G.S.T.

Prof. G. S. Popli
Ex. Director & Professor
Delhi School of Professional Studies & Research, Delhi
 INTRODUCTION
• TAX- A TAX IS A COMPULSORY FINANCIAL CHARGE OR SOME OTHER TYPE
OF LEVY IMPOSED ON A TAXPAYER (AN INDIVIDUAL OR LEGAL ENTITY) BY A
GOVERNMENTAL ORGANIZATION IN ORDER TO FUND GOVERNMENT
SPENDING AND VARIOUS PUBLIC EXPENDITURES (REGIONAL, LOCAL, OR
NATIONAL).
• DIRECT TAX
• INDIRECT TAX
DIRECT TAX INDIRECT TAX
DIFFERENCE BETWEEN DIRECT
AND INDIRECT TAX
 IMPORTANT TERMS
• "GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT" MEANS THE GOODS
AND SERVICES TAX (COMPENSATION TO STATES) ACT, 2017;
• FRANCE WAS THE FIRST COUNTRY TO IMPLEMENT THE GST IN 1954, AND SINCE THEN
AN ESTIMATED 160 COUNTRIES HAVE ADOPTED THIS TAX SYSTEM IN SOME FORM OR
ANOTHER. SOME OF THE COUNTRIES WITH A GST INCLUDE CANADA, VIETNAM,
AUSTRALIA, SINGAPORE, UNITED KINGDOM, MONACO, SPAIN, ITALY, NIGERIA,
BRAZIL, SOUTH KOREA, AND INDIA.
• "GOODS" MEANS EVERY KIND OF MOVABLE PROPERTY OTHER THAN MONEY AND
SECURITIES BUT INCLUDES ACTIONABLE CLAIM, GROWING CROPS, GRASS AND
THINGS ATTACHED TO OR FORMING PART OF THE LAND WHICH ARE AGREED TO BE
SEVERED BEFORE SUPPLY OR UNDER A CONTRACT OF SUPPLY;
• "SERVICES" MEANS ANYTHING OTHER THAN GOODS, MONEY AND SECURITIES BUT
INCLUDES ACTIVITIES RELATING TO THE USE OF MONEY OR ITS CONVERSION BY
CASH OR BY ANY OTHER MODE, FROM ONE FORM, CURRENCY OR DENOMINATION,
TO ANOTHER FORM, CURRENCY OR DENOMINATION FOR WHICH A SEPARATE
CONSIDERATION IS CHARGED;
 CENTRAL

INDIRECT TAXES
EXCISE MANUFACTURE
TYPES OF DUTY(CG)
CUSTOMS IMPORT
DUTY(CG) &EXPORT

VAT/CST/SALES
SALES
TAX(SG)

PROVISION OF
SERVICE TAX
SERVICE
 CENTRAL EXCISE DUTY
• EXCISE DUTY WAS FIRST LEVIED ON SALT IN 1870, FOLLOWED BY
COTTON YARN IN 1894, MOTOR SPIRIT 1917, AND KEROSENE IN 1922.
• CENTRAL EXCISE DUTY WAS A TAX IMPOSED BY THE GOVERNMENT
ON ALL THE GOODS MANUFACTURED OR PRODUCED IN THE COUNTRY.
• IT WAS REGULATED BY TWO ACTS:
a) THE CENTRAL EXCISE ACT (CEA)1944;
b) THE CENTRAL EXCISE TARIFF ACT (CETA)1985.
• THE CEA, 1944, COVERED THE PROVISIONS ON TAX, VALUATIONS AND
ADMINISTRATIONS WHEREAS;
• CETA, 1985, CARRIED COMPLETE LIST OF EXCISABLE GOODS AND
APPLICABLE TAX RATES IN EACH CASE.
PRE- INDEPENDENCE TAXES
POST- INDEPENDENCE TAXES
PROCEDURE FOR EXCISE REGISTRATION AND
DOCUMENTS NEEDED

• HTTPS://CBIC-GST.GOV.IN/PDF/ADVISORY/ACES-INTEGRATION/ADVISORY-NEW-
CE-TAXPAYER-REGISTRATION-240519.PDF
• WWW.CBIC-GST.GOV.IN
 DOCUMENTS REQUIRED FOR REGISTRATION WITH CENTRAL
EXCISE DEPARTMENT
ALL THE DOCUMENTS SHOULD BE SELF ATTESTED.
1. PAN CARD COPY OF THE COMPANY/FIRM
2. PAN CARD COPY OF AUTHORIZED SIGNATORY
3. GROUND PLAN OF FACTORY (WHICH SHOULD ALSO PROVIDE DESCRIPTION OF BOUNDARIES OF PREMISES TO BE REGISTERED)
4. LIST OF DIRECTORS/PARTNERS
5. MEMORANDUM AND ARTICLES OF ASSOCIATION IN CASE OF COMPANY OR PARTNERSHIP DEED IN CASE OF PARTNERSHIP FIRM
6. GENERAL POWER OF ATTORNEY (IN CASE APPLICATION IS SIGNED BY AUTHORIZED AGENT)
 THE DEPARTMENT MAY REQUIRE CERTAIN ADDITIONAL DOCUMENTS, SOME OF WHICH ARE MENTIONED HERE UNDER:
7. PAN CARD COPY OF DIRECTORS/PARTNERS OTHER THAN SIGNATORIES
8. ADDRESS PROOFS OF THE FACTORY PREMISES LIKE:
1. COPY OF PURCHASE AGREEMENT ALONG WITH ELECTRICITY BILL, WATER BILL ETC., IF FACTORY IS OWNED

2. COPY OF LEASE AND LICENSE AGREEMENT ALONG WITH ELECTRICITY BILL, WATER BILL ETC., IF FACTORY IS TAKEN ON LEASE
3. 'NO OBJECTION CERTIFICATE' FROM THE LICENSOR AND LAST PAID RENT RECEIPT MAY ALSO BE REQUIRED
4. RESIDENCE PROOF OF DIRECTORS/PARTNERS
5. REGISTRATION CERTIFICATE UNDER ANY OTHER LAWS, IF ANY ISSUES:
a) VALIDITY OF CENTRAL EXCISE REGISTRATION CERTIFICATE
b) ONCE REGISTRATION CERTIFICATE IS GRANTED, IT HAS A PERMANENT STATUS UNLESS IT IS SUSPENDED OR REVOKED BY THE
APPROPRIATE AUTHORITY IN ACCORDANCE WITH LAW OR IS SURRENDERED BY THE PERSON OR COMPANY CONCERNED.
 V.A.T
• VALUE ADDED TAX IS THE TAX CHARGED ON THE AMOUNT BY WHICH THE
VALUE OF A GOOD HAS BEEN MODIFIED AT EACH STAGE OF ITS PRODUCTION
OR DISTRIBUTION.
• VAT WORKS ON THE PRINCIPLE THAT WHEN RAW MATERIAL PASSES
THROUGH VARIOUS MANUFACTURING STAGES AND MANUFACTURED
PRODUCT PASSES THROUGH VARIOUS DISTRIBUTION STAGES, TAX SHOULD
BE LEVIED ON THE ‘VALUE ADDED’ AT EACH STAGE AND NOT ON THE GROSS
SALES PRICE.
• GOVERNMENT COLLECTS TAX AS SOON AS THE SALE IS MADE.
• VAT IS A CONSUMPTION TAX BECAUSE IT IS BORNE ULTIMATELY BY THE
FINAL CONSUMER, THE TAX PAID BY THE DEALER IS PASSES ONTO THE
BUYER.
CENVAT MODVAT PROVISIONS

Manufacturing of
EXCISE DUTY goods
CENVAT and
CENVAT
CREDIT
Providing of
SERVICE TAX
services
INTRODUCTION TO CUSTOM DUTIES, ITS
TYPES, CALCULATION AND RELATED
ISSUES

• CUSTOMS DUTY IS A TAX CHARGED ON THE VALUE OF GOODS IMPORTED

AND EXPORTED.
• CUSTOM DUTY IS IMPOSED UNDER CUSTOMS ACT 1962
• THE POWER TO ENACT RULES, LAWS AND PROVISION RELATED TO CUSTOMS
IS WITH THE PARLIAMENT WHICH IS GIVEN THROUGH ENTRY 83 OF LIST I
OF VII SCHEDULE READ WITH ARTICLE 246 OF THE CONSTITUTION OF
INDIA.
SOURCES OF PROVISIONS REGARDING TO
CUSTOM DUTY- 1. CUSTOM ACT 1962

• THIS ACT CONTAINS THE PROVISIONS REGARDING LEVY OF CUSTOM DUTY,

VALUATION AND ITHER SIMILAR PROVISIONS.
• THIS ACT APPLIES TO WHOLE INDIA
• THIS ACT ENLISTS DEFINITIONS AND PROVISIONS REGARDING BAGGAGE,
EXEMPTIONS, DUTY DRAWBACK, ADJUDICATION, APPEALS, REVIEW,
REVISION, OFFICERS OF CUSTOMS, PENALTIES, GOODS IN TRANSIT,
WAREHOUSING, PROVISIONS RELATED TO SPECIAL ECONOMIC ZONES AND
MISCELLANEOUS PROVISIONS.
2. CUSTOMS TARIFF ACT 1975

• THIS ACT CONTAINS DETAILS OF ALL GOODS AND THE RATE OF DUTY FOR
IMPORT AS WELL EXPORT.
• THIS ACT APPLIES TO WHOLE INDIA
• THE RATES OF THE DUTY REGARDING GOODS EXPORTED AND IMPORTED
ARE GIVEN IN FIRST AND SECOND SCHEDULE.
• THIS ACT ALSO GIVES EMERGENCY POWERS TO THE CENTRAL GOVERNMENT
TO IMPOSE OR INCREASE EXPORT/IMPORT OR SAFEGUARD DUTIES.
3.
a) CUSTOMS RULESEXCISE DUTIES DRAWBACK RULES, 1995
CUSTOMS AND CENTRAL
b) BAGGAGE RULES, 1998
c) CUSTOM VALUATION (DETERMINATION OF VALUE IMPORTED GOODS) RULES,
2007
d) CUSTOM VALUATION (DETERMINATION OF VALUE EXPORTED GOODS) RULES,
2007

4. CIRCULARS AND NOTIFICATIONS : CENTRAL BOARD OF INDIRECT

TAXES AND CUSTOMS (CBIC) FROM TIME TO TIME ISSUES CERTAIN CIRCULARS
AND NOTIFICATIONS RELATED TO THE PROVISIONS ENLISTED IN CUSTOM ACTS.

5. REGULATIONS UNDER CUSTOM ACT: CBIT AND CUSTOMS HAS POWER TO

MAKE REGULATIONS, CONSISTENT WITH PROVISIONS OF THE ACT.
6. JUDICIAL PRONOUNCEMENTS

• THE GAPS IN THE ACT ARE USUALLY FILLED BY THE JUDICIAL

PRONOUNCEMENTS.
• THE DECISIONS TAKEN BY COURTS IN RELATION TO THE SAID ACT AT TIMES
PROVIDE THE CRITERIA OF HOW A PARTICULAR SITUATION CAN BE DEALT
WITH.
BASIC CONCEPTS OF CUSTOM DUTY AND LAW

CUSTOMS AREA: CUSTOMS AREA MEANS THE AREA OF CUSTOMS STATION OR A WAREHOUSE
AND INCLUDES ANY AREA IN WHICH IMPORTED GOODS OR EXPORT GOODS ARE ORDINARILY
KEPT BEFORE CLEARANCE BY CUSTOMS AUTHORITIES.
• IT IS USUALLY A DOCK AREA WHERE GOODS ARE KEPT JUST THE TIME BEFORE ITS LOADING
OR UNLOADING.
PERSON IN CHARGE: GOODS ARE IMPORTED OR EXPORTED THROUGH LAND, AIR OR WATER
AND THUS THE PERSON IN CHARGE IMPORTING OR EXPORTING GOODS THOUGH THESE MODES
WILL BE:
a) IN RELATION TO A VESSEL, THE MASTER OF THE VESSEL
b) IN RELATION TO AN AIRCRAFT, THE COMMANDER OR PILOT-IN-CHARGE OF THE AIRCRAFT
c) IN RELATION TO A RAILWAY TRAIN, THE CONDUCTOR, GUARD OR OTHER PERSON HAVING
THE CHIEF DIRECTION OF THE TRAIN.
d) IN RELATION TO ANY OTHER CONVEYANCE, THE DRIVER OR OTHER PERSON-IN-CHARGE OF
THE CONVEYANCE.
 BASIC CONCEPTS OF CUSTOM DUTY AND LAW
PROPER OFFICER: WILL BE PRINCIPAL COMMISSIONER OF CUSTOMS OR COMMISSIONER OF CUSTOMS OR ANY
OFFICER APPOINTED BY CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS TO PERFORM ANY FUNCTIONS
ENLISTED IN THE CUSTOMS ACT.
ADJUDICATING AUTHORITY: MEANS ANY AUTHORITY COMPETENT TO PASS ANY ORDER OR DECISION UNDER
THIS ACT. IT DOES NOT
INDIAN CUSTOMS WATER: ACC.TO SEC 2(28) OF CUSTOMS ACT 1962, INDIAN CUSTOMS WATERS MEANS THE
WATER EXTENDING INTO SEA UP TO THE LIMIT OF EXCLUSIVE ECONOMIC ZONE.
THUS IT INCLUDES: CONTINENTAL SHELF, EXCLUSIVE ECONOMIC ZONE AND OTHER MARITIME ZONES ACT, 1976
AND INCLUDES BAY, GULF, HARBOUR, CREEK OR TIDAL RIVER.
INDIAN CUSTOM WATERS COVER BOTH TERRITORIAL WATERS OF INDIA AND EXCLUSIVE ECONOMIC ZONE-VIDE
AMENDMENT THROUGH FINANCE ACT 2018.
• TERRITORIAL WATERS OF INDIA IS THE DISTANCE OF 12 NAUTICAL MILES FROM THE BASE LINE.
• EXCLUSIVE ECONOMIC ZONE IS THE DISTANCE OF 200 NAUTICAL MILES FROM THE NEAREST POINT OF BASE
LINE.
• HIGH SEAS: AN AREA BEYOND 200 NAUTICAL MILES FROM THE BASE LINE OF INDIA IS KNOWN AS HIGH SEAS.
CUSTOMS OFFICER HAS THE POWER TO SEARCH ANY PERSON WHO HAS LANDED FROM/ABOUT TO BOARD/ IS ON
BOARD ANY VESSEL WITHIN INDIAN CUSTOM WATERS AND WHO HAS SECRETED ABOUT HIS PERSON, ANY GOODS
LIABLE TO CONFISCATION OR ANY DOCUMENTS RELATING THERTO (SECTION 100 OF THE CUSTOMS ACT, 1962)
LEVY OF CUSTOM DUTY
• SECTION 12 IS THE CHARGING SECTION OF THE CUSTOMS ACT.
• DUTIES OF CUSTOMS SHALL BE LEVIED ACCORDING TO THIS
SECTION AND ACC. TO THE RATES SPECIFIED UNDER THE CUSTOMS
TARIFF ACT, 1975 OR ANY OTHER LAW FOR THE TIME IN FORCE, ON
THE GOODS WHICH ARE IMPORTED TO INDIA OR GOODS WHICH ARE
EXPORTED OUT OF INDIA.
• HOWEVER, THE GOODS IMPORTED BY NAVY, SPECIFIC EQUIPMENT
REQUIRED BY POLICE, MINISTRY OF DEFENCE, COASTAL GUARD
ETC. ARE FULLY EXEMPT FROM THE CUSTOM DUTY Y THE VIRTUE
OF SPECIFIC NOTIFICATIONS SUBJECT TO FULFILMENT OF
CONDITIONS AND/OR PROCEDURE ENLISTED IN SUCH
NOTIFICATION.
 TYPES OF CUSTOM DUTIES

• BASIC CUSTOMS DUTY

• ANTI-DUMPING DUTY
• SAFEGUARD DUTY
• PROTECTIVE DUTY
OTHER IMPORTANT TERMS/DUTIES
• INTEGRATED GOODS AND SERVICES TAX (IGST)
• SPECIAL COUNTERVAILING DUTY
 BASIC CUSTOM DUTY

• DETERMINATION OF DUTY WHERE GOODS CONSIST OF ARTICLES LIABLE TO

DIFFERENT RATES OF DUTY
• SECTION 19 OF CUSTOMS ACT PROVIDE THE FOLLOWING GUIDELINES TO
DETERMINE CUSTOMS DUTY-
1. CD WILL BE CHARGED AT DIFFERENT APPLICABLE RATES BASED ON SUCH BREAK-
UP PROVIDED BY THE IMPORTER
2. IN CASE BREAK-UP IS NOT AVAILABLE (OR THE ASSESSING OFFICER IS NOT
SATISFIED WITH THE EVIDENCE GIVEN BY THE IMPORTER) DIFFERENT ITEMS ARE
CHARGEABLE AT DIFFERENT RATES (HIGHEST RATES ARE APPLICABLE)
3. IF ACCESSORIES AND SPARE PARTS FOR MAINTENANCE/REPAIRING ARE
COMPULSORILY SUPPLIED WITH THE ARTICLE AND IF NO SEPARATE CHARGE IS
MADE, ACCESSORIES WILL BE CHARGEABLE AT THE SAME RATE AS THE ARTICLE.
LINK PROVIDED FOR FIRST AND SECOND
SCHEDULE OF CENTRAL EXCISE TARIFF ACT
1985

HTTPS://WWW.CBIC.GOV.IN/HTDOCS-CBEC/EXCISE/CXT2015-16/CX
T-1516-IDX
• IF AN ARTICLE IS EXPORTED ANTI-DUMPING DUTY
BY AN EXPORTER/PRODUCER FROM OUTSIDE INDIA TO INDIA AT
LESS THAN ITS NORMAL VALUE, THE CENTRAL GOVT. CAN IMPOSE ANTI-DUMPING DUTY ON
SUCH TRANSACTION.
• IT CAN BE IMPOSED BY ISSUE OF A NOTIFICATION UNDER SECTION 9A OF THE CUSTOMS
TARIFF ACT.
• THE ANTI-DUMPING DUTY CANNOT EXCEED “MARGIN OF DUMPING” IN RELATION TO SUCH
ARTICLES
• MARGIN OF DUMPIG = NORMAL VALUE – EXPORT VALUE
• OTHER IMPORTANT POINTS-
1. ADD IS GENERALLY IMPOSED IN CASES WHERE INDIAN MANUFACTURERS ARE
MANUFACTURING SIMILAR ARTICLES.
2. IT MAY BE IMPOSED ON PROVISIONAL. AFTER ADD IS FINALLY DETERMINED BY THE GOVT.,
ANY EXTRA AMOUNT COLLECTED MAY BE REFUNDED OR ADDITIONAL AMOUNT MAY BE
RECOVERED.
3. EDUCATION CESS, SECONDARY & HIGHER EDUCATION CESS AND SOCIAL WELFARE
SURCHARGE ARE NOT APPLICABLE.
 ANTI-DUMPING DUTY (CONTD..)
5. SECTION 9B(1)(B) OF CUSTOMS TARIFF ACT PROVIDES RESTRICTIONS ON THE POWER OF THE
GOVT. OF IMPOSING ADD IN THE CASE OF IMPORT FROM A WTO MEMBER COUNTRY OR FROM A
COUNTRY WITH WHOM INDIA HAS A MOST FAVOURED NATION AGREEMENT. IN SUCH CASES,
ADD CAN BE IMPOSED ONLY IF CG DECLARES THAT IMPORT OF SUCH ARTICLES IN INDIA
CAUSES MATERIAL INJURY TO INDUSTRY ESTABLISHED IN INDIA OR MATERIALLY RETARDS THE
ESTABLISHMENT OF ANY INDUSTRY IN INDIA.
6. ORDER OF IMPOSING ADD IS APPEALABLE TO CUSTOMS EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL (CESTAT).
7. ADD SHALL BE IN FORCE FOR A PERIOD OF 5 YEARS FROM THE DATE OF ITS IMPOSITION AND
CAN BE EXTENDED FOR A FURTHER PERIOD OF 5 YEARS.
8. ADD SHALL NOT BE LEVIABLE ON ARTICLES IMPORTED BY A 100% EOU UNLESS SPECIFICALLY
MADE APPLICABLE FOR SUCH UNITS AS PER SECTION 9A.
9. WHEN ONE COUNTRY EXPORTS GOODS TO ANOTHER COUNTRY AT A PRICE LOWER THAN ITS
NORMAL VALUE, DUMPING OCCURS. SINCE THIS IS AN UNFAIR TRADE PRACTICE HAVING A
DISTORTIVE EFFECT AS INTERNATIONAL TRADE, ADD IS A MEASURE TO RECTIFY THE SITUATION
ARISING OUT OF DUMPING OF GOODS.
 SAFEGUARD DUTY
• UNDER SECTION 8B OF THE CUSTOMS TARIFF ACT, THE CG CAN IMPOSE SAFEGUARD
DUTY. THIS DUTY CAN BE IMPOSED OF SPECIFIC IMPORTED GOODS IF THE CG IS SATISFIED
THAT THE GOODS ARE IMPORTED IN SUCH INCREASE QUANTITIES AND UNDER SUCH
CONDITIONS THAT THEY ARE CAUSING (THREATENING) SERIOUS INJURY TO DOMESTIC
INDUSTRY.
• OTHER IMPORTANT POINTS-
1. FOR THIS PURPOSE, A NOTIFICATION HAS TO BE ISSUED AFTER CONDUCTING AN INQUIRY.
2. THE DUTY, ONCE IMPOSED, IS VALID FOR 4 YRS (IT MAY BE REVOKED EARLIER). THE
PERIOD 4 YRS CAN BE EXTENDED BY THE CG. HOWEVER, THE AGGREGATE PERIOD
CANNOT BE MORE THAN 10 YEARS.
3. IN CASE OF IMPORTS FROM ANY DEVELOPING COUNTRY, SAFEGUARD DUTY CAN BE
IMPOSED ONLY IF SHARE OF IMPORTS FROM THAT COUNTRY EXCEED 3% OF TOTAL
IMPORTS OF THAT ARTICLE IN INDIA. IF AN ARTICLE ORIGINATES FROM MORE THAN ONE
DEVELOPING COUNTRIES AND IF IMPORTS FROM EACH DEVELOPING COUNTRY IS LESS
THAN 3%, SD CAN BE IMPOSED IF IMPORTS FROM ALL SUCH DEVELOPING COUNTRIES
TAKEN TOGETHER EXCEEDS 9% OF TOTAL IMPORTS OF THAT ARTICLE IN INDIA.
4. THE CG CAN IMPOSE PROVISIONAL SD, PENDING FINAL DETERMINATION UP TO 200 DAYS.
 SAFEGUARD DUTY (CONT..)

5. SD IS NOT APPLICABLE FOR IMPORTS BY EOU OR SEZ UNITS (UNLESS THE

NOTIFICATION IMPOSING SD SPECIFICALLY PROVIDES THAT IT IS APPLICABLE
IN SUCH CASES AS PER SECTION 8B).
6. ADD AND SD ARE NOT CONSIDERED FOR CALCULATING CVD OR SPECIAL
CVD.
7. EDUCATION CESS, SECONDARY & HIGHER EDUCATION CESS AND SOCIAL
WELFARE SURCHARGE ARE NOT PAYABLE UNDER SECTION 8B.
8. SD IS PRODUCT SPECIFIC, I.E., IT IS APPLICABLE ONLY FOR CERTAIN
ARTICLES IN RESPECT OF WHICH IT IS IMPOSED.
9. AS PER SECTION 8C, IN CASE GOODS ARE IMPORTED IN INCREASED
QUANTITIES FROM CHINA, A SPECIFIC SD IS IMPOSED/LEVIED.
PROTECTIVE DUTY
• AS PER SECTIONS 6 AND 7, PROTECTIVE DUTY IS EFFECTIVE FROM THE DATE
SPECIFIED IN THE FIRST SCHEDULE OF THE CUSTOMS TARIFF ACT.
• IT IS A DUTY IMPOSED ON IMPORTED GOODS FOR PROTECTION OF INTERESTS OF
ANY INDUSTRY IN INDIA ON RECOMMENDATION OF TARIFF COMMISSION.
COUNTERVAILING DUTY (CVD)
THIS DUTY IS IMPOSED BY THE CENTRAL GOVERNMENT WHEN A COUNTRY IS
PAYING THE SUBSIDY TO THE EXPORTERS WHO ARE EXPORTING GOODS TO INDIA.
THIS AMOUNT OF DUTY IS EQUIVALENT TO THE SUBSIDY PAID BY THEM. THIS DUTY
IS APPLICABLE UNDER SEC 9 OF THE CUSTOMS TARIFF ACT.
ADDITIONAL CUSTOMS DUTY OR SPECIAL CVD
IN ORDER TO EQUALIZE IMPORTS WITH LOCALS TAXES LIKE SERVICE TAX, VAT
AND OTHER DOMESTIC TAXES WHICH ARE IMPOSED FROM TIME TO TIME, A
SPECIAL COUNTERVAILING DUTY IS IMPOSED ON IMPORTED GOODS. HENCE,
IS IMPOSED TO BRING IMPORTS ON AN EQUAL TRACK WITH THE GOODS PRODUCED
OR MANUFACTURED IN INDIA. THIS IS TO PROMOTE FAIR TRADE & COMPETITION
PRACTICES IN OUR COUNTRY.
HOW TO FIND OUT VALUE FOR THE PURPOSE OF CUSTOMS ACT
• CUSTOMS DUTY IS PAYABLE AS A % OF “ASSESSABLE VALUE”.
• THE FOLLOWING STEPS ARE GIVEN TO CALCULATE THE ASSESSABLE
VALUE-

• Transaction value (it is FOB and a few adjustments)

Step 1

• ADD: Cost of transport, loading, unloading and handling charges associated with the
Step 2 delivery of imported goods to the place of importation

• ADD: Cost of Insurance cover to the place of importation (if cost of insurance cover is not
Step 3 ascertainable, it will be 1.125% of FOB)

• Total (Step 1+ Step 2 + Step 3) it may be termed as CIF (it is generally known as
Step 4 assessable value)
 SALES TAX
• A SALES TAX IS A CONSUMPTION TAX IMPOSED BY THE GOVERNMENT ON THE SALE
OF GOODS. A CONVENTIONAL SALES TAX IS LEVIED AT THE POINT OF SALE, COLLECTED
BY THE RETAILER, AND PASSED ON TO THE GOVERNMENT. 
• IN INDIA, POLICIES REGARDING SALES TAX ARE GOVERNED BY THE CENTRAL SALES TAX
ACT, 1956.
• TAXES ON SALES OR PURCHASES OF GOODS IN THE COURSE OF INTER-STATE TRADE OR
COMMERCE WERE BROUGHT EXPRESSLY WITHIN THE PURVIEW OF THE LEGISLATIVE
JURISDICTION OF PARLIAMENT;
• ACCORDINGLY THE CENTRAL SALES TAX (CST) ACT, 1956 WAS ENACTED WHICH CAME
INTO FORCE ON 05.01.1957.
• ORIGINALLY, THE RATE OF CST WAS 1%, WHICH WAS INCREASED FIRST TO 2%, THEN TO 3%
AND W.E.F. 1ST JULY, 1975 TO 4%. THE CST ACT, 1956 ACT PROVIDES FOR DECLARATION OF
CERTAIN GOODS TO BE OF SPECIAL IMPORTANCE IN INTER-STATE TRADE OR COMMERCE
AND LAY DOWN RESTRICTIONS ON THE TAXATION OF SUCH ITEMS.
• THE ENTIRE REVENUE ACCRUING UNDER LEVY OF CST IS COLLECTED AND KEPT BY THE
STATE IN WHICH THE SALE ORIGINATES. THE ACT EXCLUDES TAXATION OF IMPORTS AND
EXPORTS.
 SERVICE TAX
A TAX LEVIED ON THE SERVICES PROVIDED BY AN ENTITY AND PAID BY THE
RECIPIENT OF THE SERVICES. SERVICE TAX FALLS UNDER THE AMBIT OF THE
CENTRAL GOVERNMENT, I.E. CENTRAL GOVERNMENT IT IS COLLECTED BY
AND DEPOSITED WITH THE CENTRAL GOVERNMENT.
LINK PROVIDED FOR MORE INFORMATION:
HTTPS://WWW.YOUTUBE.COM/WATCH?V=JMKZOVHDA28
• THE PROVISIONS RELATING TO SERVICE TAX WERE BROUGHT INTO
FORCE WITH EFFECT FROM JULY 1, 1994 VIDE CHAPTER V OF THE
FINANCE ACT, 1994. IT EXTENDS TO THE WHOLE OF INDIA EXCEPT THE
STATE OF JAMMU AND KASHMIR.
• LATER ON IN 2012, THE RESTAURANT AND HOTELS WERE ALSO INCLUDED IN
THE LIST OF SERVICE PROVIDER.
• SERVICE TAX RATE IN 2016 WAS 14.5% INCLUDING SB CESS AS 0.5% BUT IN
2017 BUDGET, IT INCREASES TO 15% BY ADDING 0.5% KRISHI KALYAN (KK)
CESS.