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Types of Customs Duty

This document discusses the different types of custom duties imposed on goods transported across international borders into India. It describes basic customs duty, countervailing duty, safeguard duty, anti-dumping duty, national calamity contingent duty, and social welfare surcharge - each aimed at regulating trade, protecting domestic industries, offsetting foreign subsidies, and addressing dumping or health/social issues. Integrated tax is also discussed as a duty imposed to equalize imports with domestic taxes and promote fair competition.

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81 views2 pages

Types of Customs Duty

This document discusses the different types of custom duties imposed on goods transported across international borders into India. It describes basic customs duty, countervailing duty, safeguard duty, anti-dumping duty, national calamity contingent duty, and social welfare surcharge - each aimed at regulating trade, protecting domestic industries, offsetting foreign subsidies, and addressing dumping or health/social issues. Integrated tax is also discussed as a duty imposed to equalize imports with domestic taxes and promote fair competition.

Uploaded by

shiva raman
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TYPES OF CUSTOM DUTY

Customs Duty’ refers to the tax imposed on the goods when they are transported across the international
borders. The objective behind levying customs duty is to safeguard each nation’s economy, jobs, environment,
residents, etc., by regulating the movement of goods, especially prohibited and restrictive goods, in and out of
any country.

Basic Customs Duty


Basic customs duty is a type of tax imposed under the Customs Act, 1962. The basic customs duty
charged differs from item to item, and the Central Government of India has the right to exempt or
reduce any item from being taxed the basic customs duty.

Countervailing Duty (CVD)


Countervailing Duties (CVDs) are tariffs levied on imported goods to offset subsidies made to
producers of these goods in the exporting country. CVDs are meant to level the playing field between
domestic producers of a product and foreign producers of the same product who can afford to sell it
at a lower price because of the subsidy they receive from their government.

SIVARAMANVKCA@OUTLOOK.COM CA SIVARAMAN V K
Safeguard Duty
As the name suggests, this duty serves as a means of safeguarding the rise in Imports. Sometimes, if
the government feels that a rise in Imports can damage the existing domestic industry, it may levy this
duty.

It relates to Quantum of Imports, if it exceeds 3 % from Developing Country and 9% when import from
more than one Developing Country.

Anti Dumping Duty


Often, large manufacturer from abroad may export goods at very low prices compared to prices in
the 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.

National Calamity Contingent Duty


This duty is imposed by Sec 129 of the Finance Act. The duty is levied on goods like tobacco, pan
masala or any items that are harmful for health. The rate of the tax varies from 10% to 45% and
different rates are applied for different reasons.

Social Welfare Surcharge

Social Welfare Surcharge (SWS) was introduced in the Finance Act, 2018, with the intent to fulfil the
commitment of the Government to provide and finance education, health, and social security

10% of Basic Custom Duty + in case any Duty applied, before computation of IGST.

INTEGRATED TAX(GST) –

to make the uniformity of products like Article Supplied in India.

In order to equalize imports with locals 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.

SIVARAMANVKCA@OUTLOOK.COM CA SIVARAMAN V K

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