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The Customs Act was
formulated in 1962 to prevent illegal imports and exports of goods.
Besides, all imports are sought to be subject to a duty with a view to
affording protection to indigenous industries as well as to keep the
imports to the minimum in the interests of securing the exchange rate of
Indian currency.
Duties of customs are levied on goods imported or exported from India
at the rate specified under the customs Tariff Act, 1975 as amended from
time to time or any other law for the time being in force. For the
purpose of exercising proper surveillance over imports and exports, the
Central Government has the power to notify the ports and airports for
the unloading of the imported goods and loading of the exported goods,
the places for clearance of goods imported or to be exported, the routes
by which above goods may pass by land or inland water into or out of
Indian and the ports which alone shall be coastal ports.
In order to give a broad guide as to classification of goods for the
purpose of duty liability, the central Board of Excises Customs (CBEC)
bring out periodically a book called the "Indian Customs Tariff
Guide" which contains various tariff rulings issued by the CBEC.
The Act also contains detailed provisions for warehousing of the
imported goods and manufacture of goods is also possible in the
warehouses.
For a person who do not actually import or export goods customs has
relevance in so far as they bring any baggage from abroad.
Types of duties
Under the custom laws, the following are the various types of duties
which are leviable.
Basic Duty:
This is the basic duty levied under the Customs Act. The rate varies
for different items from 5% to 40%.
Additional Duty (Countervailing Duty)
(CVD):
This additional duty is levied under section 3 (1) of the Custom Tariff
Act and is equal to excise duty levied on a like product manufactured or
produced in India. If a like product is not manufactured or produced in
India, the excise duty that would be leviable on that product had it
been manufactured or produced in India is the duty payable. If the
product is leviable at different rates, the highest rate among those
rates is the rate applicable. Such duty is leviable on the value of
goods plus basic custom duty payable. eg. If the customs value of goods
is Rs. 5000 and rate of basic customs duty is 10% and excise duty on
similar goods produced in India is 20%, CVD will be Rs.1100/-.
Additional Duty to compensate duty on inputs used by Indian
manufacturers. This Additional Duty is levied under section 3(3) of the
Customs Act. It can be charged on all goods by the central government to
counter balance excise duty leviable to raw materials, components and
other inputs similar to those used in the production of such good.
Anti-dumping Duty:
Sometimes, foreign sellers abroad may export into India goods at prices
below the amounts charged by them in their domestic markets in order to
capture Indian markets to the detriment of Indian industry. This is
known as dumping. In order to prevent dumping, the Central Government
may levy additional duty equal to the margin of dumping on such
articles, if the goods have been sold at less than normal value. Pending
determination of margin of dumping, such duty may be provisionally
imposed. After the exact rate of dump ing duty is finally determined,
the Central government may vary the provisional rate of dumping duty.
Dumping duty can be imposed even when goods are imported indirectly or
after changing the condition of goods. There are however certain
restrictions on imposing dumping duties in case of countries which are
signatories to the GATT or on countries given "Most Favoured Nation
Status" under agreement. Dumping duty can be levied on imports on
such countries only if the Central Government proves that import of such
goods in India at such low prices causes material injury to Indian
industry.
Protective Duty:
If the Tariff Commission set up by law recommends that in order to
protect the interests of Indian industry, the Central Government may
levy protective anti-dumping duties at the rate recommended on specified
goods. The notification for levy of such duties must be introduced in
the Parliament in the next session by way of a bill or in the same
session if Parliament is in session. If the bill is not passed within
six months of introduction in Parliament, the notification ceases to
have force but the action already undertaken under the notification
remains valid. Such duty will be payable upto the date specified in the
notification. Protective duty may be cancelled or varied by
notification. Such notification must also be placed before Parliament
for approval as above.
Duty on Bounty Fed
Articles:
In case a foreign country subsidises its exporters for exporting goods
to India, the Central Government may import additional import duty equal
to the amount of such subsidy or bounty. If the amount of subsidy or
bounty cannot be clearly deter mined immediately, additional duty may be
collected on a provisional basis and after final determination,
difference may be collected or refunded, as the case may be.
Export Duty:
Such duty is levied on export of goods. At present very few articles
such as skins and leather are subject to export duty. The main purpose
of this duty is to restrict exports of certain goods. The Central
Government has been granted emergency powers to increase import or
export duties if the need so arises. Such increase in duty must be by
way of notification which is to be placed in the Parliament within the
session and if it is not in session, it should be placed within seven
days when the next session starts. Notification should be approved
within 15 days. |
