TYPES OF CUSTOMS DUTIES IN INDIA:
While Customs Duties include both Import and Export duties, but as Export duties contributed only nominal revenue,
due to emphasis on raising competitiveness of exports,
Import duties alone constituted major part of the revenue from Customs Duties and include the following:
Basic Customs Duty:
All goods imported into India are chargeable to a duty under Customs Act, 1962 .The rates of this duty,
popularly known as basic customs duty, are indicated in the First Schedule of the Customs Tariff Act,
1975 as amended from time to time under Finance Acts. The duty may be a percentage of the value of the goods or at a specific rate.
The Central Government has the power to reduce or exempt any good from these duties.
Additional (Countervailing) Duty of Customs:
This countervailing duty is livable as additional duty on goods imported into the country and the rate structure of this
duty is equal to the excise duty on like articles produced in India. The base of this additional duty is CIF value of imports
plus the duty levied earlier. If the rate of this duty is on ad-valorem basis, the value for this purpose will be the total of the value
of the imported article and the customs duty on it (both basic and auxiliary).
Under Customs Act, 1962, goods exported from India are chargeable to export duty The items on which export duty is chargeable and
the rate at which the duty is levied are given in the customs tariff act,1975 as amended from time to time under Finance Acts.
However, the Government has emergency powers to change the duty rates and levy fresh export duty depending on the circumstances.
Auxiliary Duty of Customs:
This duty is levied under the Finance Act and is leviable all goods imported into the country at the rate of 50 per cent of their value.
However this statutory rate has been reduced in the case of certain types of goods into different slab rates based on the basic duty
chargeable on them.
Cesses are leviable on some specified articles of exports like coffee, coir, lac, mica, tobacco (unmanufactured),
marine products cashew kernels, black pepper, cardamom, iron ore, oil cakes and meals, animal feed and turmeric.
These cesses are collected as parts of Customs Duties and are then passed on to the agencies in charge of the
administration of the concerned commodities.
Education cess on customs duty:
An education cess has been imposed on imported goods w.e.f. 9-7-2004. The cess will be 2% and wef 01.03.2007 2%+1% of the aggregate duty
of customs excluding safeguard duty, countervailing duty, Anti Dumping Duty.
Tariff Commission has been established under Tariff Commission Act, 1951. If the Tariff Commission recommends and Central Government is
satisfied that immediate action is necessary to protect interests of Indian industry, protective customs duty at the rate recommended may be
imposed under section 6 of Customs Tariff Act. The protective duty will be valid till the date prescribed in the notification.
Countervailing Duty on Subsidized goods:
If a country pays any subsidy (directly or indirectly) to its exporters for exporting goods to India, Central Government can impose
Countervailing duty up to the amount of such subsidy under section 9 of Customs Tariff Act.
Anti Dumping Duty on dumped articles:
Often, large manufacturer from abroad may export goods at very low prices compared to prices in his domestic market.
Such dumping may be with intention to cripple domestic industry or to dispose of their excess stock. This is called 'dumping'.
In order to avoid such dumping, Central Government can impose, under section 9A of Customs Tariff Act, anti-dumping duty up to margin of
dumping on such articles, if the goods are being sold at less than its normal value. Levy of such anti-dumping duty is permissible as per WTO
agreement. Anti dumping action can be taken only when there is an Indian industry producing 'like articles'.
Central Government is empowered to impose 'safeguard duty' on specified imported goods if Central Government is satisfied that the goods are
being imported in large quantities and under such conditions that they are causing or threatening to cause serious injury to domestic industry.
Such duty is permissible under WTO agreement. Safeguard duty is a step in providing a need-based protection to domestic industry for a limited period,
with ultimate objective of restoring free and fair competition.
National Calamity Contingent Duty:
A National Calamity Contingent Duty (NCCD) of customs has been imposed vide section 129 of Finance Act, 2001.
This duty is imposed on pan masala, chewing tobacco and cigarettes. It varies from 10% to 45%. - - NCCD of customs of 1% was imposed on PFY,
motor cars, multi utility vehicles and two wheelers and NCCD of Rs 50 per ton was imposed on domestic crude oil, vide section 134 of Finance Act,
2003. 20.3.5 Rate of duty applicable There are different rates of duty for different goods there are different rates of duty for goods imported
from certain countries in terms of bilateral or other agreement with such countries which are called preferential rate of duties the duty may be
percentage of the value of the goods or at specified rate.
India Free Foreign Trade Agreement