CA FINAL AS PER NEW SYLLABUS

CMA FINAL

IDT
GST + CUASTOM + FTP = 240 PAGES

SMART
BOOK
Relevant for MAY 24/NOV 24
BY CA SHIVAM NAGPAL
+91 7015451014
SHIVAM NAGPAL CLASSES
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COPYRIGHT © 2023 CA SHIVAM NAGPAL

EDITION -2

LET’S
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 CA/CS/CMA IDT SMART BOOK

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 CA/CS/CMA IDT SMART BOOK

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

Important Instructions
before we read this book...

• This book covers CA/CS/CMA Final IDT Summary relevant for Nov-23 & May-24
Attempt.

SPECIAL FEATURES:
• Content and language of this book has been picked from Institute’s material.
• Short & concise explanation to memorise.
• Memory technique.
• No Need to Refer Sperate Question bank (ALL Q MARKED)
• Keywords are highlighted
• Examples to Understand
• Arranged in Best Manner to Understand
• Charts & Diagrams & Picture for Visualisation
• Fully Exam Oriented

IN CLASS TEACH IN PRACTICAL WAY THROUGH:

• PPT
• GST PORTAL
• REAL LIFE EXAMPLES
• ANIMATIONS

IT WILL HELP TO UNDERSTAND & MEMORISE EASILY & YOU ENJOY LEARNING.

Watch free revision video on YouTube...

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

PART B: CUSTOM
INDEX
Sr. No. Particulars Page No.

1 Introduction & procedure (import + export + transit & transshipment) 5

2 Date for determination rate & tariff value & Assessment 16

3 Custom tariff act 1975 – type of duty under custom 19

4 Valuation 26

5 Concession under custom/exception to sec 12 35

6 Warehousing 40

7 Post/courier + store + baggage 43

8 Duty drawback 48

9 Custom tariff act 1975 – classification of goods 52

10 Audit 55

11 Refund 56

12 FTP 58

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

CHAPTER 1: INTRODUCTION & PROCEDURE

CUSTOM DUTY: Is a form of indirect tax.

• As per ARTICLE 265 of constitution “NO TAX SHALL BE LEVIED/COLLECTED EXCEPT BY AUTHOIRITY OF LAW”
• So, ENTRY 83 of union list has given power to union to frame law & levy custom duty (SMQ)

History:

• Sea custom act 1878 CUSTOM

Subsumed in
• Land custom act 1924 act 1962
• Indian aircraft act 1934
&

Indian tariff act 1934 CUSTOM tariff act 1975

Stages of imposition of tax & duty:(SMQ)

Levy: Assessment: Collection:

Declaration of liability is made Quantifying amount Collecting tax & duty

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

CHARGING SECTION (Sec: 12)

1 Duty of custom shall be levied (BCD) *Goods include

1) Vessel, Vehicle &
aircraft
At Rate specified in Customs Tariff Act, 1975 On Goods* 2) Stores
3) Baggage
2
4) Currency & negotiable
instruments
**India includes territorial 5) Any kind of movable
water of India (12NM) Imported in to India** Exported from India** Property.

3 Import: bringing into India Export: taking out of India 4

from place outside India to place outside India

As per supreme court it is not possible As per supreme court goods are said to be
to do all formalities in sea/air when exported when it crosses territorial water of
vessel/aircraft cross territorial water India
1) Import started: when enter in India Taxable event Export
(12 NM territorial water)
But completed only when goods
became part of mass goods of India
2) So taxable event: happens when
goods enter custom barrier & bill
of entry is filled

Taxable event Import

Export: Not Happen

5 Type of custom clearance

Clearance for Clearance for

Home consumption Warehousing

Duty assessed & paid Goods deposited in

& Warehouse &
Goods released for Cleared later on for
utilisation/consumption Home consumption &
duty paid later on

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

INDIAN CUSTOM WATER:(SMQ) up to exclusive economic zone (200NM)

• India (12NM) is relevant for taxability of goods on Import/Export
• But Indian custom water:
1. In case of smuggling
Legal action such as:
2. Committing offense under custom law Arrest/detention/confiscation
3. Dealing with prohibited goods Can be affected in Indian custom water
&
• Extraction/production of natural resources (i.e. petrol/natural gas) up to 200NM
(no Import Duty on it)

MIXTURE OF IMP. TERMS:

CONVEYANCE CUSTOM STATIONS* PERSON IN CHARGE

SEA Custom Port Master of Vessel

(Vessel) CFS & ICD

AIR Custom Airport Commander/pilot

(Aircraft) & AFS

LAND Land Custom Driver

(Vehicle) Station

RAIL Land Custom

(Railway) Station Conductor/Guard
– chief direction
+
*ONLY THOSE ARE APPOINTED BY CBIC
CFS: Container Freight Station
Foreign post office & ICD: Inland Container Depot
International courier terminal AFS: Air Freight Station

CUSTOM AREA Beneficial owner: person on

whose behalf goods
Warehouse + other place imported/exported
Where import/export goods are kept before clearance

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

IMPORT PROCEDURE (AN OVERVIEW)

1 Landing of aircraft/vessel or arrival of vehicle

Submit Import manifest/report by person in charge 2

3 Permission to unload goods/entry inward in case of vessel

Unloading of goods 4

5 Goods under custody of custodian

Filling of bill of entry 6

Bill of entry for Bill of entry for Bill of entry for

Home consumption transhipment Warehousing
[no payment of duty]
Bill of entry for
Payment of duty
Home consumption

Order for clearance for home consumption 7

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

SEC 29: Arrival of vessels/aircrafts in India

Landing of vessel/aircraft by person in charge for
• First
Must be at approved custom station
• subsequent time

Except: In case of accident/stress of whether/other unavoidable cause.

Obligation of PIC in such case: (SMQ)

1. Report to nearest 3. Not allowed unloading of goods/passenger

2. Comply with
police station/custom /crew unless necessary for reasons of
direction of such officer
officer of such arrival health/safety/preservation of life /property.

SEC 30: Delivery of Arrival Manifest/Import Manifest/Import Report (SMQ)

It consists of:
• Goods brought to India for unloading at that port
• Goods brought to India for unloading at other port
• Goods meant for Export Carried in Conveyance
Shall be submitted to PO: IGM: Import general manifest
Import through Document Time Mode of filing
SEA/AIR Arrival Manifest / Any time prior to arrival Electronical*
Import manifest (IGM)
LAND Import Report Within 12 hours after its arrival Manual

Belated filling: on valid grounds

Amendment: if no fraudulent intension
*Note: comm. May allow manual filling if e-filling not possible

SEC 30A: Passenger & crew arrival manifest

The PIC shall deliver to PO –
SEA/AIR Before Arrival
1. Passenger & crew arrival manifest
LAND Upon Arrival
2. Passenger record information
Penalty In case of 30 & 30A each: Max. Rs. 50,000 for non-compliance

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

SEC 31: Imported goods not to be unloaded from vessel until entry inwards granted
(Not applicable in case of aircraft/vehicle)
Except: baggage/passenger/crew/mail bags/perishable goods/hazardous goods
SEC 32: Any of the goods which are not mentioned in IGM or IR cannot be unloaded
SEC 33: Unloading & loading of goods at approved places only
SEC 34: Unloading of the Goods shall take place under supervision of Customs Officer
Unless special permission by PO

SEC 35: Boat Note (SMQ)

In case vessel can’t be berthed at port:
• No imported goods being unloaded or
• Export goods not accompanied by shipping bill

Shall be water borne

Unless accompanied by BOAT NOTE

OTHER POINTS:
• Goods not dealt on Sunday/holiday/any day after working hours
Unless prescribed & fee paid
• PO may, remain on conveyance, as he considers necessary.

STUDENT NOTE:

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

SEC 45: Restriction on custody & removal of imported goods (SMQ)

Goods after unloaded till clearance for home consumption/warehousing remain in custody of the custodian
approved by commissioner Major port Port trust is custodian
Airport Airport authority is custodian
Responsibility of Custodian:
1. Maintain proper record & send copy of record to PO.
2. Not to permit removal of goods unless permission in writing by proper PO
3. Send out turn statement to custom authority
4. Pay duty on pilfered goods @ rate applicable on date of filling manifest (IGM)
(SMQ)

SEC 46: Filling Bill of Entry (SMQ)

1. BOE to be submitted through electronic system (if not feasible manual filling is allowed)
2. Importer who presents a bill of entry shall ensure the accuracy/completeness/authenticity/validity etc.
3. 3 types of BOE:
• Form I (White) – for home consumption.
• Form II (Yellow) – for warehousing (into bond).
• Form III (Green) – for ex-bond clearance for home consumption (ex-bond).
4. Submit in 4 copies supported by invoice & other doc. Bill of lading
Original Custodian authorities
Duplicate Custodian of cargo for release
Triplicate For importers record
Quadruplicate Bank/RBI for remittance
5. Time limit of Filling BOE: (SMQ, PEQ M18)
• File not before 30 days of expected arrival of aircraft/vessel/vehicle
• But not later than end of day before of arrival
(allowed late filling with prescribed charges)

SEC 47: Clearance of goods for home consumption

1. Once custom office satisfied that
• Goods are not prohibited
• Duty have been paid
Make order for clearance of goods home consumption.
2. However, CG allow following importer to pay duty on differed terms
Importers certified under AEO (Tier- 2) and AEO (Tier- 3) programme or Authorised Public Undertaking

*AEO means Authorised Economic Operator approved by Directorate of International Customs (CBIC)

3. Time limit to pay duty

In case self – assessment Date of presentation of BOE
In case assessment/reassessment or provisional within 1 day (excl. holiday) from date on which bill of
assessment by PO entry returned by PO for payment
In case deferred payment On date notified in rules

4. Deferred Payment rules: (SMQ)

• An eligible importer can avail benefit of deferred payment by intimating to PC/comm. Having jurisdiction
over port
• May allow considering eligibility
Due date for differed payment for BOE returned Due date
From 1st day to 15th day of any month 16th day of that month
from 16th day to last day of any month except March 1st day of the following month
from 16th day to 31st day of March 31st March

• Payment of Duty Electronically (unless permitted by AC/DC)

• If default more than once in 3 consecutive months, facility shall not be allowed
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 CA/CS/CMA FINAL CUSTOM SMART BOOK

5. Following importer shall pay duty electronically through (ICEGATE) (SMQ)

• Importers registered under AEO
• Paying customs duty ≥ Rs 10,000 per bill of entry

SEC 48: Disposal of Goods Not Cleared (SMQ)

Custodian can sell off imported goods through auction with approval of custom dpt. & notice given to importer
1. if goods are not cleared either for home consumption/warehouse/transshipped within 30 days or extended
time
2. Tittle relinquished by importer u/s 23
Note: animal/foodstuffs/hazardous goods can sell before 30 days expiry
• After auction consolidated BOE is filled buyer wise for clearance of goods
• Office assess duty within 15 days & inform amt of duty to custodian
• Auctioned goods handed over to buyer after dues paid & out of charge order passed

SEC 49: Warehousing without warehousing

Where AC/DC satisfied on application of importer that:
1. Goods cannot be cleared within reasonable time.
2. Goods cannot be removed for warehouse within reasonable time.
then, goods can be stored in public warehouse for max 30 days & extension of 30 days by AC/DC.

SEC 51A: Payment through e-cash ledger

Every assesses has to maintain E-cash ledger on custom portal
On deposit ECL credited
Amt. can be deposited in it & can to pay duty/interest/penalty On payment ECL debited
Not applicable in these cases:
1) Goods imported/exported from customs stations where customs automated system not in place.
2) With respect to accompanied baggage.
3) For making payment of other than
• Custom duty/cess/surcharge under custom
• IGST/GST Compensation cess
• Interest/penalty/fee under CTA 1975
4) International courier terminal
SEC 51B: Ledger for Duty Credit
CG may issue duty credit in e-credit leger maintained on customs automated system which can be used to pay
duty

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

EXPORT PROCEDURE (AN OVERVIEW)

1 Exporter file shipping bill (air/water) & bill of export (land)

Proper officer check if duty payable, paid & not prohibited 2

3 PO pass order for clearance “let export order”

Goods loaded on aircraft/vessel/vehicle only if 4

Submitted duly passed shipping bill/bill of export
+
Entry outward in case of vessel

5 Delivery of export manifest by PIC

Order of PO for departure of conveyance 6

STUDENT NOTE:

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

SEC 50: Entry of Goods for Exportation

Exporter shall file electronically on customs automated system & pay custom duty
1. shipping bill (vessel/aircraft)
2. bill of export (land).
A shipping bill is file only after entry outward

SEC 51: Clearance of Goods for Exportation

1. If PO satisfied that goods not prohibited & duty is paid
2. Makes order for shipment in duplicate copy of shipping bill Called “Let Export” order.
3. If goods mentioned in shipping bill cleared but not exported in full/part
Furnish info to PO within 7 days of departure of conveyance

SEC 39: Export goods not to be loaded on vessel until Entry Outward granted
Except: baggage & mail bags
Note: applicable only on vessel not on aircraft/vehicle
For loading goods for export have these requirements:
1. Entry outward granted
2. Shipping bill/bill of export/transhipment
3. Let export order u/s 51
4. Boat note u/s 35

SEC 40: Export goods not to be loaded unless duly passed by PO.
PIC shall not permit to load on conveyance
• Export goods (other than baggage & mails) unless shipping bill/bill of export duly passed
• Baggage & mails unless export permitted by PO

SEC 41: Export General Manifest/ Departure Manifest/ Export Report (SMQ)
Can be filled By PIC or person notified by CG
1. It consists of particulars of vessel/cargo/store/crew/passenger etc.
2. Submit electronically before departure (manual in exceptional case)
3. If delayed penalty of Rs 50000

Preparation of departure general manifest

Ships Aircraft Railway/land

Issue mate receipt Issue air consignment note Railway/lorry receipt on

On boarding of goods When delivered for loading Receipt of consignment

Consolidated report of mate receipt/air consignment note/lorry receipt/railway receipt is DGM

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

SEC 41A: Passenger & crew departure manifest

PIC departing from India shall deliver to PO:
1. Passenger/crew departure manifest &
2. passenger name record information
in case of default penalty max Rs. 50,000

SEC 42: No conveyance to leave without order

PIC shall not allow departure of conveyance unless
1. PIC Ans all ques put by custom officer
2. Prov. Of sec 42 complied
3. Shipping bill/bill of export/other doc. Req. by PO delivered to him
4. All duty leviable on store consumption of conveyance or any charge/penalty paid or guaranteed
5. If goods loaded without export duty/in contravention of law such goods unloaded

Provision related to Transit & Transshipment (SMQ)

These provisions not apply to baggage/postal articles/store
Transit (Sec 53) Transshipment (Sec 54)
Goods remain on the same conveyance conveyance changes
i.e. goods unloaded from one conveyance & loaded in another
Continuity of records No continuity of records as goods transferred to another conveyance

• Provisions only apply to goods imported at custom port/airport

• Doesn’t cover transportation by land & certain specified
conditions have to fulfilled

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

CHAPTER 2: DATE FOR DETERMINATION RATE & TARIFF VALUE & ASSESSMENT

Sec 15 & 16: Date for determining rate of duty/tariff valuation (SMQ)

IMPORT 1
EXPORT 2

Goods entered for Goods cleared form Other Normal case Other
Home Consumption Warehousing (SMQ)
Date of payment Date of “let export” Date of payment
of duty order of duty
Date on which BOE for
HC is filled (ex bond)

BOE before BOE after

entry inward entry inward/Arrival 3

Date of BOE RATE OF EXCHANGE

Date of entry Take only rate notified by CBIC
inward/arrival

Import Export
Date on which BOE filled Date on which shipping
for HC/Warehousing bill/bill of export is filled

Analysis & summary

Sr. No. Particulars Duty date sec 15 & 16 Rate of exchange
1. Goods entered for HC
• BOE after entry Inward Date of presentation of BOE Date of filling BOE
• BOE before entry inward Date of granting entry inward Date of filling BOE
2. If goods cleared from warehouse Date of ex bond BOE In to bond BOE
3. Export of goods Date of let export order Date of shipping bill

STUDENT NOTE:

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

Sec 17: Assessment of Duty: (SMQ)

1. Assessment: means quantification of duty payable
Process of assessment include Determining
• Quantity & value of consignment
• Tariff quantification
• Determining rate of duty considering exemption/abatement/remission
• Whether for HC/warehousing

2. Importer/exporter shall self-assess duty

3. PO may verify on sample basis extracted through risk evaluation system
4. PO may ask importer/exporter/other person to produce any document/information
5. If found self-assessment not correct, PO may, re-assess duty
6. Importer/exporter accept reassessment – no speaking order by officer
Importer/exporter not accept reassessment – speaking order by officer within 15 days

Sec 18: Provisional Assessment of Duty (SMQ)

Provisional assessment can done by PO in following cases:
1. Assessee unable to make self-assessment & makes request in writing to PO
2. PO consider it necessary subject to chemical/other test
3. Necessary documents/info provided but PO require it necessary to make further enquiry
4. Necessary documents/info not produced to PO & he require it necessary to make further enquiry

Importer/exporter shall submit security for future deficiency & pay provisionally ordered duty
ON FINALIZATION OF ASSESSMENT SMQ

Duty determined Duty determined

1 2
> <
Already paid Already paid

PAY Differential duty + Refund provided +

interest @ 15% p.a. interest @ 6% p.a.

1st day of month in Date 3M from date

which duty of final assessment
determined provisionally To
To Refund date
Date of payment

Process of final assessment 3

1. PO shall inform assessee in written req info/doc. Within 15 days of order of provisional assessment
2. Assessee should provide info + doc. Req. within 1 month from order of provisional assessment/requisition
PO (Extension: Max 3M + further 3M by JC/Add Comm + Extension by Comm.)

3. Now PO Finalize assessment: Within 2 months + Extension 3M by Comm.

Intimation + chemical/other test + enquiry investigation/verification report

4. Failure to comply with reg. penalty Rs. 50,000.

Note: each bill of entry considered as sperate case

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 CA/CS/CMA FINAL CUSTOM SMART BOOK
EXAMPLE: [PROV. ASSESSMENT & FINAL ASSESSMENT] (IMP.)
Moris Lal imported goods from Germany & is finally re-assessed for two such consignments. Particulars are as follows:
Date of provisional assessment 12th December, 2020
Date of final re-assessment 2nd February, 2021
Duty demand for 1st consignment Rs. 1,80,000
Refund for the 2nd consignment Rs. 4,20,000
Date of refund made by the department 28th April, 2021
Date of payment of duty demanded 5th February, 2021
Determine interest payable & receivable, if any, on final re-assessment of two consignments
Solution:
• importer is liable to pay interest at rate of 15% p.a., on any amount payable consequent to reassessment order from first day of month in which
duty is provisionally assessed till date of payment.

• Therefore, Moris Lal is liable to pay interest in respect of 1st consignment: = Rs. 1,80,000 × 15% × 67/365 = Rs. 4,956 (rounded off)

• If any amount refundable due to re-assessment is not refunded within 3 months from date of re-assessment, interest is payable to importer on
unrefunded amount @6 % p.a. till date of refund of such amount

• Since, refund has been made (28.04.2021) within 3 months from date of reassessment (02.02.2021), interest is not payable to Moris Lal on duty
refunded in respect of 2nd consignment.

Introduction of Faceless Assessment 4

• FA is major Customs Reforms where BOE is identified for scrutiny assigned to assessing officer who
physically located at Customs station, not Port of Import in Customs Automated System.
• It separates assessment from physical location to, using technology platform.
• The importer will continue to file his doc. Incl. BOE & supporting doc. on ICEGATE portal(no change)

Key objectives of Faceless Assessment:

1. Anonymity in assessment for reduced physical interface between trade & Customs
2. Speedier Customs clearances
3. Greater uniformity of assessment
4. Promoting sector specific & functional specialization in assessment

STUDENT NOTE:

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

CHAPTER: 3 TYPE OF DUTY UNDER CUSTOM

PRICING UNDER INTERNATIONAL MARKET

Seller is responsible for

loading the goods on
ship. Post loading risk
Seller responsible for
transferred to buyer
till place of importation
USA Factory post that unloading,
Ex-factory price: 1
custom clearance etc.
Production + profit Free on board (FOB): are borne by buyer
FAS +
3
Loading charges +
Export duty
Cost insurance
4
freight (CIF):
FOB +
2 Freight +
Insurance
Free alongside (FAS):
Ex- factory +
Local freight +
Local taxes

Seller deliver goods alongside Indian importer

ship. Post that risk of goods Unloading charges
passed on to buyer & he is + import duty
required to load the goods on
ship & bear all expenses

STUDENT NOTE:

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

CUSTOM TARIFF ACT, 1975

• Generally: Standard rate of duty applicable
• For notified area: preferential rate of duty
First Schedule Second Schedule (reduced rate due to agreement B/w countries)

Rate of duty on Rate of duty on

Import of goods Export of goods

Conditions to be fulfilled for preferential rate of duty: (SMQ)

1. At time of importation, make specific claim it
2. Claim that goods produced/mfg. In preferential area
3. Area notified as preferential area.
4. Origin of goods determined in accordance with CTA

Normally duties are not levied on export, however some items are chargeable to export duty to discourage the
export of such limited items

Sec 2: Basic custom duty (BCD) [Sec 12]

Levied on all goods imported/exported on transaction value 14(1)/tariff value 14(2)

SWS (Social Welfare Surcharge) Only on Imported goods

Levied @ 10% on BCD to provide & finance education. Health & social security

Sec 3: Additional duty of custom under Custom Tariff ACT

ACD 3(1): EXISE DUTY
To counter balance effect of excise duty Leviable to like article produced/mfg. in India
Duty Rate: as mentioned in central excise tariff act 1985
i.e. DP MAN, alcohol Liquor For HC, Tobacco etc.

ACD 3(5): Sales Tax & VAT

To counter balance effect of VAT/Sales tax/other tax on sale/purchase of like article in India
Rate: @ 4%

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 CA/CS/CMA FINAL CUSTOM SMART BOOK

ACD 3(7): IGST

To counter balance effect of GST leviable on like goods in India
Rate: same as applicable on those goods in India (Max 40%)

ACD 3(9): GST Compensation Cess

To counter balance effect of GST Compensation Cess leviable on like goods in India
Sec 3(8): Value for ACD 3(7) & 3(9): value u/s 14(1)/ (2) + all other duties excluding GST/Cess

If Bond to Bond Transfer then, value for ACD 3(7) & 3(9)
If goods sold before clearance (SMQ)
• Value determined u/s 3(8) Whichever is higher
• Transaction value
(if sold multiple time take last TV)

Note: For part goods sold calculate as above proportionately & value u/s 3(8) for unsold goods
& as per CBIC clarification for calculation of BCD value should be assessable value of original importer

Sec 6 & 7: Protective Duty

CG

based on recommendation of tariff commission

take action to provide protection to indigenous industry

by levying protective duty

factors to be considered while levying protective duty:

1. Should not be very stiff as to discourage import
2. Sufficiently attractive to encourage import to bridge demand & supply Gap
Applicable up to date specified in schedule I

Note: CG may reduce/increase duty by notification (for increase parliament approval required)

Sec 8B: Safeguard Duty

1. CG May levy if satisfied that:
• Articles imported in India in increased quantity
• Increase import causing/threatening to cause serious injury
to domestic industry.
2. Mode of Safeguard Measures: • Imposing safeguard duty
• Application of tariff rate quota
• others
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 CA/CS/CMA FINAL CUSTOM SMART BOOK

3. Duration: Initially: 4 years & can be extended to 10 year in total (6+4)

4. Exemption from safeguard measures: (SMQ)
a) Articles originating from developing countries if
• imports of such article ≤ 3% of total import in India
• if more than 1 country, aggregate of imports from all such countries ≤ 9%
b) articles imported by 100% EOU/SEZ unless: (SMQ)
• made specifically applicable
• cleared in DTA (domestic area)/Used in mfg. of any article cleared in DTA
5. Provisional safeguard duty can be levied max. period up to 200 days

Sec 9: Countervailing duty on subsidized article

1. Levied when:
• Goods imported in to India
• Country/territory, directly/indirectly pay subsidy on mfg./production/exportation of such article including
subsidy on transportation
• Which will reduce the cost for exporter’s & can enter into India @ reduced prices & effect domestic industry

Deemed subsidy: low rate interest/grant etc., income/price support by govt./govt. body/private body supported
by govt.

2. CVD: max. subsidy amt.

3. Points considered while levying this duty
• Subsidy relate to export performance
• Subsidy relate to use of domestic goods over imported goods
• Subsidy conferred to limited person

Sec 9A: Anti-dumping duty (SMQ)

1. When to levy: Sometime, outside exporter reduced their price to dump their product into India to cause
injury to domestic industry of India, ADD is levied only if “like article” produced in India
2. Dumping is when:

Normal value in Export

Exporting market > Price

MR. jack in America sell goods A @ Price 1000 in America is selling

goods to India @ 600, Here 1000 > 600 hence dumping

3. Anti-dumping duty calculation:

Dumping margin or injury margin – Lower of both

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Margin of dumping: Normal Value – Export Price.

(in exporting market) (If not available price @ which resold
to 1st independent buyer)
If not able to decide based on domestic
sale in exporting country then
• Price @ which sold to 3rd country
• Cop + admin + S&D + profit

Injury Margin: Fair Selling Price – Landed value (CIF + BCD + SWS)
[non-injurious price]
in India
4. Refund: If importer prove that duty collected > actual dumping margin (SMQ)
Refund available subject to unjust enrichment
EXAMPLE: [ADD AMOUNT CALCULATION]
KTU Limited imported goods for sale in India from Country Z, which liable for ADD. Country Z sell the like goods in domestic market in ordinary
course of trade at USD 300 per piece. imported goods are sold in domestic Indian industry @ USD 275 per piece. KTU Limited has imported goods
at USD 180 per piece. Landed value of imported goods is USD 190 per piece.
Compute anti-dumping duty payable by KTU Limited for 800 pieces of goods assuming conversion rate @ ₹ 72 per USD. (RTP J21)
Solution:
The quantum of anti-dumping duty is:
(i) margin of dumping or
(ii) injury margin whichever is lower.
• Margin of dumping is difference between export price & normal value of imported article.
• Injury margin is difference between fair selling price [non-injurious price (NIP)] due to domestic industry & landed value of dumped imports.
• Export price, means the price of an article exported from exporting country.
• KTU Limited has imported goods at USD 180 per piece. Thus, export price is USD 180 per piece.
• Normal value, means comparable price, in ordinary course of trade, for like article when destined for consumption in exporting country
Country Z sell like goods at USD 300 per piece, thus normal value is USD 300 per piece.
• Fair Selling Price (FSP) [Non-Injurious Price] Fair selling price in the present case is USD 275 per piece.
Landed Value is taken as assessable value is USD 190 per piece. anti-dumping duty per piece is:
(i) Margin of dumping is USD 120 [USD 300- USD 180] or
(ii) Injury margin is USD 85 [USD 275 – USD 190] whichever is lower i.e. USD 85
Anti-dumping duty for 800 pieces (in rupees) = USD 85 x 800 pieces x ₹ 72 = ₹ 48,96,000.

Common points CVD & ADD:

1. Duration: Initially 5 years (unless revoked) & further extension by 5 years & further 1 year (pending review)
2. Retrospectively levy: 90 days from date of notification (SMQ)

Conditions for retrospective imposition CVD: Conditions for retrospective imposition ADD: (SMQ, MTP)
1. Injury difficult to repair, caused by massive import 1. history of dumping/importer aware that exporter doing
in short duration due to subsidy. dumping & that cause injury
2. To preclude Effect of injury, retrospectively levy required 2. injury caused by massive dumping in short time.

3. Temporary revocation: not exceed 1 year at a time

4. Provisional imposition: later refunded if excess collected
5. Not applicable in case: goods imported by 100% EOU/SEZ unless
• Made specifically applicable
• Cleared in DTA (Domestic area)/used in mfg. of goods cleared in DTA
6. Ways that constitute circumvention of CVD/ADD: (SMQ, RTP N19)
a) altering description/name/composition of article
b) imported in unassembled/disassembled form
c) changing country of origin/export
d) other manner, to make duty ineffective
7. Absorption of duty:
• If duty levied is absorbed by decrease in export price without any commensurate change in Cop/resale price
Due to which duty rendered ineffective
• Govt. may modify such duty to counter such effect of absorption
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8. In following situation CVD & ADD can’t be levied:

a) ADD & CVD can’t be levied together (SMQ)
b) Can’t be levied just due to exempt from duty/tax/refund
When meant for consumption in origin country or exportation
c) Import from WTO member country or GOI having most favoured nation agreement, unless import from such
country cause/threat material injury to domestic Injury
d) Imported from specified countries unless preliminary finding of subsidy/dumping consequence injury to domestic
market
Comparison table
Particulars Safeguard Duty Countervailing duty Anti-Dumping Duty
on subsidized (ADD)
articles (CVD)
Duration Initially: 4 years Initially: 5 years Initially: 5 years
Extn: 6 years Extn: 5 years Extn: 5 years
+ 1 Yr. pending review + 1 Yr. pending review
Retrospective N.A. Max. 90 Days Max. 90 Days
levy
Provisional For 200 days No limit No limit
Imposition

Sec 9C: Appeal

• Appeal against order of determination/review to Customs, Excise & Service Tax AT (CESTAT), in respect of
existence/effect of ADD/CVD/Safeguard duty
• Fee for appeal: Rs. 15,000 for every application
• Fee for restoration of appeal/application: Rs. 500.
• Time: Every appeal shall be filed within 90 days + Extension from date of order.

Agriculture Infrastructure and Development Cess (AIDC)

• AIDC levied on import of specified goods @ rate notified (Kabuli Chana, apple, coal, urea, Silver, Gold etc.)
• Levied in addition to other duty
• On value as per sec 14
• Cess used to finance improvement of agriculture, infrastructure & other development expenditure

Other points (SMQ)

STUDENT NOTE:
1. Govt. may impose/enhance export duty by issue of notification
(even goods not specified in schedule – II)
2. Govt. may impose/enhance import duty by issue of notification
(only if goods specified in schedule – I)

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Format for solving numerical question

Assessable value xxx

(+) Basic Custom Duty (BCD) xxx
(+) Protective Duty xxx

(A) xxx
(+) ACD 3(1) on ‘A’
XXX
(On DP MAN, Alcohol, Tobacco)

(B) XXX
(+) SWS @ 10% on ‘BCD’ XXX

(C) XXX
(+) ACD 3(5) on ‘C’ XXX
(To counter balance VAT/CST)
(D) XXX
(+) Safeguard duty (Levied on assessable value) XXX
(+) Anti-dumping Duty XXX
(+) ACD on Subsidized articles XXX
(E) XXX

(+) IGST on ‘E’ XXX

(+) Cess on ‘E’ XXX

Total XXX

EXAMPLE: [DUTY PAYABLE CALCULATION] (IMP.)

Determine duties payable if Mr. Rao imported rubber from Malaysia at landed price (exclusive of duties) of ₹25 lakh. It is notified by CG that share
of imports of rubber from developing country against total imports to India exceeds 5%. Safeguard duty notified on this product is 30%, IGST u/s
3(7) is 12% & BCD is 10%.
Solution:
Computation of total duties payable
S.N. Particulars (₹)
1 Landed price 25,00,000
2 Add: Basic customs duty @ 10% 2,50,000
3 Add: Social welfare surcharge (SWS) @ 10 % on ₹ 2,50,000 25,000
4 Add: Safeguard duty @ 30% on ₹ 25,00,000 7,50,000
5 Add: Integrated tax @ 12% of ₹ 35,25,000 (₹ 25,00,000 + ₹ 2,50,000 + ₹ 7,50,000 4,23,000
+ ₹ 25,000)
[Integrated tax is levied on the sum total of the assessable value of the imported goods, customs duties
and applicable SWS]
6 Total customs duties and tax payable 14,48,000
[₹ 2,50,000 + ₹ 7,50,000 + ₹ 25,000 + ₹ 4,23,000]

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