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12 viewstypes of custom law
The document outlines various types of customs duties applicable in India, including Basic Customs Duty, Integrated Tax, and GST Compensation Cess, along with their conditions and exemptions. It explains the purpose of protective duties, safeguard duties, countervailing duties, and anti-dumping duties, detailing how they are imposed and calculated. Additionally, it discusses the Central Government's authority to grant exemptions from customs duties and the rationale behind such exemptions.
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0% found this document useful (0 votes)
12 viewstypes of custom law
The document outlines various types of customs duties applicable in India, including Basic Customs Duty, Integrated Tax, and GST Compensation Cess, along with their conditions and exemptions. It explains the purpose of protective duties, safeguard duties, countervailing duties, and anti-dumping duties, detailing how they are imposed and calculated. Additionally, it discusses the Central Government's authority to grant exemptions from customs duties and the rationale behind such exemptions.
Uploaded by
nimawangkalCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
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9
INTRODUCTION
“Therefore, the relevant date for determining the duty in the given case will be
20.10.20XX (the date on which the bill of entry for home consumption is presented) and
thus, the relevant rate of duty will be 10%.
TYPES OF CUSTOMS DUTIES
: : 1. BASIC CUSTOMS DUTY
Basic Customs Duty is levied under the provisions of section 12 of the Customs Act
and section 2 of the Customs Tariff Act.
Charging section : The duties of customs shall be levied :
@ at such rates as may be specified under the Customs Tariff Act, 1975
@ on goods imported into or exported from India.
see Connie custom duty : The rates at which duties of customs shall be levied
under the eed Act 1962 are specified in the First and Second Schedules.
Rai t Pinan ie Custom Duty remained chargeable under various situations by
relevan' i oma Acts. Likewise Finance Act, 2021 has also amended the applicability,
scope ane’ rates for specified products import in addition to exemptions and withdrawal
of concessions under various notifications.
epee Even in the question shall be applied, while calculating the BCD amount
Standard rate of
applicable.
Integrated Tax is levied on any article imported into India. ot Tele
duty : Generally, the rate of duty specified in column (4) is
eb ch a
__ Preferential rate of duty : If the goods are imported from the areas notified by the
Central Government to be preferential areas, then the preferential rate of duty will be
applicable. The Government may by notification prescribe preferential rate of duty in
respect of imports from certain preferential areas.
Conditions to be fulfilled for preferential rate of duty
The importer will have to fulfill the following conditions to make the imported goods
tigible for preferential rate of duty :
__ (a) At the time of importation, he should make a specific cliam for the preferential
Tate. ai
(b) He should also claim that the goods are produced or manufactured in such
preferential area. eee
() The area should be notified under the Customs Tariff Act to be a preferential
E area. De
(@) The origin of the goods shall be determined in accordance with the rules made
under the Customs Tariff Act. 10 customs DUTY H ea
If the importer fails to discharge the above duties, the goods shall be liable to
standard rate of duty.
2.INTEGRATED TAX AS.
Integrated tax under Section 3(7) of Customs Tariff Act, 1975
of IGST Act, 2017 on a like
It is the tax equal to IGST as leviable under Sec
wees article on its supply in India. asieban tas
i oods, mg
iabl Sum of total of assessable value of imported g¢
ae duties and applicable social welfare surcharge.
Rate of tax Not exceeding 40% (Given in questions)
3. GOODS AND SERVICES TAX COMPENSATION CESS Go
GST compensation cess is a compensation cess levied under section 8 of the onde
and Services Tax (Compensation to State) Act, 2017. It may be noted that G ‘ST
compensation cess would be applicable only on those supply of goods or services that
have been notified by the Central Government. ;
Common points for Integrated tax and GST compensation cess
Assessable value for computing In-| Value under section 14(1)/tariff value XXX
tegrated tax and GST compensation | determined section 14(2)
Oe. Add : Basic Custom Duty G+)
Assessable value Total
4, PROTECTIVE DUTIES
The two types of custom duties are revenue duties and protective duties :
(a) Revenue Duties : Are those which are levied for the purpose of raising customs
revenue.
(b) Protective duties : Are intended to give protection to indigenous industries. If
resort to protective duties:is not made there could be a glut of. cheap imported articles
in the market making the indigenous goods unattractive.
Factors to be considered while giving protection through protective duties: The
Protection through protective duties is given considering the following factors :
(a) The protective duties should not be very stiff'so as to discourage imports.
(b) It should be sufficiently attractive to encourage imports to bridge the gap
between demand and supply of those articles in the market.
The protective duties are levied by the Central Government upon the
recommendation made to it by the Tariff Co
: 3 1 mmission and upon it being satisfied that
circumstances exist which render it necessary to take immediate action for protection
of.any industry established in India.
” Cobynn Ale Pre: Sen gh OE ge ae go
u
sc _iviropuctin.
(A) SAFEGUARD DUTY
entral Government ean i ‘Tariff Act,
watt Satisfied tte impose the safeguard duty u/s 8B of Customs
or article is i i ‘
(a) Any 's imported into India in increased quantities;
p) Such increased importation j ‘ ii ious injury to
oe Gndustry. portation is causing or threatening to cause serious 19)
me duty is imposed by issuing a notification in the Official Gazette,
jonjeee ard duty : The safeguard duty is imposed for the purpos
etn a interests of any domestic industry in India aiming to make it more
ppouitive. =
nts which merit consideration
1. Safeguard duty is product specific i.e. the safeguard duty is applicable only for
certain articles in respect of which it is imposed. :
2, This duty is in addition to any other duty in respect of such goods levied under
“ a or any other law for the time being in force.
3. Education cess and second: i ti s is not payable on
Tae ary and higher education ces
yovisional Safeguard Duty
(a) The Central Government is also empowered to impose provisional safeguard
duty pending determination of the final duty.
(b) This provisional duty may be imposed on the basis of preliminary determina-
tion that increased imports have caused or threatened to cause serious injury
to a domestic industry. es
(©) The provisional duty shall be in force for a maximum period of 200 days from
the date of its imposition.
(@ Ifupon final determination, the Central Government is of the opinion that the
increased imports have not caused or threatened to cause serious injury to a
domestic industry, the duty collected shall be refunded.
(B) COUNTERVAILING DUTY ON SUBSIDIZED ARTICLES
The countervailing duty on subsidized articles is imposed w/s 9 of Customs Tariff
et, 1975, if the following conditions are satisfied.
(@) Any country, directly or indirectly, pays subsidy upon the manufacture or
production or exportation of any article. Such subsidy includes subsidy on
transportation of such article.
(b) Such articles-are imported into India.
(0) The importation may/may not directly be from the country of manufac-
ture/production.
The amount of countervailing duty shall not exceed the amount of subsidy paid or
sstowed as aforesaid.
Now, CVD (on subsidised articles) will not be applicable automatically to 100% EOU
‘SEZ units unless specifically made applicable to such units. (Finance Act, 2021)
‘ints which merit consideration
(@) This duty is in addition to any other duty chargeable under this Act or any other
'w for the time being in force.
(b) Countervailing duty shall not be levied unless it is determined that :
(i) The subsidy relates to export performance;
(i) The subsidy relates to the use of domestic goods over imported goods in the -
export article. "i
e of
|
|
|
:
|
| 12 : ____CusToMs DUTY = _
Duration of countervailing duty on subsidized articles : Unless revoked earlier, the
duty imposed under this section shall be in force for a period of 5 years from the date
of its imposition. |
‘ension of period : Central Government may extend the period of such imposition
from the date of such extension provided it, in a review, is of the opinion that such
cessation is likely to lead to continuation or recurrence of such subsidization and injury,
However, the extension can be for a maximum period of 5 years.
(C) ANTI-DUMPING DUTY (ADD)
(U/s 9A of Customs Tariff Act)
When the export price of a product imported into India is less than the Normal
Value of ‘like articles’ sold in the domestic market of the exporter, it is known ag
dumping. Although there is nothing inherently illegal or immoral in exporter charging
2 price less than the price prevailing in its domestic market, Designated Authority can
initiate necessary action for investigations and subsequent imposition of anti-dumping
duties, if such dumping causes or threatens to cause material injury to the domestic
industry of India.
Anti-dumping action can be taken only when there is an Indian industry which
produces “like articles” when compared to the allegedly dumped imported goods. Further,
this duty is country specific ie. it is imposed one imports from a particular country.
Dumping is
ooo
Normal value in the ( ;
("Seti ak | Export price
Under the General Agreement on Tariffs and Trade (GATT) provisions,
anti-dumping duties higher than the margin of dumping cannot be imposed.
Computation of anti-dumping duty
Anti-dumping duty is :
(@® Margin of dumping, or
Gi) Injury margin
whichever is lower.
The anti-dumping duty chargeable under this section is in addition to any other
duty imposed under this Act or any other law for the time being in force.
(a) Margin of dumping : In relation to an article, it means the difference between its
export price and normal value. It is generally expressed as a percentage of the export price.
(b) Export price : In relation to an article, means of goods imported into India is the
price of an article exported from the exporting country or territory.
(c) Normal value : In relation to an article, means comparable price, in the ordinary
course of trade, for the like article when destined for consumption in the exporting
country as determined in accordance with the rules. - INTRODUCTION 18
Now, ADD (on subsidised articles) will not be applicable automatically to 100% EOU
ree units unless, it is specifically made applicable on such units. (Finance Act, 2021)
AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS (AIDC)
| jn Agriculture Infrastructure and Development Cess (AIDC) has been imposed on
port of 5 ied goods. Tb ensure that imposition of cess does not lead to additional
firden on the consumer, the BCD rates have been lowered. This cess shall be used to
foance the improvement of agriculture infrastructure and other development
enditure. (Finance Act, 2021)
For he purposes of financing the agriculture infrastructure and other development
gpenditure this new cess has been introduced. AIDC is leviable on notified goods when
sported in India at a rate not exceeding the rate of basic customs duty.
“AIDC shalll be levied on the value of goods as determined vide section 9 of the
ystoms Act, and shall be levied in addition to any other duties of Customs.
‘AIDC would not be applicable in cases of import of goods in cases of exemptions
ind advance authorisation schemes.
SOCIAL WELFARE SURCHARGE (SWS) ON IMPORTED GOODS
__ Prior to presentation of Finance Bill, 2018, Education cess @ 2% and SHEC @ 1%
iF levied on aggregated of duties of customs on items imported into India.
| However, with affect from 02.02.2018 all goods imported into India have been
sxempted from levy of such Education cess of 3%, but in lieu of these education cesses,
Welfare Surcharge (SWS) @ 10% has been levied for providing and financing
ication, health and social security.
_ SWS is leviable on the aggregate of duties, taxes and cesses leviable on such goods,
aduty of Customs including AIDC. However, following duties shall be excluded for
uting SWS.
(a) Safeguard Duty us 8B of the Customs Tariff Act, 1975.
(b) Countervailing duty us 9 of the Customs Tariff Act, 1975.
~ () Anti-dumping duty u/s 9A of the Customs Tariff Act, 1975.
(d) Social welfare surcharge itself on imported goods.
To ensure that imposition of cess does not lead to additional burden on the
msumers, the BCD rates have been lowered and the levy of SWS has been reviewed.
a aview to rescined the levy on certain items as notified beyond exemptions on gold
jad silver.
Accordingly, SWS would be attracted at normal rate 10% of basic customs duty.
Social welfare surcharge is not levied on “Integrated Tax” and “GST Compensation
8®” vide Notification No. 13/2018 Dated 02.02.2018.
Mustration
| Determine the customs duty payable under the Customs Tariff Act, 1975 including the
Mieguard Duty of 30% under section 8B of the said Act with the following details available on
fed
(a) Assessable value % 30,00,000
(b) Basic custom duty 10%
(©) Social Welfare Surcharge 10%
(@ Integrated tax under section 3(7) of the Customs Tariff Act, 1975 12%
%e: Ignore GST compensation cess. Mars, ane
Solution Computation of Customs Duty Payable
—__ Particular
‘Assessable value
i 0 x 10%)
Basic eustom duty @ 10% nto of Basic Custom Duty) 30,000
Social Welfare Surcharge (3,00,000 x 10%) (10%
ted tax u/s 3(7) of Customs Tariff Act (% 3
Si rd duty @ 30% on % 30,00,000
Saferuartoms duty payable ( 3,00,000 + € 30,000 + € 3,99,600 +* 9,00,000)
t i jelfare Surcharge @ 10% ‘of Basic Customs Duty. ‘i .
ree Sea tel fare aioe gum of total of Assessable Value, Basic Customs Duty and Social Welfare
Surcharge (30,00,000 + 8,00,000 + 30,000) = 33,30,000 @ 12%.
8, No Education Cess is leviable now.
EXEMPTION FROM CUSTOMS DUTY
Central Government’s Power to grant exemption 2
Article 265 of the Constitution provides that «No tax shall be levied or collected
except by authority of law”. The power of the Central Government to alter the duty rate
structure is known as delegated legislation and this power is always subject to
superintendence and check by Parliament. Pi
(a) General exemption : If the Central Government is satisfied that it is necessary
in the public interest so to do, it may, by notification in the Official Gazette, exempt
generally either absolutely or subject to such conditions (to be fulfilled before or after
Gearance) as may be specified in the notification, goods of any specified description from
the whole or any part of duty of customs leviable thereon.
(b) Special exemption : If the Central Government is satisfied that it is necessary
in the public interest so to do, it may, by special order in each case, exempt from payment
of duty, any goods on which duty is leviable only under circumstances of an exceptional
nature to be stated in such order. Further no duty shall be collected if the amount of
duty leviable is equal to, or less than, one hundred rupees.
‘Both the above mentioned exemptions may be granted by providing for the levy of
duty on such goods at a rate expressed in a form or method different from the form or
method in which the statutory duty is leviable.
Further, the duty leviable under such altered from or method shall in no case exceed
the statutory duty leviable under the normal form or method.
Rationale for grant of exemption
The power for grant of exemption vests with the Central Government subject to
the overall control of the Parliament. The Government on a rational basis may discretely
use this power and the exemptions may be based on any of the following bases :
(a) Moral grounds, where the duty should not be levied at all. Some of the
instances, which may be given, are;
(i) Where the goods do not reach the Indian soil at all.
(ii) Where the goods have reached the Indian soil but are not available for
ss consumption.
(iii) Where the goods get damaged or deteriorated in transit.
(b) Discretionary provision, where the exemption is used for controlling the
economy and industrial growth of the country.
Full exemption Ilustration of :
(i) Truck refrigeration units for the manufacture of refrigerated vans/trucks.
Gi) Tunnel boring machine for hydro-electric power projects.
Integrat 3,380,000 x 12%) = ——_____INTRopuction —
a (accessors pamulacture of battery chargers and hands-free head phones
‘ obi ,
Go Ground source heat jy
Vv) ecified capi, . :
hardwace Pital goods and raw materials for the manufacture of electronic
PROHIBITIONS OF IMPO
RTATION AND
collecting revenue for CoeXPORTATION OF GOODS (Sec. 11)
ue for Central Government by way of Customs Duty is, of course,
major purpose of Customs Act. However, j se is to prohibit or
strict legal imports and exports. Section TH of the Gootans Act, 1962, empowers
central. Government to prohibit the import or export of goods of any specified
by issuing Stn may, be absolute or conditional. Such prohibition can be
E atende eae ne ene objects, the Central Government may prohibit the
¢ a ie Be tienanee of the security of India; i
( intenance of public order and standards of decency or morality;
(3) the prevention of smuggling;
(4) the prevention of shortage of goods of any description;
(5) the conservation of foreign exchange and the safeguarding of balance of
payments;
(6) the prevention of injury to the economy of the country by the uncontrolled
import or export of gold or silver;
(7) the prevention of surplus of any agricultural product or the product of fisheries;
(8) the maintenance of standards for the classification, grading or marketing of
goods in international trade;
(9) the establishment of any industry;
(10) the prevention of serious injury to domestic production of goods of any description;
(11) the protection of human, animal or plant life or health;
(12) the protection of national treasures of artistic, historic or archaeological value;
(13) the conservation of exhaustible natural resources;
(14) the protection of patents, trademarks and copyrights;
(15) the prevention of deceptive practices;
(16) the carrying on of foreign trade in any goods by the State, or by a Corporation
owned or controlled by the State to the exclusion, complete or partial, of citizens
of India;
(17) the fulfilment of obligations under the Charter of the United Nations for the
maintenance of international peace and security;
(18) the implementation of any treaty, agreement or convention with any country;
(19) the compliance of imported goods with any laws which are applicable to similar
goods produced or manufactured in India;
(20) the prevention of dissemination of documents containing any matter which is
likely to prejudicially affect friendly relations with any foreign State or is
derogatory to national prestige;
(21) the prevention of the contravention of any law for the time being in force; and
(22) any other purpose conducive to the interests of the general public. 8
»ROHIBITED GOODS ee ;
PR 1 section 233) meaning “any
goods the import or export of which i subject (0 00 Fc Pods in respect of which
the conditions subject to w
been complied with ‘i Ail
‘This definition can be split as follows can
@ any goods imports/exports of which is subject to ae ition,
© under this act or any other law for the time being * its,
$ but does not include any such goods which complies with the conditions
Rainy midellions have been issued by Government of India ftom time to time 0!
in this regard, ‘Import’ of some items prohibited are (a) labels itopresss with designs fll
of currency notes, (b) dummy pistols, (c) explosives, (d) dead or alive animals and birds, “adi
Haearreotc deve, () monkeys from yellow fever areas, (g) arms and ammunition, th) j
