There are various taxes levied by the government, amongst them, Customs duty is levied on goods importing India, as well as on goods which are exported from India. It is an indirect tax. All the countries levied taxes on goods imported or exported. It helps the Government to raise revenue and at the same time protect the domestic institutions from predators. The taxes on import goods is termed as custom import or custom duty imports whereas taxes on export goods is known as the export duty or custom duty exports. The duties on custom are levied based on the value of goods, weights, dimensions and other relevant criteria.
Under Customs Act, 1962, the Customs Duty in India is authorised to levy tax on export and import goods by the Government of India. They can also prohibit the import or export of goods and can impose penalty if anyone overrules the customs procedures. The Central Board of Excise and Customs (CBEC), under Department of Revenue of the Ministry of Finance, handles all the matters rellated to customs duty and duties on customes. It is an agency in India responsible for customs, Central Excise, service tax and Narcotics in India.
Under Section 2(22), goods includes the following:
Basics customs duty: Basic customs duty is a duty which is imposed on the goods importing India. It may be at the standard rate or at the preferential rate. All goods importing India are chargeable to Basic Customs Duty under the Customs Act, 1962, and they are known as customs import. The rates of this duty are indicated in the first schedule of the Customs Tariff Act, 1975.
Countervailing duty (CVD): A duty equivalent to the amount of subsidy granted by the government is imposed on such subsidized good which is known as countervailing duty. These duties are also known as anti-subsidy duties. They are imposed to neutralize the negative effect of subsidies, as goods can be imported and exported at a price lower than the original price based on the subsidy given by the government.
Additional customs duty: Additional customs duty is a duty which is levied on goods produced or manufactured in India. It’s a subset of countervailing duty and is imposed on imported goods in order to equalize imports with local taxes like service tax, VAT. This duty is leviable on the assessable value + basic customs duty. Generally, the CVD rate is 16%.
Safeguard duty: It’s a duty which is imposed to safeguard the interest of the local domestic industries so that no harm or loss is faced by the domestic producers and their productivity. It is calculated on the basis of loss suffered by the local industries.
Anti Dumping Duty: It’s a duty which occurs when a manufacturer exports a product to another country at a price rate either below the price rate in his/her home market or below its cost of production. The Purpose of this duty is to increase the foreign share or sometimes to expose off their excess stock. In order to avoid such dumping, the Central government imposes an anti-dumping duty under section 9A of the Customs Tariff Act, 1975, if goods are sold at a value less than the normal value.
Education Cess: This duty is levied at a rate of 2% for secondary Cess and 1% for higher education cess. No cess would be levied, if the goods are fully exempted from duty or are cleared without payment of duty under the prescribed procedure.
National calamity contingent duty: National calamity contingent duty is a duty which is imposed on goods like tobacco, pan masala or any other good which is injurious to health. The rate of tax under this duty varies from 10% to 45% and different rates are applicable to different situations.
Protective duties: It is a tariff which is formulated with the aim of protecting domestic industries or domestic producers. Protective custom duty can be imposed at the rate recommended u/s 6 of the Customs Tariff Act. It is valid till the date prescribed in the notification.
The objectives of Customs Duty in India are as follows:
An individual can calculate customs duty with the help of customs duty calculator on ICEGATE Portal. For that, you must know the CTH code of the good which you are planning to import. The CTH code can be as minimum as 2 digits or as maximum as 8 digits. After filing the column of CTH, you should fill the description box.
The Description should be less than 30 characters and then select the country of origin for anti-dumping and preferential duty, it is optional to select the country of origin. After filling all the necessary details click on the “search” button and then you will see a list of goods that match your search criteria. Select the relevant list and you will be able to access a chart with all information related to the customs duties on the desired item. This is a dynamic chart where you can enter the values to check the exact custom duty which you are liable to pay.
Other fiscal related to customs duties includes:
Further, it also offers the following:
Customs duties can be paid online by following the steps given below:
To conclude Customs duty is an indirect tax which is levied on imported goods to protect the domestic products and its producers from foreign exploitations. It also helps to increase the revenue of the Government. You can calculate your customs duty via ICEGATE portal and check the rate of customs duty levied on every product online. In short, it is a government measure to control the import and export of goods in India.