- Customs duties on internationally traded goods are chargeable on the act of importation or on some goods; customs duties are also charged on the act of exportation.
- The goods that enter international trade are many and are charged at different rates of customs duty as per national or economic union’s interest.
- Goods which enter the international trade are grouped into exclusive similar categories / class of goods [e.g., natural goods, chemicals, metals, textiles, machinery, etc.] and enumerated on the basis of well-defined criteria.
- The subdivision and enumeration of all goods entering international trade along with well-defined world rules of interpretation, form what is normally termed as the nomenclature of goods.
- In countries, governments utilize the nomenclature as the basis for prescribing appropriate duty on goods imported / to be exported. The combination of goods nomenclature with duty rates is called Customs Tariff.