significantly affected all parties linked with the logistics  sector. WCO has instituted 351 sets of changes of Harmonised System Nomenclatures of goods across various categories. ‍

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What is Harmonised System (HS)

Harmonised System - is standardised numerical method of classifying various goods traded across the globe. Customs Authorities around the world use these codes to classify, assess duties and collect statistics. Around 158 countries are contracted to use this system of classifying the goods into 97 chapters.

HS 2022 changes were done because

1. New products which weren’t specially identified and classified under this system like Unmanned Aerial Vehicles, Nicotine based products, have received new classification codes
2. Environmental and Social Concerns regarding e-waste moving across the world without tracking. HS 2022 offers specific entries to such goods.
3. Low trade volume goods under sub-headings needed to be omitted. As there is no need to track these goods.
4. High Volume Goods like smartphones - which didn’t have any specific entry before have been included. In HS 2022 smartphones gets it own subheading making it visible and easier to track.
   

Impact on Aviation Sector in India due to HS 2022

HS 2022 has significant impact on the aviation sector as some headings have been omitted and other reclassified.

8803- Parts of Aircraft or Spacecraft completely omitted

8807 - A new sub-heading with code 8807 is created to replace 8803. 

8806- Unmanned Aerial Vehicle or Aircraft - A new category added under HS 2022.  This category was created to specifically track movement of such goods across the world as these vehicles can be a security threat. Customs has further classified this by maximum take off weight to correctly identify these goods. 

Changes to Customs Notification 50/2017

Due to changes to HS 2022, Indian customs one of the largest tariff based notification has been amended significantly to accommodate the new changes according to HS 2022.  50/2017 provides significant tariff benefits to Scheduled Passenger Operators, Non-Scheduled Passenger Operators, Scheduled Cargo Operators, Non Scheduled Cargo Operators, Flight training institutes and Maintenance and Repair Organisations in India .

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Effective date 01 Jan 2022

The changes are effective 01 Jan 2022, and Indian customs has already incorporated the changes from HS 2022. Companies must note of these changes while filing documents with Customs, creating invoices and /or any transport related document. 

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