17 February 2011
Custom Duty in IndiaThe Custom Duty in India is one of the most important tariffs. The custom duty in India is regulated by the Customs Act of 1962. The main purpose of the custom duty in India is the prevention of the illegal export and import of goods. The rates of the custom duty levied on the imported and exported goods are assigned in the Custom Act, 1962.
The Acts under the custom duty in India:
Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993 Customs Act, 1962
The Registrars of Companies in different states chiefly manage: Customs Tariff Act, 1975 Foreign Trade (Development and Regulation) Act, 1992 Taxation Laws (Amendment) Act, 2006 Provisional Collection of Taxes Act, 1931 Central Excise Tariff Act, 1985 Foreign Trade (Regulation) Rules, 1993 Central Excise Act, 1944 The rules and regulations under the custom duty in India: Foreign Privileged Persons (Regulation of Customs Privileges) Rules, 1957 Denaturing of Spirit Rules, 1972 Customs (Attachments of Property of Defaulters for Recovery of Government Dues) Rules, 1995 Accessories (Condition) Rules, 1963
Specified Goods (Prevention of Illegal Export) Rules, 1969
Re-Export of Imported Goods (Drawback of Customs Duties) Rules, 1995
Notice of Short-Export Rules,1963
Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995
Customs and Central Excise Duties Drawback Rules,1995
Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995
Customs Valuation (Determination of Price of Imported Goods) Rules, 1988
Customs Tariff (Determination of Origin of Goods under the Agreement on SAARC Preferential Trading Arrangement) Rules,1995
Notified Goods (Prevention of Illegal Import) Rules, 1969
Customs Tariff (Determination of Origin of Goods under the Bangkok Agreement) Rules, 1976
Customs Tariff (Determination of Origin of the U.A.R. and Yugoslavia) Rules, 1976
Customs (Settlement of Cases) Rules, 1999
Customs( Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996
Customs (Publication of Names) Rules,1975
Rules of Determination of Origin of goods under the Agreement on South Asian Free Trade Area (SAFTA)
Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997
Baggage Rules, 1998 Customs Tariff (Determination of Origin of Other Preferential Areas) Rules,1977
Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement Between the Democratic Socialistic Republic of Sri Lanka and the Republic of India) Rules, 2000 The different duties under custom duty in India: Basic Duty: This is the general kind of duty levied under the Customs Act, 62
Additional Duty (Countervailing Duty): This duty is levied under the Custom Tariff Act, section 3 (1)
Anti-dumping Duty: This duty prevents the dumping of foreign goods by the transnational companies
Protective Duty: This duty protect the interests of the Indian industrial sector
Export Duty: This duty is levied on the export of goods
RATE OF DUTY I. Generally items imported as baggage are subjected to a uniform rate of duty for ease of assessment II. The general rate of duty for items imported in excess of the permissible free allowance is 60% (Notification No. 136/90 as amended by Notification No. 20/2001-Cus dated 1-03-2001) III. The rate of duty applicable to items in Annexure II imported by passengers transferring their residence or returning to India after a stay of 365 days abroad in the preceding two years is 30% (Notification No. 137/90 as amended by Notification No. 24/2002 dt.01-03-2002). The total aggregate value of such goods may be upto Rupees five lakhs IV. Alcoholic drinks and Tobacco products imported in excess of the free allowance are charged to duty at the rates applicable to their commercial imports. These rates for some of the items are as follows:- (i) Cigarettes - 150% (ii) Whisky * (a) not exceeding US $ 25 per case 413.24% (Notification No. 54/2001 as amended by Notification No. 24/2002 dt.01-03-2002) (b) exceeding US $ 25 per case 339.92% (Notification No. 54/2001 as amended by Notification No. 24/2002 dt.01-03-2002) (iii) Wines and Beer * (a) not exceeding US $ 25 per case 264% (Notification No. 54/2001 as amended by Notification No. 24/2002 dt.01-03-2002) (b) exceeding US $ 25 per case 212% (Notification No. 54/2001 as amended by Notification No.24/2002 dt.01-03-2002) V. Gold is charged to a duty of Rs. 250 per 10 gms. for passengers importing gold under the prescribed scheme VI. Silver is charged to a duty of Rs. 500 per Kg. for passengers importing silver under the prescribed scheme * The duty on Alcoholic Beverages is calculated in following manner A. Suppose the value of item is Rs. 100 B. Basic Customs Duty (BCD say 100%) = Rs.100 C. Value plus BCD = Rs. 200 D. Additional Duty (AD say 75%) on C = Rs.150 E. Value + BCD +AD = Rs.350 F. Special Additional Duty (SAD 4%) = Rs.14 G. Total Duty (BCD+AD+SAD) = Rs. 264 Note: Incase the value of one item exceeds the duty free allowance, the duty shall be calculated only on the excess of such amount.
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