TYPES OF DUTIES UNDER CUSTOMS TARIFF ACT, 1975
BASIC CUSTOM DUTY
• Levied under Section 12 of Customs Act, 1962
• Section 2 of the Customs Tariff Act, 1975
• Normally, it is levied as a percentage of Value as determined under section 14(1).
• There are different rates for different goods. But the general basic rate is 10%.
• Duty at the “Standard rate” is charged where there is no provision for preferential treatment.
• To be eligible, for the preferential treatment the goods should be the one which are imported from any preferential area covered under the Government of India Agreements for charging preferential rate of duty.
• The Central Government has the power to increase or reduce or discontinue the preferential rate in respect of any article specified in the First Schedule provided it considers it to be necessary in the public interest.
• Preferential rate is applied only where the owner of the article (importer) claims at the time of importation, with supporting evidence, that the goods are chargeable with the preferential rate of duty.
ADDITIONAL CUSTOM DUTY/COUNTERVAILING DUTY
• This is levied under Section 3(1) of the Customs Tariff Act, 1975.
• The amount of this duty is equivalent to the amount of excise duty payable on like goods manufactured or produced in India.
• When excise duty is exempt/nil rate is applicable on goods imported, no Countervailing Duty is levied
• Countervailing Duty is leviable even if similar goods are not produced in India.
• Exemption of basic customs duty doesn’t automatically mean exemption of Countervailing Duty.
• Countervailing Duty is payable in case of goods leviable under State Excise also.
PROTECTIVE DUTY – SECTION 6 & 7 OF THE CUSTOMS TARIFF ACT, 1975
• The protective duties should not be very stiff so as to discourage imports.
• It should be sufficiently attractive to encourage imports to bridge the gap between demand and supply of those articles in the market.
• Section 6 provides that the protective duties are levied by the Central Government upon the recommendation made to it by the Tariff Commission established under the Tariff Commission Act, 1951, and upon it being satisfied that circumstances exist which render it necessary to take immediate action to provide protection to any industry established in India.
• As per section 7(1), the protective duty shall be effective only upto and inclusive of the date if any, specified in the First Schedule.
• Section 7(2) provides that the Central Government may reduce or increase the duty by notification in the Official Gazette. However, such duty shall be altered only if it is satisfied, after such inquiry as it thinks necessary, that such duty has become ineffective or excessive for the purpose of securing the protection intended to be afforded by it to a similar article manufactured in India.
ANTI-DUMPING DUTY – SECTION 9A OF THE CUSTOMS TARIFF ACT, 1975
• A Where any article is exported by an exporter or producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article.
• The anti-dumping duty is dumping margin or injury margin whichever is lower.
• ADD = Margin of Dumping or Injury Margin (Whichever is lower)
• Dumping means exporting goods to India, at prices lower than the ones in the domestic market of the exporting country, subject to certain adjustments.