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Types of Customs Duty, Types of Duties under Customs

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Types of Customs Duty, Types of Duties under Customs, We know that when goods are imported or exported from our country, customs duty is applicable on such transactions. But, unlike service tax or VAT which generally have no type, Customs duty has got various types. Let us study about each of them in a little detail. Now check more details about “Types of Customs Duty, Types of Duties under Customs” from below….

Types of Customs Duty, Types of Duties under Customs

Types of Customs Duty

1. BASIC CUSTOMS DUTY:

This is the standard rate at which the Basic Custom Duty is applicable. There are two sub-types of Basic Custom Duty. One is standard custom duty which is levied at the standard rates prescribed in the schedule. There is another rate which is called the Preferential Rate. It is leviable only for those countries which are specified in the schedule.

2. ADDITIONAL CUSTOMS DUTY:

In order to make it comparable with the goods produced in India, another duty called Additional Customs Duty is levied. It is also called as Countervailing Duty. It is levied at the same rate on which excise duty is applicable to similar products manufactured in India. Also, This CVD is applied on the Assessable Value which is obtained after adding Basic Custom Duty to the transaction value. That is:
Transaction Value = XXXX
Add: BCD + XX
Assessable Value= XXXX
Additional Customs Duty will be applicable on this Assessable Value.

3. SAFEGUARD DUTY:

In order to make sure that no harm is caused to the domestic industries of India, a safeguard duty is imposed to safeguard the interest of our local domestic industries. It is calculated on the basis of loss suffered by our local industries.

4. SPECIAL SAFEGUARD DUTY:

This is a subtype of the Safeguard Duty. Maximum loss to our local industries is suffered due to the products imported from The Republican of China. So, this duty is specifically imposed on the goods imported from China to safeguard our local industries.

5. ANTI-DUMPING DUTY:

There are countries which export goods to India at a price lower than the price they must be selling in their country. This is similar to dumping of goods in our country. In order to safeguard our local industries, another duty called anti-dumping is imposed on such goods.

6. COUNTERVAILING DUTY ON SUBSIDIZED ARTICLES:

Goods can be imported/ exported at a low price due to the subsidy given by the Government. In order to bring it on an equal track with similar goods in our country, a duty equivalent to the amount of subsidy granted by the Government is imposed on such subsidized goods. This is called as Countervailing Duty on Subsidized Articles.

7. SPECIAL CVD:

In order to combat with taxes like Service Tax, VAT, etc. and other taxes which are imposed from time to time, a special countervailing duty is imposed on such goods.

The reason why so many types of customs duties are imposed is to bring it on an equal track with the goods produced or manufactured in India. This is to promote fair trade & competition practices in our country.

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About CA Ridhi Dhoot

The writer is a Chartered Accountant & a Licentiate Company Secretary. You can reach out to her at [email protected]

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