The government on Wednesday approved a Bill for the introduction of an 8-digit classification code for Central Excise with a view to eliminate problems due to divergence of different classification and to facilitate electronic data processing.

The Central Excise Tariff (Amendments) Bill, 2004, to be introduced during the forthcoming session of Parliament, is to have a common harmonised system of nomenclature based 8-digit classification code for Central Excise.

This will be in line with the existing 8-digit classification code for Customs and Exim Policy and for statistical purposes, an official spokesperson told reporters in New Delhi after a Cabinet meeting.

Outlining the objectives of the bill, an official release said one of purposes is to have a common classification code for both Customs and Central Excise in alignment with the code followed by Directorate General of Foreign Trade and Directorate General of Customs and Intelligence (DGICS).

Such an Act will also enable collecting more specific data on commodities of special significance like spices, sarees and dhotis and sharing them with other government agencies.

At present, manufacturers, exporters/importers have to follow different codes for Central Excise duty and those for Countervailing Duties for import and drawback for exports.

The Bill also proposes to incorporate standard units of measurement and these would be taken from internationally accepted units.

Accounting by reference to stand unit will also enable declaration of easily verifiable values, the release said, adding that at present no standard units of measurement are prescribed in the central tariff.

Consequently, the data relating to individual commodities cannot be cohesively collected with reference to a standard unit.

Giving an example, it says woven fabrics falling under a particular heading attracting ad-valorem rates are differential accounted for with reference to weight, takas/bundles, length, square meter, et cetera.

In the new dispensation, standard unit for the item will be square meter and therefore, it will be easier to collect the requisite data for various agencies more precisely which may also be frequently needed for policy formulations.

The 8-digit classification code for Central Excise also reduces classification disputes, the release added.