Basic question of custom

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shivam (Querist)
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15 September 2011 dear reader, i am confused about the basic of nature of customs' tax. Books says it is indirect in nature, but after reading i found that we are hereby not shifting the tax burden, as that we do in case of indirect tax like exise or vat. So please help me that, how can we justify saying customs' tax an indirect one?

Hari Beldona

Hari Beldona (Expert)
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15 September 2011 Custom duty is Indirect Tax.
Dealer in imported cars-First dealer pays custom duty on cars and collects from the buyer.
The incidence of tax is not directly on the buyer that means buyer will not pay custom duty to customs department, hence it is called Indirect Tax.

Whereas Income Tax is direct tax, since assessee pays tax directly to the Income Tax Department.

shivam

shivam (Querist)
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16 September 2011 sir thanks..but please clarify me more..that..like in excise duty we seperately show the amount of duty in invoice..but if we see in custom duty we are not showing it seperately in invoice..so how can we say that the amount so collected from buyer is of custom duty..if i am wrong somewhere..then please clarify me..thanks

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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28 November 2011 Customs duty is an indirect tax which is realized on goods of international trade. It is also a kind of consumption tax. Duties levied by the government in relation to imported items is referred to as import duty. In the same way, duties realized on export consignments is called export duty.
Customs duty is imposed on import and export of goods the burden of which is shifted on to the consumer. As and when the goods cross the customs barrier they become the mass of the country and are then locally sold as if the goods are procured or produced in the country itself. This is the reason why customs duty is not seperately shown in the invoice.The amount of the duty is included in the cost of the goods and then they are sold after adding other costs of production or alterations and profits.

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shivam

shivam (Querist)
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12 October 2012 thank you all.. :-)

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