Indian Custom Duty

By Author: kate Broad
Total Articles: 6
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Custom Duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India. . The Central Board of Excise & Customs (CBEC) is the apex body for matters pertaining to customs. Central Board of Excise and Customs (CBEC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. Custom duties are levied on the goods and at the rates specified in the schedules to the Custom Tariff Act, 1975.
Indian Custom duty is a major source of India’s revenue.

Following types of Indian custom duties are levied in country India:

1-Basic custom duty- Basic custom duty is levied on all goods imported into India as prescribed in First Schedule of customs Tariff act 1975. This Schedule is amended from
time to time.

There are two types of Basic custom duties which can be applied.

A) Ad Valorem – Ad valorem duties are based on value and expressed as a percentage of the Assemble Value (Assessable Value = Cost + Insurance + Freight + 1% landing charges). Majority of Indian Custom Tariff rates are on ad valorem basis.
B) Specific ...
... rate of duty – Specific rate of duty is based on unit in terms of weight, number etc. In Indian Customs Tariff the specific duty is applicable on almond based on its weight (per kg).

2-Countervailing Duty(Additional Duty of Customs ) - This duty is levied on the total cost of imported goods at the rate Equal to excise duty on like goods when manufactured in india.

3-Special Additional duty of customs (Special cvd or SAD)- special additional duty of
Customs are levied for counter balancing domestic taxes like sales tax, value added tax,
local tax or any other charges for the time being levied on a like article on its sale, purchase or transportation in India. There is no education cess applicable on the Special CVD. Vat/sales tax can get refund of Special CVD.

4-Anti-Dumping duty- When the goods are exported by a country to another country at a price lower than its normal value, this is called dumping. This is an unfair trade practice which can have a distortive effect on international trade. Thus, the purpose of anti dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade. The use of anti dumping measure as an instrument of fair competition is permitted by the WTO. It provides relief to the domestic industry against the injury caused by dumping.

5-Export duty- Export duty is levied when goods are exported from a country. In India
There are very few articles like Iron ore (20%), Raw fur lamb skin(10%), Ferrous waste and scrap(15%), Cycle saddle leathers(15%) are subject to export duty.

How to calculate Indian custom duty

Indian custom duty is levied on assessable value (Cost+Insurance+Freight+1% Landing charges of imported goods)

Duty % Amount Total
(A) Assessable Value Rs 10,000
(B) Basic Customs Duty 10 1,000.00 1,000.00
(C) Sub-Total for calculating CVD '(A+B)' 11,000.00
(D) CVD 'C' x excise duty rate 8 880.00 880.00
(E) Education cess of excise - 2% of 'D' 2 17.60 17.60
(F) SAH Education cess of excise - 1% of 'D' 1 8.80 8.80
(G) Sub-total for edu cess on customs 'B+D+E+F' 1,906.40
(H) Edu Cess of Customs - 2% of 'G' 2 38.13 38.13
(I) SAH Education Cess of Customs - 1% of 'G ' 1 19.06 19.06
(J) Sub-total for Spl CVD 'C+D+E+F+H+I' 11,963.59
(K) Special CVD u/s 3(5) - 4% of 'J' 4 478.54 478.54
(L) Total Duty 2,442.13

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