Custom duty Vs CVD



What is basic difference b/w Custom Duty Vs CVD???

Taxation, Pursuing CA

Customs Duty Levied on Basic value of Imports,   and CVD Leivied on  BASIC VALUE+CUSTOMS.




Thanks for reply.


I want to know difference between custom duty Vs CVD???

It is mostly 10.30 % sometimes 5.15% Why???


CVD is levied in lieu of Cenvat or Central Excise.

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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/-.

The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods. Besides, all imports are sought to be subject to a duty with a view to affording protection to indigenous industries as well as to keep the imports to the minimum in the interests of securing the exchange rate of Indian currency.

Duties of customs are levied on goods imported or exported from India at the rate specified under the customs Tariff Act, 1975 as amended from time to time or any other law for the time being in force. For the purpose of exercising proper surveillance over imports and exports, the Central Government has the power to notify the ports and airports for the unloading of the imported goods and loading of the exported goods, the places for clearance of goods imported or to be exported, the routes by which above goods may pass by land or inland water into or out of Indian and the ports which alone shall be coastal ports.

In order to give a broad guide as to classification of goods for the purpose of duty liability, the central Board of Excises Customs (CBEC) bring out periodically a book called the "Indian Customs Tariff Guide" which contains various tariff rulings issued by the CBEC. The Act also contains detailed provisions for warehousing of the imported goods and manufacture of goods is also possible in the warehouses.

For a person who do not actually import or export goods customs has relevance in so far as they bring any baggage from abroad.


for more info:-



Countervailing duty (CVD) is an additional customes duty equal to CENVAT leivable on goods produced or manufacture in India. This is leviable under Section 3(3) of the CTA, 1975.

Special Additional Duty is duty levied under Section 3(5) if the CTA 1975. This is levy in order counter balance various internal taxes like Sales Tax, VAT, etc.

Conclusively you can understand that CVD levy in respect of Excise duty and special addition additional duty in respect of Sales Tax or VAT.

CA (Ahmedabad Bhilwara Chittorgarh)


you can understand that CVD levy in respect of Excise duty and special addition additional duty in respect of Sales Tax or VAT.

sales executive


       We are a trading company. we are not an exciseable unit.

Then from both CVD and additional cvd, which duty can be levied and how??


If a product is manufactured in India, excise duty is paid on such product. If a product is sold in India, VAT is paid on such product. While importing same goods from foreign country, custom duty is paid but the local market is affected by the imported goods because excise duty and VAT forms part of the price of sold product so price is higher than the imported goods becuase of taxes. To avoid the problem, Government introduced CVD. When a product is imported, Custom duty is paid and CVD is also paid to avoid the hike in price of domestic products due to excise and VAT. CVD is two type. One is Basic Excise Duty(BED, instead of excise duty) and another one is Additional duty(AD, instead of VAT). Manufacture concern which  imports input material from foreign country can avail CENVAT Credit of CVD while paying excise duty after manfacture.


The CVD stand for Countervaling Duty is introduced for the protection of domestic manufactures. It is a type of Anti dumping duty charging. The BCD (Basic Customs Duty) is calculated on product assessable value. because sometimes the customs make assessment on the billed product and impose more rate than the commercial invoice. But the CVD is calculated on Product MRP or BCD. BCD = Product Rate* Product Qty*Exchange Rate+1% (landing cost).

CVD = MRP*Abaitment*Product qty or Assessable Value+ BCD




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