NOTE: (A) “CUSTOMS DUTY†MEANS THE CUSTOMS DUTY LEVIED UNDER THE CUSTOMS ACT 1962. (B) CVD MEANS THE ADDITIONAL DUTY OF CUSTOMS UNDER SECTION 3 OF THE CUSTOMS TARIFF ACT, 1975.
(C) SAD MEANS SPECIAL ADDITIONAL DUTY OF CUSTOMS UNDER SECTION 3A OF THE CUSTOMS TARIFF ACT, 1975.
Types of duties:-
Under the custom laws, the following are the various types of duties which are leviable.
Basic Duty: This is the basic duty levied under the Customs Act. The rate varies for different items from 5% to 40%.
Additional Duty (Countervailing Duty) (CVD): This additional duty is levied under section 3 (1) of the Custom Tariff Act and is equal to excise duty levied on a like product manufactured or produced in India. If a like product is not manufactured or produced in India, the excise duty that would be leviable on that product had it been manufactured or produced in India is the duty payable. If the product is leviable at different rates, the highest rate among those rates is the rate applicable. Such duty is leviable on the value of goods plus basic custom duty payable. eg. If the customs value of goods is Rs. 5000 and rate of basic customs duty is 10% and excise duty on similar goods produced in India is 20%, CVD will be Rs.1100/-.
Additional Duty to compensate duty on inputs used by Indian manufacturers. This Additional Duty is levied under section 3(3) of the Customs Act. It can be charged on all goods by the central government to counter balance excise duty leviable to raw materials, components and other inputs similar to those used in the production of such good.
Anti-dumping Duty: Sometimes, foreign sellers abroad may export into India goods at prices below the amounts charged by them in their domestic markets in order to capture Indian markets to the detriment of Indian industry. This is known as dumping. In order to prevent dumping, the Central Government may levy additional duty equal to the margin of dumping on such articles, if the goods have been sold at less than normal value. Pending determination of margin of dumping, such duty may be provisionally imposed. After the exact rate of dump ing duty is finally determined, the Central government may vary the provisional rate of dumping duty. Dumping duty can be imposed even when goods are imported indirectly or after changing the condition of goods. There are however certain restrictions on imposing dumping duties in case of countries which are signatories to the GATT or on countries given "Most Favoured Nation Status" under agreement. Dumping duty can be levied on imports on such countries only if the Central Government proves that import of such goods in India at such low prices causes material injury to Indian industry.
Protective Duty: If the Tariff Commission set up by law recommends that in order to protect the interests of Indian industry, the Central Government may levy protective anti-dumping duties at the rate recommended on specified goods. The notification for levy of such duties must be introduced in the Parliament in the next session by way of a bill or in the same session if Parliament is in session. If the bill is not passed within six months of introduction in Parliament, the notification ceases to have force but the action already undertaken under the notification remains valid. Such duty will be payable upto the date specified in the notification. Protective duty may be cancelled or varied by notification. Such notification must also be placed before Parliament for approval as above.
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20 July 2024
"Duty of customs" refers to the tax or duty levied on goods when they are imported or exported from a country. It is a financial charge imposed by the government on goods being transported across international borders.
Here are key points about the "duty of customs":
1. **Purpose**: The primary purpose of customs duty is to protect domestic industries from foreign competition by making imported goods more expensive. It also serves as a source of revenue for the government.
2. **Types of Customs Duties**: - **Import Duty**: This is levied on goods imported into a country. It may include basic customs duty (BCD), additional customs duty (commonly known as countervailing duty or CVD, which is equivalent to the excise duty imposed on similar goods manufactured in India), and safeguard duty or anti-dumping duty in certain cases to protect domestic industries from unfair trade practices.
- **Export Duty**: This duty is imposed on goods exported out of a country. It is less common compared to import duties and is often used to regulate the export of specific goods or to raise revenue.
3. **Calculation**: Customs duty rates vary depending on the nature of the goods, their classification under the Harmonized System of Nomenclature (HSN) or Harmonized Tariff Schedule (HTS), their country of origin, and any trade agreements or exemptions that may apply.
4. **Payment and Collection**: Customs duties are typically collected by customs authorities at the point of entry or exit (ports, airports, etc.) of the goods. Importers or exporters are responsible for paying these duties, and they must comply with customs regulations, including providing accurate documentation and declarations related to the goods.
5. **Legal Framework**: Each country has its own customs laws, regulations, and procedures governing the assessment, collection, and enforcement of customs duties. These laws are designed to ensure compliance with international trade agreements and domestic economic policies.
In summary, "duty of customs" refers to the taxes or charges levied by governments on goods imported into or exported out of a country. It serves economic and regulatory purposes, aiming to protect domestic industries, regulate trade, and generate revenue for the government.
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