The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods. which is levied by Central Govt. India. and export of goods from. but its incidence is actually borne by the consumer of the goods and not by the importer or the exporter who pay it. Customs duty is a duty or tax. on import of goods into. 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. It is collected from the importer or exporter of goods.

Accordingly.  Section 12 of the Customs Act provides that duties of customs shall be levied at such rates as may be specified Under the Customs Tariff Act. the levy of duty on imports and exports is subject matter of Union and the parliament derives power to make laws related to the duties of customs. Entry 82 of List-IN (Union List) to the Schedule-VII reads as under 82 ‘Duties of Customs including Export duties’. Goods become liable to duty if there is import into and export from India. 1962 was enacted by the Parliament.  Thus. on goods imported into or exported from’ India. 1975 or any other law for the time being in force. . the Customs Act.


. The rate varies for different items from 5% to 40%. This is the basic duty levied under the Customs Act.

 This additional duty is levied under section 3 (1) of the Custom Tariff Act and is equal to excise duty levied on a like product manufactured or produced in India.1100/- .If the customs value of goods is Rs. 5000 and rate of basic customs duty is 10% and excise duty on similar goods produced in India is 20%. CVD will be Rs. Such duty is leviable on the value of goods plus basic custom duty payable. Example .

the Central Government may levy additional duty equal to the margin of dumping on such articles. This is known as dumping. Dumping duty can be levied on imports on such countries only if the Central Government proves that import of such goods in India at such low prices causes material injury to Indian industry. In order to prevent dumping. Sometimes. duty is finally determined. foreign sellers abroad may export into India goods at prices below the amounts charged by them in their domestic markets in order to capture Indian markets to the detriment of Indian industry. if the goods have been sold at less than normal value. . After the exact rate of dumping. Dumping duty can be imposed even when goods are imported indirectly or after changing the condition of goods. the Central government may vary the provisional rate of dumping duty.

 Protective duty may be cancelled or varied by notification. the Central Government may levy protective anti-dumping duties at the rate recommended on specified goods. The notification for levy of such duties must be introduced in the Parliament in the next session by way of a bill or in the same session if Parliament is in session. If the Tariff Commission set up by law recommends that in order to protect the interests of Indian industry. . Such notification must also be placed before Parliament for approval as above.

If the amount of subsidy or bounty cannot be clearly determined immediately. the Central Government may import additional import duty equal to the amount of such subsidy or bounty.In case a foreign country subsidises its exporters for exporting goods to India. difference may be collected or refunded. additional duty may be collected on a provisional basis and after final determination. as the case may be. .

The main purpose of this duty is to restrict exports of certain goods. . Such increase in duty must be by way of notification which is to be placed in the Parliament within the session and if it is not in session. Notification should be approved within 15 days. it should be placed within seven days when the next session starts. Such duty is levied on export of goods. The Central Government has been granted emergency powers to increase import or export duties if the need so arises. At present very few articles such as skins and leather are subject to export duty.

subject to exemption notifications. subject to any general exemption notification.Rate for additional duty (CVD) will be as mentioned in Central Excise Tariff Act. exemption to goods manufactured by SSI unit or goods manufactured without aid of power) is not considered while calculating CVD . It is needless to mention that if partial or full exemption has been granted by a notification.g. if any. applicable.There are different rates of duty for different goods imported from certain countries in terms of bilateral or other agreement with such countries which are called preferential rate of duties the duty may be percentage of the value of the goods or at specified rate.The rate of customs duty applicable will be as provided in Customs Act. if mentioned in the Tariff. the effective rate (as per notification) will apply and not the tariff rate (as mentioned in Customs Tariff).  Rate for additional duty . Provisions in respect of rate of duty are as follows:  Rate for Basic Customs duty . the preferential rate is applicable. Any specific exemption notification (e. In case of imports from preferential area.

the customs value is essential to determine the duty to be paid on an imported good. The Value may be either (a) ‘Value’ as defined in section 14 (1) of Customs Act or (b) Tariff value prescribed under section 14(2) of Customs Act.  Customs duty is payable as a percentage of ‘Value’ often called ‘Assessable Value’ or ‘Customs Value'. If the rate of duty is ad valorem. Customs valuation is a customs procedure applied to determine the customs value of imported goods. .

STORESStores means goods for use in a vessel or aircraft and includes fuel and spare parts and other articles of equipment.BAGGAGEThe term has not been defined as such. . whether or not for immediate fitting. [2(38)]. alcoholic drinks and goods imported through courier (d) Baggage does not include articles imported under an import licence for his own use or on behalf of others. imported by passenger or a member of a crew in his baggage (b) Un-accompanied baggage. if despatched previously or subsequently within prescribed period is also covered (c) baggage does not include motor vehicles. However. following may be noted: (a) Baggage means all dutiable articles.

Lastly. though not very visible. it may also be mentioned that small item imports/exports through couriers is fast catching up in this country and customs have made appropriate provisions by Regulations for ensuring that goods brought in by courier get customs cleared quickly – discharging duties where leviable on import before these are forwarded for delivery to the consignees. They have to ensure that these postal mail/packets/parcels enter into the country following the provisions of the Customs Act. The goods brought by parcels unless these are within permissible free gift limits or free sample limits have to be assessed to duties by customs & indicated to postal authorities. is necessary coordination with Postal authorities and giving customs clearances after appropriate checking on selective basis of various goods coming by post parcels. The regulations framed are reviewed to meet the changing needs of trade & industry/general public. etc. .POST/COURIERSAnother important role performed by Customs. The duties are collected before the postal authorities deliver the goods to the addressees.

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