Once the liability to pay duty is established, the amount of duty is to be determined. Since there are thousands of different goods, it is not possible to prescribe rates of duty for each good. Therefore all goods are classified into groups and sub-groups for the purpose of levy of duty. For each sub-group, a specific rate of duty has been prescribed. This is known as "Classification of Goods" i.e. determination of heading or sub-heading under which a particular good is covered. The classification is as per the Customs Tariff Act, 1975 and is based on the Harmonized System of Nomenclature (HSN) which is internationally followed.