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Harmonized system - Shanmugam IAS academy in coimbatore
Harmonized system

HS CODE TO KHADI

What’s in news?

Khadi has been allocated a separate Harmonised System (HS) code by the commerce and industry ministry.

Key data’s:

  • Khadi and Village Industries products are eco-friendly and natural, and are in great demand in the international markets.
  • The KVIC comes under the administrative control of the MSME ministry.
  • Export Promotional Council status” to the KVIC in 2006, to boost the export of Khadi products but there was a lack of exports due to its general nomenclature normal fabric under the textile head.
  • In the absence of separate HS code, the export of Khadi products was difficult to categorise and calculate.
  • Now, a separate Harmonised System (HS) code was allocated to Khadi by the Commerce and Industry Ministry.
  • The allocation of Harmonised System (HS) code to the product is expected to boost its exports in the upcoming years.

Existing Problem:

  • Khadi did not have its exclusive HS code, so as a result, all the data regarding export of this signature fabric used to come as a normal fabric under the textile head.
  • It brings the export of the product down.

Harmonized System (HS):

  • The Harmonized Commodity Description and Coding System generally referred to as “Harmonized System“.
  • It is a multipurpose international product nomenclature.
  • Developed and maintain by “World Customs Organization (WCO)”.
  • It comprises about 5,000 commodity groups, each identified by a six-digit code.
  • Over 98% of the merchandise in international trade is classified in terms of the HS. 
  • The system is governed by “The International Convention on the Harmonized Commodity Description and Coding System”. 

World Customs Organization (WCO):

  • WCO is an independent intergovernmental organization.
  • Hq:Brussels, Belgium.
  • Established year: 1952 as “Customs Co-Operation Council (CCC)”.
  • Renamed as “World Customs Organization (WCO)” in 1994.
  • It is the only international organization with competence in Customs matters and is considered as voice of international Customs community.
  • Aim: To enhance efficiency and effectiveness of member customs administrations and assist them to contribute successfully to national development goals, particularly revenue collection, national security, trade facilitation, community protection, and collection of trade statistics.
  • It plays leading role in discussion, development, promotion and implementation of modern customs systems and procedures.

Khadi:

  • Khadi / Khaddaris handspun, hand-woven natural fiber cloth mainly made out of cotton (with negligible pesticides) and may also include silk or wool made by the artisans from rural India, mostly 70% artisans were women.
  • Khaddar khadi is usually referred to a rough textured fabric.
  • In 2019 it was reported that overall khadi sales in India have risen by 28% in the 5-period preceding 2018-2019.
  • It remains cool in summer and hot in winter season.

 

Links to note:

https://www.iasipstnpsc.in/world-customs-organisation/

https://timesofindia.indiatimes.com/business/india-business/khadi-gets-separate-hs-code/articleshow/71941243.cms

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