UNIT 2
CUSTOMS DUTIES
Levy of, and exemption from, Customs duties
Customs duty refers to the tax imposed on goods when they are transported across
international borders. In simple terms, it is the tax that is levied on the import and
export of goods. The government uses this duty to raise its revenues, safeguard
domestic industries, and regulate the movement ofgoods.
Types of custom duty
Basic Customs Duty(BCD)
Countervailing Duty(CVD)
Additional Customs Duty or Special CVD.
Protective Duty,
Anti-dumping Duty.
1. Basic Customs Duty
Basic customs duty is the duty imposed on the value of the goods at a specific rate.
The Central Government has the right to exempt any goods from the tax.
2. Countervailing Duty (CVD)
This duty is imposed by the Central Government when a country pays the subsidy to
the exporters exporting goods to India. This amount of duty is equivalent to the
subsidy paid by them. This duty is applicable under Sec 9 of the Customs Tariff Act.
3. Additional Customs Duty or Special CVD
To equalizes imports with local taxes like service tax, VAT, and other domestic taxes
which are imposed from time to time, a special countervailing duty is imposed on
imported goods. Hence, is imposed to bring imports on an equal track with the
goods produced or manufactured in India. This is to promote fair trade &
competition practices in our country.
4. Safeguard Duty
Toto makes sure that no harm is caused to the domestic industries of India, and
safeguard duty is imposed to safeguard the interest of our local domestic industries.
It is calculated based on the loss suffered by our local industries.
5. Anti-Dumping Duty
Often, large manufacturers from abroad may export goods at very low prices
compared to prices in the domestic market. Such dumping may be intended to
cripple domestic industry or dispose of their excess stock. This is called ‘dumping’.
To avoid such dumping, Central Government can impose, under section 9A of the
Customs Tariff Act, anti-dumping duty up to the margin of dumping on such articles,
if the goods are being sold at less than their normal value
6. Protective Duties
If the Tariff Commission recommends and Central Government is satisfied that
immediate action is necessary to protect the interests of Indian industry, a
protective customs duty at the rate recommended may be imposed under section 6
of the Customs Tariff Act. The protective duty will be valid till the date prescribed in
the notification.
SECTION 12. Dutiable goods.
Duties of customs shall be levied at such rates as may be specified under the
Customs Tariff Act, 1975, or any other law for the time being in force, on goods
imported into, or exported from, India.
Duties must be paid on goods shipped with household articles to the country, if the
articles cannot be considered a part of the actual household inventory.
These goods can be, for example:
Objects and equipment for commercial use.
Vehicles that are subject to registration, motorised vehicles and other
vehicles for sailing or flight.
Objects usually fixed to the walls or floor of people's residences, e.g. fixtures
and wood flooring.
Food and beverages, including alcohol and tobacco.
SECTION 13. Duty on pilfered goods. - If any imported goods are pilfered after the
unloading thereof and before the proper officer has made an order for
clearance for home consumption or deposit in a warehouse, the importer shall not
be liable to pay the duty leviable on such goods except where such goods are
restored to the importer after pilferage.
INTEREST ON DELAYED FUNDS
(1) If you have to pay customs duty as per Section 28 of the Customs Act, 1962, and
you pay it late, you will also have to pay interest. This is true no matter what any
court, tribunal, or authority says, or what any other law or rule says. You have to
pay this interest whether you pay the duty on your own or after the duty amount is
officially worked out.
(2) The interest rate will be set by the government and will be between 10% and
36% per year. The government will announce the rate in the Official Gazette. If you
have to pay duty as per Section 28, you must also pay this interest.
SECTION 27. Claim for refund of duty.
Any person claiming a refund of any duty or interest,-paid by him; or borne by
him,may make an application in such form and manner as may be prescribed for
such refund to the Assistant Commissioner of Customs, before the expiry of one
year, from the date of payment of such duty or interest:
Section 28 B(A).
Provisional attachment to protect revenue in certain cases. –
(1) Where, the proper officer thinks that to protect the interests of revenue, he
may, with the previous approval of the Commissioner of Customs, by order in
writing, attach provisionally any property belonging to the person on whom notice
is served.
(2)Every such provisional attachment shall cease to have effect after the expiry of a
period of six months from the date of the order:
INDICATING THE AMOUNT OF DUTY IN THE PRICE OF GOODS, ETC. FOR PURPOSE
OF REFUND
Price of goods to indicate the amount of duty paid thereon. SECTION 28C. -
Every person who is liable to pay duty on any goods shall, at the time of clearance
of the goods, prominently indicate in all the documents relating to assessment,
sales invoice, and other like documents, the amount of such duty which will form
part of the price.
