Executive Summary

This project gives us the detail of HARMONIC SYSTEM CODE known as HS code. The code plays a very important role in the International Trade. Importers and exporters are legally required to declare their products to Customs by means of HS codes. HS classification determines a product's rate of duty, its import and export admissibility, and whether or not it should be physically examined. I have done the above project ROLE OF HARMONIC SYSTEM CODE carefully in the INTERNATIONAL BUSINESS CO-ORDINATION UNIT (IBCU) OF LARSEN & TOUBRO HEAVY ENGINEERING, POWAI, MUMBAI under the guidance of MR.N RAVEENDRADOSS & MR JOHN REGISLON

CHAPTER I

INTRODUCTION LARSEN&TOUBRO LIMITED

Problem Statement
To recommend the best HARMONIC SYSTEM CODE to reduce the tax as each code has different tax rates.

COMPANY OVERVIEW
A technology driven USD 12.8 billion company that infuses engineering with imagination Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business. L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly. It continues to grow its overseas manufacturing footprint, with facilities in China and the Gulf region. Team of L&T comprises over 45000 employees worldwide.

The company's businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support. L&T believes that progress must be achieved in harmony with the environment. A commitment to community welfare and environmental protection are an integral part of the corporate vision. In response to changing market dynamics, L&T has gone through a phased process of redefining its organization model that facilitates growth through greater levels of empowerment. The new structure is built around multiple businesses designated Independent Companies or ICs

Independent Companies
Hydrocarbon Heavy Engineering L&T Construction Power Electrical & Automation Machinery & Industrial Products Information Technology Financial Services Ship Building Railway Projects

VISION

BENEFIT OF STUDY
To find out the HS CODE of L&T, Heavy Engineering products by studying the different Chapters and Section of the HARMONIC SYSTEM CODE and accordingly recommend the proper HS CODE. Importers and exporters are legally required to declare their products to Customs by means of HS codes. HS classification determines a product's rate of duty, its import and export admissibility, and whether or not it should be physically examined. In some countries, importers are required to report HS codes to Customs before their products are loaded for export. Over 200 countries, custom unions and economic unions are members representing 98% of world trade. One of the more important innovations of WCO was the Harmonized Tariff System code. The codes with the broadest coverage are first four digits and referred to as the heading. The HTS therefore sets forth all the international nomenclature through the 6-digit level and, where needed, contains added subdivisions assigned 2 more digits, for a total of 8 at the tariff-rate line (legal) level. Two final (non-legal) digits are assigned as statistical reporting numbers if warranted, for a total of 10 digits to be listed on entries.

CHAPTER II Literature review

LARSEN & TOUBRO LIMITED, HEAVY ENGINEERING

L&T's Heavy Engineering designs, manufactures & supplies precision custom engineered critical static hi-tech equipment & systems for the hydrocarbon sector including Oil & Gas Refinery, Cracker, Petrochemicals, Fertilizer etc. apart from meeting the requirements of Defence, Aerospace and Nuclear Power sectors. It also supplies Key Coal Gasification equipment including Coal Gasifiers& Syngas Coolers for Coal Gasification Plants. For the Hydrocarbon sector, L&T supplies hi-tech critical equipment such as Reactors, Pressure Vessels, and High Pressure - High Temperature Heat Exchangers worldwide. It has exported equipment and systems to more than 40 countries. For Nuclear Power Plants, range includes equipment for pressurized heavy water reactors, fast breeder reactors heavy water plants &fuel reprocessing plants. Also offered are end shields calandria steam generators, roof slab, high pressure exchangers apart from site services in new & operating plants. For the Defense Sector the range of products includes equipment & systems for: Naval marine Systems, Naval Combat Systems, Army&Defence electronics. The Shipyard is geared up to take up construction of niche vessels such as Specialized Heavy Lift Cargo Vessels, CNG Carriers, Tankers, Defense & Para Military Vessels & other Hi-tech Ships

For these industries the Division manufactures equipment using an exhaustive array of materials including low & high alloy steels, stainless and duplex stainless steels, clad & overlaid steels, exotic material such as nickel, monel, cupro-nickel, copper hastelloy titanium, zirconium, tantalium and new age composites Manufacturing activities are supported by engineering capabilities in thermal and mechanical design, special analysis including stress and vibration analysis, procurement, project management, logistics and specialized services for site-work, erection & commissioning.

L & T HEAVY ENGINEERING LOCATIONS

Powai(Mumbai) Hazira (Surat)- a super heavy manufacturing complex with its own waterfront Load On and Ro-Ro jetties Ranoli (Vadodara)- a specialized facility that handles stainless steel ,nonferrous, exotic material and advance composite material Coimbatore (Tamilnadu)- a precision manufacturing facility Talegaon (near Mumbai)- a weapon system and sensor integration complex Sohar(Oman)- a heavy engineering manufacturing complex through a JV with the Zubair Corporation

Significant contributions

Worlds largest Coal Gasifiers for a petrochemical complex in China Longest Product Spitter for Saudi Arabia Largest Ammonia Convertor for Australia Biggest FCC Regenerator for worlds largest refinery in India Largest Tubular Reactor for Kuwait petrochemical complex

FOLLOWING ARE THE EQUIPMENTS THAT L&T MANUFACTURES AND SUPPLY

REFINERY ARDS&HYDROCRACKER REACTOR DHDS/VGO/HDT REACTORS FCC REACTOR /REGENRATORS SCREWPLUG CLOSURE EXCHANGER VACCUM/CRUDE COLOUMN

OIL&GAS GAS TO LIQUID REACTOR WASTE HEAT RECOVERY BOILER SLUG CATCHER PRODUCTION SEPRATOR THREE PHASE SEPRATOR MOBILE HIGH PRESSURE PUMPING UNIT REACTOR AND HEAT EXCHANGER UNITS STAINLESS STELL AND CARBON STEEL CLAD COLOUMNS

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FERTILIZERS AMMONIA CONVERTORS CONVERTOR BASKETS HIGHPRESSURE HEAT EXCHANGER FOR AMMONIA SYNTHESIS LOOP WASTE HEAT RECOVERY PACKAGE SECONDRY REFORMERS ABSORBERS/REGENRATORS UREA REACTOR UREA STRIPPER

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PETROCHEMICALS TUBULAR REACTOR ACROLYTE REACTOR

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COAL GASIFICATION

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HARMONIC SYSTEM CODE

WHAT IS HARMONIC SYSTEM CODE?

The Harmonic System is the international standard for reporting goods to customs and other government agencies. It is a numeric language that is used by more than 200countries worldwide, and almost 98% of international trade. The HS was created and is administered by the Brussels-based World Customs Organization (WCO). In 1952, World Customs Organization was founded to simplify International trade. The WCO developed the Harmonized Tariff System (HS) which forms the basis for collection of custom duties and trade statistics for almost all countries .Over 200 countries, custom unions and economic unions are members representing 98% of world trade. One of the more important innovations of WCO was the Harmonized Tariff System code. The codes with the broadest coverage are first four digits and referred to as the heading. The HTS therefore sets forth all the international nomenclature through the 6-digit level and, where needed, contains added subdivisions assigned 2 more digits, for a total of 8 at the tariff-rate line (legal) level. Two final (non-legal) digits are assigned as statistical reporting numbers if warranted, for a total of 10 digits to be listed on entries. To ensure harmonization, the contracting parties must employ all 4- and 6digit provisions and the international rules and notes without deviation, but are free to adopt additional subcategories and note

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APPLICATIONS As of 17 October 2011 there are 206 countries or territories applying the Harmonized System worldwide representing 98%of worldwide trade. The HS is used as basis for -Customs Tariff -Collection of International trade statistics -Rules of origin -Collection of internal taxes -Trade negotiation -Transport tariff and statistics -Monitoring of controlled goods - Areas of Customs controls and procedures, including risk assessment, information technology and compliance.

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CLASSIFICATION OF CODES

(Chapter 1 - 5) - Section I-Live Animals; Animal Products. (Chapter 6-14) - Section II-Vegetable Products. (Chapter 15) - Section III-Animal or Vegetable Fats and Oils and their cleavage Products; Prepared Edible fats; animal or Vegetable waxes. (Chapter 16 -24) - Section IV-Prepared Foodstuffs; Beverages, Spirits and Vinegar; Tobacco and Manufactured Tobacco substitutes. (Chapter 25 -27) - Section V-Mineral Products. (Chapter 28 -38) - Section VI-Products of the Chemicals or Allied Industries. (Chapter 39 - 40) - Section VII-Plastics and Articles thereof; Rubber and Articles Thereof. (Chapter 41 - 43) - Section VIII-Raw Hides and Skins, Leather, Furskins and Articles thereof; saddlery and Harness; travel goods, Handbags and similar Containers; Articles of animal gut (other than silk-worm Gut). (Chapter 44 -46) - Section IX-Wood and Articles of Wood; Wood Charcoal; cork and articles or cork; Manufactures of Straw, of Esparto or of other Plaiting Materials; Basket ware and Wickerwork. (Chapter 47 -49) - Section X-Pulp of wood or of other Fibrous Cellulosic Material; Recovered (Waste and Scrap) Paper or Paperboard; Paper and Paperboard and articles thereof . (Chapter 50 -63) - Section XI-Textile and Textile Articles. (Chapter 64 -67) - Section XII-Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, seat-sticks, whips, Riding-crops and Parts
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thereof; Prepared Feathers and articles Made therewith; artificial Flowers; Articles of Human Hair. (Chapter 68 -70) - Section XIII-Articles of Stone, Plaster, Cement, Asbestos, Mica or similar Materials; Ceramic Products; Glass and Glassware. (Chapter 71) - Section XIV-Natural or Cultured Pearls, Precious or SemiPrecious Stones, Precious Metals, Metals clad with Precious Metal, and articles thereof; Imitation Jewellery; Coin. (Chapter 72 -83) - Section XV-Base Metals and Articles of Base Metal.

(Chapter 84 - 85) - Section XVI-Machinery and Mechanical Appliances; Electrical Equipment; Parts thereof; sound Recorders and Reproducers, Television Image and Sound Recorders and reproducers, Television Image and sound Recorders and Reproducers, and Parts and Accessories of such article . (Chapter 86 - 89) - Section XVII-Vehicles, Aircraft, and Vessels and Associated Transport Equipment. (Chapter 90 - 92) - Section XVIII-Optical, Photographic, Cinematographic, measuring, checking, precision, medical or surgical Instruments and apparatus; clocks and watches; musical instruments; part and accessories thereof. (Chapter 93) - Section XIX-Arms and Ammunition; Parts and Accessories thereof. (Chapter 94 - 96) - Section XX-Miscellaneous Manufactured Articles. (Chapter 97 - 98) - Section XXI-Works of art, Collectors' Pieces and Antiques

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The main chapters that was included for my project Chapter (1 - 5) - Section I-Live Animals; Animal Products Chapter 1: Live Animals. Chapter 2: Meat and Edible Meat Offal. Chapter 3: Fish and Crustaceans, Mollusks and other Aquatic Invertebrates. Chapter 4: Birds'' Eggs; Natural Honey; Edible Products of Animal Origin, not elsewhere specified or included. Chapter 5: Products of Animal Origin not elsewhere specified or included.

Chapter (6-14) - Section II-Vegetable Products Chapter 6: Live trees and other Plants; Bulb, Roots and the like; Cut flowers and Ornamental Foliage. Chapter 7: Edible Vegetables and Certain Roots and Tubers. Chapter 8: Edible Fruit and Nuts; Peel of Citrus Fruit or Melons. Chapter 9: Coffee, Tea, Mate and Spices. Chapter 10: Cereals. Chapter 11: Products of the Milling Industry; Malt; Starches; Insulin; Wheat Gluten. Chapter 12: Oil Seeds and Oleaginous Frits, Miscellaneous Grains, Seeds and Fruit; Industrial or Mechanical Plants; Straw and Fodder.
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Chapter 13: Lac; Gums, Resins and other Vegetable Saps and Extracts. Chapter 14; Vegetable Plaiting Materials; Vegetable Products not elsewhere specified or included.

Chapter 15 - Section III-Animal or Vegetable Fats and Oils and their cleavage Products; Prepared Edible fats; animal or Vegetable waxes

Chapter 15; Animal or Vegetable Fats and Oils and their Cleavage Products; Prepared Edible Fats; Animal or Vegetable Waxes Chapter (16 -24) - Section IV-Prepared Foodstuffs; Beverages, Spirits and Vinegar; Tobacco and Manufactured Tobacco substitutes Chapter 16: Preparations of Meat, of Fish or of Crustaceans, Mollusks or Other Aquatic Invertebrates. Chapter 17: Sugars and Sugar Confectionery. Chapter 18: Cocoa and Cocoa Preparations. Chapter 19: Preparations of Cereals, Flour, Starch or Milk; Pastry Cooks'' Products. Chapter 20: Preparations of Vegetables, Fruit, Nuts or Other Parts of Plants. Chapter 21: Miscellaneous Edible Preparations. Chapter 22: Beverages, Spirits and Vinegar. Chapter 23: Residues and Waste from the Food Industries; Prepared Animal Fodder. Chapter 24; Tobacco and Manufactured Tobacco Substitutes
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Chapter (25 -27) - Section V-Mineral Products Chapter 25: Salt; Sulphur; Earths & Stone; Plastering Materials; Lime & Cement. Chapter 26: Ores, Slag and Ash. Chapter 27; Mineral Fuels, Mineral Oils and Products of their Distillation; Bituminous Substance; Mineral Waxes Chapter (28 -38 ) - Section VI-Products of the Chemicals or Allied Industries Chapter 28: Inorganic Chemicals; Organic or Inorganic Compounds of Precious Metals, of Rare-Earth Metals, of Radioactive Elements or of Isotopes. Chapter 29: Organic Chemicals. Chapter 30: Pharmaceutical Products. Chapter 31: Fertilizers. Chapter 32: Tanning or Dyeing Extracts; Tannins and their Derivatives; Dyes, Pigments and Other Coloring Matter; Paints and Varnishes; Putty and other Mastics. Chapter 33: Essential Oils and Resinoids; Perfumery Cosmetics or Toilet Preparations. Chapter 34:Soap,Organic Surface-Active Agents, Washing Preparations, Lubricating Preparations, Artificial Waxes, Prepared Waxes Polishing or Scouring Preparations, Candles and similar Articles, modeling Pastes, "Dental Waxes" and Dental Preparations with Basis of Plaster. Chapter 35: Albuminoidal substances; Modified Starches; Glues; Enzymes Chapter 36: Explosives; Pyrotechnic products; Matches; Pyrophoric Alloys; certain combustible preparations.
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Chapter 37: Photographic or Cinematographic Goods. Chapter; 38 Miscellaneous Chemical Products Chapter (39 - 40 ) - Section VII-Plastics and Articles thereof; Rubber and Articles Thereof Chapter 39: Plastics and articles thereof. Chapter 40; Rubber and Articles thereof Chapter (41 - 43 ) - Section VIII-Raw Hides and Skins, Leather, Furskins and Articles thereof; saddlery and Harness; travel goods, Handbags and similar Containers; Articles of animal gut (other than silk-worm Gut) Chapter 41: Raw Hides and Skins (other than fur skins) and leather. Chapter 42: Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut). Chapter 43; Furskins and artificial fur; manufactures thereof Chapter (44 -46 ) - Section IX-Wood and Articles of Wood; Wood Charcoal; cork and articles or cork; Manufactures of Straw, of Esparto or of other Plaiting Materials; Basket ware and Wickerwork Chapter 44: Wood and Articles of Wood; Wood Charcoal. Chapter 45: Cork and Articles of Cork. Chapter 46; Manufacture of Straw, of esparto or of other plaiting material; basket ware and wickerwork

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Chapter (47 -49 ) - Section X-Pulp of wood or of other Fibrous Cellulosic Material; Recovered (Waste and Scrap) Paper or Paperboard; Paper and Paperboard and articles thereof Chapter 47: Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) of paper or paperboard. Chapter 48: Paper and paperboard; articles of Paper pulp, of paper or of paperboard. Chapter 49; Printed books, Newspaper, Pictures and other products of the printing industry, Manuscripts, Typescripts and Plans .

Chapter (50 -63 ) - Section XI-Textile and Textile Articles Chapter50: Silk. Chapter 51: Wool, fine or coarse animal hair, horse hair yarn and woven fabric Chapter 52: Cotton. Chapter 53: Other vegetable textile fibers; paper yarn and woven fabrics of paper yarn Chapter 54: Man-made Filaments. Chapter 55: Man-made staple fibers. Chapter 56: Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof. Chapter 57: Carpets and other textile floor coverings. Chapter 58: Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery.

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Chapter 59: Impregnated, coated, covered or laminated textile fabrics; Textile articles of a kind suitable for industrial use. Chapter 60: Knitted or crocheted fabrics. Chapter 61: Articles of apparel and clothing accessories knitted or crocheted Chapter 62: Articles of apparel and clothing accessories not knitted or crocheted. Chapter 63; other made-up textile articles, sets, worn, clothing and worn textile article rags Chapter (64 -67 ) - Section XII-Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, seat-sticks, whips, Riding-crops and Parts thereof; Prepared Feathers and articles Made therewith; artificial Flowers; Articles of Human Hair Chapter 64: Footwear, gaiters and the like; parts of such articles. Chapter 65: Headgear and parts thereof. Chapter 66: Umbrellas, sun umbrellas, walking sticks, seat-sticks, whips, riding-crops, and parts thereof. Chapter 67: Prepared feathers and down and articles made of feather or of down: artificial flower; articles of human hair. Chapter (68 -70 ) - Section XIII-Articles of Stone, Plaster, Cement, Asbestos, Mica or similar Materials; Ceramic Products; Glass and Glassware Chapter 68: Articles of stone, plaster, cement, asbestos, mica or similar materials. Chapter 69: Ceramic Products. Chapter 70; Glass and Glassware
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Chapter 71 - Section XIV-Natural or Cultured Pearls, Precious or SemiPrecious Stones, Precious Metals, Metals clad with Precious Metal, and articles thereof; Imitation Jewellery; Coin Chapter 71: Natural or cultured pearls ,precious or semi precious stone ,precious metals, metal clad with precious metal, and articles thereof ;imitation jewellery;coin

Chapter (72 -83 ) - Section XV-Base Metals and Articles of Base Metal. Chapter 72: Iron and Steel. Chapter 73: Articles of Iron or Steel. Chapter 74: Copper and articles thereof. Chapter 75: Nickel and Articles thereof. Chapter 76: Aluminum and Articles thereof. Chapter 77: Reserved for Possible Future Use. Chapter 78: Lead and Articles thereof. Chapter 79: Zinc and Articles thereof. Chapter 80: Tin and Articles thereof. Chapter 81: Other Base metals; Cermets articles thereof. Chapter 82: Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal. Chapter 83: Miscellaneous articles of base metal
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Chapter (84 - 85 ) - Section XVI-Machinery and Mechanical Appliances; Electrical Equipment; Parts thereof; sound Recorders and Reproducers, Television Image and Sound Recorders and reproducers, Television Image and sound Recorders and Reproducers, and Parts and Accessories of such article Chapter 84: Nuclear reactors, boilers, machinery and mechanical appliance; parts thereof. Chapter 85: Electrical machinery and equipment and parts thereof: sound recorders and reproducers, television image and sound recorders and reproducers and parts and accessories of such articles.

Chapter (86 - 89 ) - Section XVII-Vehicles, Aircraft, Vessels and Associated Transport Equipment Chapter 86: Railway or tramway locomotives, rolling-stock and parts thereof; rail-way or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signaling equipment of all kinds. Chapter 87: Vehicles other than railway or tramway rolling stock, and parts and accessories thereof. Chapter 88: Aircraft, Spacecraft and parts thereof. Chapter 89;Ships, Boats and Floating Structures

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(Chapter 90 - 92 ) - Section XVIII-Optical, Photographic, Cinematographic, measuring, checking, precision, medicalor surgical Instruments and apparatus; clocks and watches; musical instruments; part and accessories thereof Chapter 90: Optical, Photographic, Cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof. Chapter 91: Clocks and watches and parts thereof. Chapter 92; Musical instrument; parts and accessories or such articles

Chapter 93 - Section XIX-Arms and Ammunition; Parts and Accessories thereof Chapter 93; Arms and Ammunition; Parts and Accessories thereof

Chapter (94 - 96 ) - Section XX-Miscellaneous Manufactured Articles Chapter 94: Furniture; Bedding, Mattresses, Mattress supports, cushions and similar stuffed furnishings; Lamps and Lighting fittings, not elsewhere specified or included; illuminated signs, illuminate name-plates and the like; Prefabricated Building. Chapter 95: Toys, Games and Sports Requisites; Parts and Accessories thereof. Chapter 96; miscellaneous manufactured articles

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Chapter (97 - 98 ) - Section XXI-Works of art, Collectors' Pieces and Antiques Chapter 97: Works of Art, Collectors'' Pieces & Antiques. Chapter 98: Project Imports; Laboratory Chemicals; Passengers; Baggage; Personal importations by Air or Post; Ship Stores.

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INDIAN TARDE CLASSIFICATION-HARMONIZED SYSTEM(ITCHS) The Harmonization Code System (HS-Code) is a system of progressively more specific identifiers for a commodity. ITC-HS Codes or better known as Indian Trade Classification based on Harmonized System of Coding was adopted in India for Import-Export operations. Indian Customs uses an eight digit ITC-HS Codes to suit the national trade requirements. India accepted Indian Trade Classification based on Harmonized System [ITC (HS)] from 1987. Accordingly ITC (HS) compilation was brought out for the use by Indian Customs and allied agencies. Indian Customs, use a 8 digit ITC (HS) Code to suit the national requirements. HS Code at 6 digit level is used in all International Trading Documents as also in GSP certificates of origin etc. ITC (HS) Codes of 8 digit level is used by Indian Customs in shipping bills, export statistics etc. Perfecting commodity description, weeding out of defunct codes, addition of new codes, change of product descriptions etc., are taken up periodically as a part of the ongoing process towards perfection, and fine turing of harmonized systems of codes. Accordingly the Government of India, Ministry of Finance (Department of Revenue) has issued a Notification No. 109/2008-CUSTOMS (N.T.) dated 24th September, 2008, making further amendments in the First Schedule to the Customs Tariff Act, 1975 which comes into effect from 1st October 2008

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How to assign ITC (HS) Code? Identify the section to locate the type of product. Identify the chapter at 2 digit level. Identify the product heading at 4 digit level. Identify the HS Code of a product at 6 digit level. Identify the ITC (HS) Code at 8 digit level.

HS CODES ARE REVISED EVERY 5 YEARS i.e. 2002.2007 & 2012 54-No of chapters affected 95-No of subheadings removed 421-No of subheadings added 34-No of subheadings changed Additionally, changes break out by sector 98 relate to Agricultural sector 27 to Chemical sector 9 to Paper sector 14 to Textile sector 30 to machinery & High Technology sector An additional 37 that apply to variety of other sectors

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Understanding the Harmonized System

Chapter means the first 2 digits chapter heading (for example 01 is the chapter dealing with Live Animals)

Heading means the first 4 digit in tariff classification representing a product heading or a group of products covered by chapter (for example 0101 refers is the heading dealing with live horses, asses, mules and hinnies, whereas 0102 is the heading with live bovine animals)

Subheading means the first six digit in a tariff classification .The more six digit disaggregated level represents a specific product under a brooder heading (for example 0101.10 refers to subheading Purebred breeding animals of the kind captured by 0101 whereas 0102.10 refers Purebred breeding animals of the kind captured by 0102)

HSCODE 01 0 101 0 10110 0 1011010

ITEM DESCRIPTION Chapter 1-Live Animals Live Horses,Asses,Mules, Hinnies Pure-bred breeding animals Horses

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WORLD TRADE ORGANIZATION

What is World Trade Organization (WTO)? The World Trade Organization (WTO) is an organization that intends to supervise and liberalize International trade. The organization officially commenced on January 1, 1995,replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments]and ratified by their parliaments. The WTO is a rule base, Member-driven organization; all decision is made by the Member Governments and the rules are the outcome of negotiation among members. The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of Worlds trading nation and ratified in their parliaments. The goal is to help producers of goods and services, exporters and importers conduct their business.

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Fact Files Location - Geneva, Switzerland Established - 1 January 1995 Created by - Uruguay Round Negotiation (1986-94) Membership - 155 countries on 10 May 2012 Budget 196 million Swiss francs 2011 Secretariat staff 640 Head PascaLamy

WHAT IS ITS ROLE? The organizations purpose is to make trade flows as free as possible, so long as there are no undesirable side effects. This partly means removing obstacles. It also means ensuring that individuals, companies and governments what the trade rule are around the world, and giving them the confidence that there will be no sudden change of policy. In other words the rules have to be transparent and predictable. Because the agreements are signed and drafted by community of trading nation, often, after considerable debate and controversy, one of WTO s most important function is to serve as a forum for trade negotiation. A third important side to WTOs work is dispute settlement. Trade relation often involved conflicting interest. Contracts and agreements, including those painstakingly negotiated in the WTO system often need interpreting. The most harmonious way to settle differences is through neutral procedures based on agreed legal foundation. This is the purpose behind the dispute settlement process written in WTO agreements

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WTO& INTERNATIONAL TRADE The WTO is not an environment agency. The main objective of the WTO is to foster International trade and open markets but WTO rules permit members to take trade restricting measures to protect their environment under specific conditions. Two fundamental principles Govern International trade: National treatment and the Most favored nation (MFN). National treatment means any policy measure taken by a member should apply in the same way whether the good is imported and produced domestically. Provided they are similar products imports should not be treated less favorably than domestic goods. The MFN principle means that any trade measure taken by a member should be applied in a non-discriminatory manner across to all countries.

What are similar products? WTO case law refined the term 'similar' using four criteria: the products' physical properties - the products' end-use should be similar - consumers tastes and habits - the products' tariff classification

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The Role of WTO in International Trade is stipulated in the agreement establishing it and includes (1) The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements. (2) The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. (3) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. (4) The WTO shall administer Trade Policy Review Mechanism. (5) With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies.

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OBJECTIVES OF WTO

Important objectives of WTO are mentioned below: To implement the new world trade system as visualised in the Agreement; To promote World Trade in a manner that benefits every country; To ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs; To demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth; To enhance competitiveness among all trading partners so as to benefit consumers and help in global integration; To increase the level of production and productivity with a view to ensuring level of employment in the world; To expand and utilize world resources to the best; To improve the level of living for the global population and speed up economic development of the member nations

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WTO AGREEMENT

The WTO Agreement is the 1994 Marrakesh Agreement Establishing the WTO. It has four Annexes. Annex 1 includes the Multilateral Agreements on Trade. It is divided into three sections: Multilateral Agreements are agreements signed by all Members and therefore binding all WTO Members Annex 1 includes the Multilateral Agreements on Trade. It is divided into three sections: Annex 1A (the Multilateral Agreements on Trade in Goods); Annex 1B (the General Agreement on Trade in Services); and Annex 1C (the Agreement on Trade-Related Aspects of Intellectual Property Rights). Annex 2 contains the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). It is dedicated to rules governing the dispute settlement system in the WTO. Annex 3 is dedicated to rules governing the Trade Policy Review Mechanism (TPRM) in the WTO. Annex 4 contains the Plurilateral Trade Agreements. Plurilateral Agreements bind only those Members party to the agreement.

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MODEL
General Rules of Interpretation There are six General Rules of Interpretation. Rules one to four are related and must be applied in sequence. Rules five and six stand on their own to be applied as needed .A discussion of the individual rules follows: RULE 1: The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions [that is, GIRs 2 to 6]: Explanation: This is the first Rule to be considered in classifying any product. For practical purposes, this means that the Section and Chapter titles can be used as guidelines to point the way to the area of the Tariff in which the product to be classified is likely to be found. However, articles may be included in or excluded from a Section or Chapter even though the titles might lead one to believe otherwise. Thus in order to classify a product, one must carefully check the Notes associated with any Sections and Chapters under consideration to see if the product is mentioned specifically as being included or excluded. Then it is necessary to go down to the Heading level and find a Heading that is worded in such a way as to include the product in question. Many goods should be correctly classifiable by reference to Rule 1 alone. If the results of this process are ambiguous, then Rule 2 should be applied.

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RULE 2:
(a)

(b)

Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented; the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled. Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

Explanation: Rule 2 (a) deals with the classification of unfinished, incomplete, unassembled or disassembled goods. Unfinished and incomplete goods can be classified under the same Heading as the same goods in a finished state provided that they have the essential character of the complete or finished article. As well, unassembled or disassembled goods may also be classified the same as the complete finished product. This rule does not apply if the text of the Heading or the relevant Legal Notes excludes the unfinished or unassembled product in question. Example: An automobile missing only its wheels would be classified the same as if it were complete.
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Explanation: Rule 2 (b) lays the groundwork for dealing with products, not classifiable through the use of Rule 1 or Rule 2 (a), which are composed of a mixture of materials or substances. It basically states that a Heading referring to a given material or substance includes mixtures of that substance with others. Similarly, a reference to a product composed of a given material or substance includes products composed either wholly or partly of the material or substance. This means that a mixed product may seem to be eligible for classification under two or more Headings. However, a given product can legally only be classified under one Heading. Rule 3 must be used to decide between alternate Headings. RULE 3: When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

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(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

Explanation: Rule 3 (a) states that where 2 or more Headings seem to apply, the one which provides the most specific description of the product in question should be used. This means that a Heading which names the actual product should be used in preference to one which only names a category to which the product could belong. Similarly, a Heading that describes the whole product should be used in preference to one which describes part of it. However, where two Headings both only describe part of the product, this rule cannot be used to tell which one to use even if one seems more specific or detailed than the other. Example: Mint tea is not stated specifically, as a product, in the Tariff. Although the product descriptions available are mint and tea, the importer must classify mint tea under the appropriate tea Heading because it provides the most specific product description and mint is only the flavor of the tea.

Explanation: Rule 3 (b) applies to mixtures, composite goods and sets that cannot be classified by use of the previous Rules. These should be classified as if they consisted of the material or component which gives them their essential character. Example: An importer bringing in "liquor gift sets" (that include the bottle of liquor and glasses) must classify the goods under the appropriate liquor Heading. The essential character of the item is the liquor itself and not the glasses contained within the set.
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Explanation:Rule 3 (c) is for use in cases in which a good seems to fit in more than one Heading and the essential character cannot be determined. In this case, the product should be classified under the Heading which occurs last in numerical order.

Example: A gift set which includes socks (Heading number 6115) and ties (Heading number 6117) cannot be classified by the previous rule since neither item gives the gift set its essential character. The gift set must be classified under the Heading number for ties which is the Heading that occurs last in numerical order. RULE 4: Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin. Explanation: This is a "last resort" rule, most often used with new products RULE 5: In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;
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(b) Subject to the provisions of Rule 5 (a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use.

Explanation: Rule 5 specifies how to classify containers. Rule 5 (a) deals with containers which: are shaped or fitted for the article they will contain, are suitable for long-term use, protect the article when not in use, are of a kind normally sold with such articles, are presented with the articles they are designed to contain. Containers which have these characteristics can be classified with the products which they contain. However, in cases where the container gives the product its essential character, it would be the container which would have to be classified. Example: Rule 5 (a) would apply to flute cases because flutes are normally sold with their cases (due to their specific shape) and are intended for long term use. Explanation: Rule 5 (b) deals with other types of containers and packing materials. These should be classified with the goods they contain if they are of a kind normally used for packing such goods and are not suitable for repetitive use.
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Example: An importer bringing in goods and using Styrofoam chips for padding fits well into Rule 5 (b). Styrofoam chips are normally used for the padding and insulation of many goods; however they are rarely reused and are therefore classified with the goods when they enter Canada.

RULE 6: For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purpose of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.

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CHAPTER III RESEARCH METHODOLGY

Research objectives :
(1) To study the details of HS code (2) To study the different Chapters and Section of HS code (3) To study and find out what HS code can be given to L&T, Heavy Engineering products.

Sources of Data:

Secondary Data: The study is based on the secondary data including, different websites Type of Research Explanatory Research

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RECOMMENDATION
LARSEN & TOUBRO LIMITED,HEAVY ENGINEERING

The engineering products that LARSEN&TOUBRO LIMITED, HEAVYENGINERRING manufactures and supply are covered in Section XVI which is MACHINERY & MECHANICALY APPLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS ANDREPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES AND CHAPTER 84 Nuclear Reactors, Boilers, Machinery and Mechanical appliances; parts thereof

NOTES-FOLLOWING ARE NOTES OF THE ABOVE CHAPTER GIVEN BY DGFT IN 2012 This chapter does not cover; (a) Milestones, grindstones or other articles of chapter 68 ; (b) Machinery or appliances (for example pumps) of ceramic material and ceramic parts of machinery or appliances of any material (chapter 69) (c) Laboratory glassware (HEADING 7017); machinery ,appliance or other article for technical use or parts thereof ,of glass (HEADING 7019 or 7020)
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(d)Articles of heading 7321 or 7322 or similar articles of other base metals (Chapter 74 to 76 or 78 to 81) (e) Vacuum cleaners of heading 8508 (f) Electromechanical domestic appliances of heading 8509 ;digital cameras of heading 8525;or (g) Hand operated mechanical floor sweepers; not motorized(heading 9603)

Subject to the operation of note 3 to Section XVI ,and subject to note 9 to this Chapter , a machine or appliance which answers to a description in one or more of the heading 8401 to 8424,or heading 8486 and at the same time to a description in one or other of the heading 8425 to 8480, is to be classified under the appropriate heading of the heading 8401 to 8424 or under heading 8486,as the case may be and not under the heading to 8425 to 8480.

Heading 8419 does not, however, cover. (a) Germination plants, incubators or brooders (heading 8436) (b) Grain dampening machines (HEADING 8437) (c) Defusing apparatus for sugar juice extradition (heading 8438) (d)Machinery for heat treatment of textile yarns, fabrics or made up textile articles (heading 8451) (e) Machinery or plant ,designed for mechanical operation in which a change of temperature ,even if necessary is subsidiary Heading 8422 does not cover (a) Sewing machines for closing bags or similar containers(heading 8452) (b) Office machinery of heading 8472 .Heading 8424 does not cover ink jet printing machines
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A machine tool for working any material which answers to a description in heading 8456 and at the same time to a description in heading 8457,8458,8459,8460,8461,8464 or 8465 is to be classified in heading 8456 . Heading 8457 applies to only machine tools for working metal, other than lathes which can carry ot different types of machining operations either (a) By automatic tool change from a magazine or the like is conformity with a machining program (b) By the automatic use ,simultaneously or sequentially ,of different unit heads working on a fixed position work piece (c) By the automatic transfer of work piece to different unit heads

For the purpose of heading 8471,the expression automatic data processing machine means machine capable of (a) Storing the processing programs and attest the data immediately necessary for the execution of program (b) Being freely programmed in accordance with the requirement of user (c) Performing arithmetical computation specified by the user (d)Executing without human intervention, a processing program which requires them to modify their execution by logical decision during the processing run. Automatic data processing machines may be in the form of systems consisting of variable number of separate units Subject to paragraph 4 and 5 a unit is to be regarded as being a part of an automatic data processing system if it meets all the following machines (a) It is of a kind solely or principally used in automatic data process system
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(b) It is connectible to the central processing unit either directly or through one or more other units (c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system. Separately presented units of an automatic data processing machines are to be classified in the heading 8471.However, keyboards X-Y coordinate input devices and disk storage units which satisfy the condition of (b) and (c) are in all cases to be classified as units of heading 8471.

Heading 8471 does not cover the following when presented separately even if they meet all the condition set forth in the paragraph (a) Printers ,coping machines ,facsimile machines, whether or not combined (b) Apparatus for the transmission or reception of voice ,images or other data ,including apparatus for communication in a wired or wireless network such as wide or local area network. (c) Loudspeakers or microphones (d)Television cameras ,digital cameras and video camera recorder (e) Monitors and projectors, not incorporating television reception apparatus.

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 Machine incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the heading appropriate to the respective function or falling that in residual headings. Heading 8482 applies,interalia to polished steel balls the maximum and minimum diameters of which do not differ from nominal diameter by more than 1 percent or by more than 0.05 m, whichever is less .Other steel balls are to be classified in the heading as 7326. A machine which is used for more than 1 purpose is for the purposes of classification to be treated as if its principal purpose were its sole purpose. Subject to Note 2 to this chapter and note 3 to section XVI ,a machine ,the principal purpose of which is not described in any heading for which no one purpose is the principal purpose is, unless the context otherwise requires to be classified in heading 8479. Heading 8479 also covers machine for making rope or cable. For the purpose of heading 8470 the term pocket size applies to machine the dimension of which not exceed 170 mm*100mm*45mm (I) Clause (a) and (b) of note 8 to chapter 85 shall also apply respectively to the expressions semiconductor devices and electronic integrated circuits used in this note and in the heading 8486.However for the purpose of this Note and heading 8486 ,the expression semiconductor devices also covers photo sensitive semiconductor device and light emitting diodes . (2) For the purpose of this note and heading 8486 the expression manufacture of flat panel display covers the fabrication of substrates into a flat panel. it does not cover the manufacture of glass or assembly of the printed circuit boards or other electronic components onto the flat panel .The expression flat panel display does not cover cathode ray tube technology.

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 (3) Heading 8486 also includes machine and apparatus solely or principally of a kind used for The manufacture of repair of mask and reticles ; Assembling semiconductor devices or electronic integrated circuits and Lifting, handling, loading or unloading of boules. wafers ,semiconductor devices ,electronic integrated circuits and flat panel displays Subject to Note 1 to Section XVI and note 1 to chapter 84, machine and apparatus answering to the description in heading 8486 are to be classified in that heading and in no other heading of this schedule.

SUBHEADING NOTES (1) For the purpose of the subheading 8471 49,the term system means automatic data processing machine whose unit satisfy the condition laid down in note 5 (c) to chapter 84 and which comprise at least a central processing unit ,one input unit (for example a keyboard or scanner) and one output unit (for example a visual display unit or a printer ) (2) Subheading 8482 40 applies only to bearings with cylindrical rollers of a uniform diameter not exceeding 5 mm and having a length which is at least three times the diameter .The ends of the roller may be rounded.

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CHAPTER IV INTERPRETATION & ANALYSIS

After going through various different companys data It would be recommended that following HS codes for the products manufactured by LARSEN & TOUBRO LIMITED, HEAVY ENGINEERING

ITEMS WASTE HEAT BOILER PACKAGE

HS CODE

84021990

Parts of Waste heat boiler such as Piping, Tube Bundle, Structural ladders, etc Water Cooled Steam Surface Condenser High Pressure/Low Pressure Feed Water Heater Heat Exchanger:Shell & Tube type(The products of L&T,HE falling in this category are Screw Plug Closure exchanger, Ammonia Synthesis Loop Exchanger, Carbamate Condenser ,HP Heat Exchanger, etc) Pressure Vessels, Reactors, Columns or Towers or Chemical Storage Tanks (The products of L&T,HE falling in this category are Ammonia Converter, Urea Reactor, Vacuum/Crude Column, FCC Reactor Three Phase Separator, Stainless Steel & Carbon Steel Clad Column) Spares, Accessories & Parts of Reactors ,Pressure Vessels etc 84029090 84042000 84041000 84195010

84198910

84199090

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Following tables provide the basis on which classification of HE products is done

CODE 84198910

MEANING 84-Nuclear Reactors, Boilers, Machinery and Mechanical appliances and parts thereof. 8419-Machinery ,plant or laboratory equipment, whether or not electrically heated(excluding Furnances, Ovens and other equipments of heading 8514),for the treatment of materials by a process involving a change of temperature, as Heating, Cooking,Roasting,Distillig,Rectifying, Sterlising, Pasturising, Steaming, Drying, Evaporating, Vaporizing, Condensing or Cooling other than Machinery or plant of a kind used for domestic purpose, Instantaneous or Storage water heaters, non electric 841989-Other 84198910-Pressure Vessels, Reactors, Colums or towers or chemical storage tanks

CODE 84195010

MEANING 84-Nuclear Reactors, Boilers, Machinery and mechanical appliances , Parts thereof 8419-Machinery,plant or laboratory equipment, whether or not electrically heated (excluding Furnances ,Ovens , and other equipments of heading 8514) for the treatment of materials by a process involving a change of temperature such as Heating , Cooking , Roasting , Distilling , Rectyfifying, Sterilising ,pasteurizing ,steaming ,drying ,evaporating vaporizing , condensing or cooling other than machinery or plant of a kind used for domestic purpose; instantaneous or storage water heaters , non electric 841950-Heat exchange units 84105010-Shell and tube type

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CODE 84021990

MEANING 84-Nuclear Reactors,Boilers,Machinery and mechanical appliances , Parts thereof 8402-Steam or other Vapour Generating boilers(other than central heating hot water boiler capable also of producing low pressure steam) superheated water boilers 840219-Other Vapour generating boilers, including hybrid boilers 84021990-Other

CODE 84029090

MEANING 84-Nuclear Reactors, Boilers, Machinery and Mechanical appliances , parts thereof 8402-Steam or other Vapor generating Boilers(other than Central heating hot water Boiler capable also of producing low pressure steam) Superheated Water Boilers 840290-Parts 84029090-Other

CODE 84041000

MEANING 84-Nuclear Reactors, Boilers, Machinery and mechanical appliances , parts thereof 8404-Auxiliary plants for use with Boilers of heading 8402 or 8403(for example economizers, Super heaters, Soot removers, Gas recovers);Condensers for steam or other Vapor power units 84041000-Auxiliary plants for use with boilers of heading 8402 or 8403

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CODE 84042000

MEANING 84-Nuclear Reactors, Boilers, Machinery and Mechanical appliances , parts thereof 8404-Auxiliary plants for use with Boilers of heading 8402 or 8403(for example Economisers, Super heaters, Soot removers, Gas recovers);condensers for steam or other Vapor power units 84042000-Condensers for stem or other Vapor units

CODE 84199090

MEANING 84-Nuclear Reactors, Boilers, Machinery and Mechanical appliances ,parts thereof 8419-Machinery,plant or Laboratory equipment, whether or not electrically heated (excluding Furnances ,Ovens , and other equipments of heading 8514) for the treatment of materials by a process involving a change of temperature such as Heating , Cooking , Roasting , Distilling , Rectyfifying, Sterilising , Pasteurising ,steaming ,drying ,evaporating vaporizing , condensing or cooling other than machinery or plant of a kind used for domestic purpose; Instantaneous or storage Water Heater 841990-Parts 84199090-Other

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LIMITATIONS OF STUDY

The Harmonized System Code can be use for only for international code so as to determine the tax liability & it will not use in domestic trade. The time duration for the study was short.

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CONCLUSION
Importers and Exporters are legally required to declare their product to customs by the means of HS Code .HS classification determines the products rate of duty, its import and export admissibility and whether or not it should be physically examined. From the above project Role of Harmonic System Code we can conclude that HS Code play a very important role in the International trade. Harmonic System Code is required when the product is imported from or exported to another country. So we can say that HS code is required for International Business. From products HS Code we can come to know its contribution towards a countries import or export.

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BIBILIOGRAPHY

http://www.eximguru.com http://en.wikipedia.org/wiki/Harmonized_System http://www.dgft.org http:// www.wto.org

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