Custom Duty
Custom Duty
Custom Duty
Introduction
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. The levy and the rate of customs duty in India are governed by the Customs Act 1962 and the Customs Tariff Act 1975. Imported goods in India attract basic customs duty, additional customs duty and education cess.
This countervailing duty is livable as additional duty on goods imported into the country and the rate structure of this duty is equal to the excise duty on like articles produced in India. The base of this additional duty is c.i.f. value of imports plus the duty levied earlier. If the rate of this duty is on ad-valorem basis, the value for this purpose will be the total of the value of the imported article and the customs duty on it (both basic and auxiliary).
Export Duties
Under Customs Act, 1962, goods exported from India are chargeable to export duty. The items on which export duty is chargeable and the rate at which the duty is levied are given in the customs tariff act,1975 as amended from time to time under Finance Acts. However, the Government has emergency powers to change the duty rates and levy fresh export duty depending on the circumstances.
Cesses
Cesses are leviable on some specified articles of exports like coffee, coir, lac, mica, tobacco (unmanufactured), marine products cashew kernels, black pepper, cardamom, iron ore, oil cakes and meals, animal feed and turmeric. These cesses are collected as parts of Customs Duties and are then passed on to the agencies in charge of the administration of the concerned commodities. Education cess on customs duty An education cess has been imposed on imported goods w.e.f. 9-7-2004. The cess will be 2% and wef 01.03.2007 2%+1% of the aggregate duty of customs excluding safeguard duty, countervailing duty, Anti Dumping Duty.
Protective Duties
Tariff Commission has been established under Tariff Commission Act, 1951. If the Tariff Commission recommends and Central Government is satisfied that immediate action is necessary to protect interests of Indian industry, protective customs duty at the rate recommended may be imposed under section 6 of Customs Tariff Act. The protective duty will be valid till the date prescribed in the notification.
Safeguard Duty
Central Government is empowered to impose 'safeguard duty' on specified imported goods if Central Government is satisfied that the goods are being imported in large quantities and under such conditions that they are causing or threatening to cause serious injury to domestic industry. Such duty is permissible under WTO agreement. Safeguard duty is a step in providing a need-based protection to domestic industry for a limited period, with ultimate objective of restoring free and fair competition
Export Procedures
Entry Outward Loading in conveyance can start after Entry Outward is given by customs officer. Export manifest/Export report Person in charge of conveyance is required to submit Export Manifest or Export Report. Registration with DGFT and EPC Exporter has to be obtaining IEC number from DGFT is advance. He should be registered with Export Promotion Council if he intends to claim export benefits.
Export Procedures
Third party exports Export can be by manufacturer himself or third party (i.e. by exporter on behalf of another). Merchant exporter means a person engaged in trading activity and exporting or intending to export goods. Registration of documents under Export Promotion Scheme Advance authorization, DEPB etc. should be registered if exports are under Export Promotion Scheme. Shipping Mill Export is required to submit Shipping Bill with required documents for obtaining permission to export.
Import Procedures
e-filing of documents Goods should arrive at customs port/airport only. Most of customs procedures are computerized. E-filing of documents is required. Import manifest or Import Report Person in charge of conveyance is required to submit Import Manifest or Import Report. Entry Inwards Goods can be unloaded only after grant of Entry Inwards. Risk Management System Self Assessment on basis of Risk Management System (RMS) has been introduced in respect of specified goods and importers.
Import Procedures
Bill of Entry for home consumption on payment of customs duty Importer has to submit Bill of Entry giving details of goods being imported, along with required documents. Electronic submission of documents is done in major ports. White Bill of Entry is for home consumption. Imported goods are cleared on payment of customs duty. Bill of Entry for warehousing Yellow Bill of Entry is for warehousing. It is also termed as into bond Bill of Entry as bond is executed. Duty is not paid and imported goods are transferred to warehouse where these are stored. Green Bill of Entry is for clearance from warehouse on payment of customs duty. It is for ex-bond clearance.
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