Section 2 — Duties specified in the Schedules to be levied

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Connects the Customs Act charging provision to the First Schedule for import tariff and the Second Schedule for export tariff. It tells the practitioner where the statutory tariff rate lives; the effective rate may still be lower or otherwise modified by exemption, preference or other legislation.

Statutory position and legal effect

For Section 2, the legal answer should be built in layers. First identify what the section itself does; second identify the Schedule, notification, rule or investigation record that activates it for the goods and date; third reconcile that result with the Customs Act assessment machinery. This avoids a frequent customs error: treating a statutory power, a tariff rate and an effective rate as if they were the same thing.

The material date matters because tariff lines, exemptions, origin rules and trade-remedy measures change independently. A defensible file should therefore retain the exact tariff extract and notification version used in the assessment. Where this page is marked historical or transitional, the section should be cited only for a period when it legally operated or for explaining the transition to the current framework.

From an evidence perspective, the strongest working paper is not a screenshot of a duty calculator. It is a reconciliation showing the declared tariff item, legal notes considered, statutory rate, effective notification serial, preference/origin basis, additional levies, trade-remedy measure if any, and the arithmetic from customs value to final duty. Section 2 should occupy its correct place in that chain.

Official text control: use the India Code/Gazette version of Section 2 and the Schedule or delegated instrument applicable on the transaction date. This page intentionally explains the law rather than reproducing a long unofficial bare-act extract.

Applicability, rights, obligations and decision workflow

1. Step 1. Identify the correct tariff item under the First Schedule/Second Schedule.
2. Step 2. Capture the statutory rate shown against that item.
3. Step 3. Check whether a valid exemption notification reduces the effective BCD.
4. Step 4. Check preferential origin and Section 28DA/CAROTAR if a trade agreement is claimed.
5. Step 5. Add Section 3 taxes/cesses and trade-remedy duties separately where applicable.

Section 2 does not itself classify goods. Classification is done through the First Schedule heading/subheading/tariff item, Section and Chapter Notes and the GRIs. The statutory tariff rate must then be reconciled with the effective exemption notification, trade-agreement rate and separate duty components.

Thresholds, provisos, timelines and interaction with other law

The section must be read with the Customs Act, the tariff Schedules and any subordinate instrument that gives it transaction-level effect. Where the provision contains a power rather than a self-executing charge, no duty or obligation should be assumed without locating the notification, rule, agreement or investigation determination that activates the power. Historical provisions require the same material-date discipline.

Rate changes, classification changes and trade-remedy measures are different legal events. The file should say exactly which one occurred and should not infer the enabling provision merely from the fact that the landed duty increased or decreased.

Rules, notifications, Finance Acts and operational instruments

Case law — provision-specific research matrix

Worked example

A tariff item carries a 20% statutory BCD but a live exemption notification reduces BCD to 10% subject to end-use conditions. Section 2 supplies the Schedule rate; the payable rate depends on satisfying the exemption conditions.

Professional result: document the legal route before doing the arithmetic. A short computation that identifies the correct provision and current notification is stronger than a long calculation based on an obsolete tariff or historical measure.

Evidence and compliance checklist

• Material date and customs event.
• Exact 8-digit tariff item and candidate headings considered.
• Relevant Section/Chapter/Subheading Notes and GRI reasoning.
• Statutory Schedule rate and effective exemption/preference rate.
• Current notification/rule/Finance Act extract with effective date.
• Section 3 additional levies and separate trade-remedy duty, if any.
• Origin/FTA support where a preferential rate is claimed.
• Assessment/order and calculation reconciliation retained with source links.

Common mistakes and professional traps

• Calling an exemption rate the “tariff rate”
• Reading only a 4-digit heading instead of the 8-digit item
• Forgetting export-duty entries in the Second Schedule
• Netting anti-dumping or IGST into BCD
• Using an old manual or judgment for a current tariff rate without checking later amendments.
• Quoting a four-digit HSN heading when the legal outcome turns on an eight-digit tariff item or a national note.

Related provisions and research routes

• Customs Act section 12 — charging provision
• Customs Act section 14 — valuation
• First Schedule / General Rules for Interpretation
• CBIC effective-rate and exemption notifications

FAQs