Indirect Taxes
- Customs
- Customs
- Advance Rulings
- Audit
- Background
- Classification of Goods under The Customs Tariff Act, 1975
- Customs Duty Drawbacks
- Date for Determining Rate of Duty and Valuation
- Demand, Recovery and Refund of Duty
- Interest
- Levy of Customs Duty
- Penalties
- Procedure of Import
- Prosecution
- Settlement of Cases
- Some Important Definitions
- Types of Duties
- Valuation of Goods
- Warehousing
- Goods and Services Tax (GST)
- Goods and Services Tax (GST)
- Accounts and Records
- Assessments and Audits
- Classification of Goods and Services
- E-Way Bill
- Input Tax Credit (ITC)
- Interest
- Penalties & Prosecution
- Place of Supply
- Refund
- Registration
- Relevant Circulars - Miscellaneous
- Returns
- Reverse Charge Mechanism under Goods and Services Tax (GST)
- Supply with Schedules
- Time of Supply
- Transitional Provisions
- Valuation of Supplies
- Maharashtra Profession Tax
- Maharashtra Value Added Tax
- Maharashtra Value Added Tax
- Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
- Service Tax
TYPES OF DUTIES
The Customs Tariff Act, 1975 (hereinafter referred to as the ‘Customs Tariff Act’) specifies the rate of customs duty. Various types of customs duties are:
|
Type of Duty |
Applicability |
|---|---|
|
Basic Customs Duty (BCD) |
Applicable on all imports except for exempted goods |
|
Integrated Goods and Services tax (IGST)4 |
This duty is levied to countervail the effect of GST in India and is leviable at the rate as per the provisions of IGST Act, 2017 on supply of like article in India, on the value of imported article as determined under Section 3 (8) or 3 (8A) of the Customs Tariff Act, 1975 |
|
Note: Not necessary that goods exempted from BCD would automatically be exempted from IGST, as BCD is levied by virtue of Section 12 of Customs Act, 1962 whereas IGST is levied as per Section 3(7) of the Customs Tariff Act, 1975 |
|
|
Goods and Services Tax (GST) Compensation Cess 5 |
This duty is levied to countervail the effect of GST Compensation Cess Act, 2017 in India and is leviable at the rate as per the provisions of GST (Compensation to States) Cess Act, 2017 on supply of like article in India, on the value of imported article as determined under Section 3 (10) or 3 (10A) of the Customs Tariff Act, 1975 |
|
Protective 6 / Safeguard Duty7 / Countervailing duty and Antidumping Duty 8 |
These duties are imposed to protect the interest of domestic industries established in India |
|
Social Welfare Surcharge (SWS) 9 |
With an object to provide and finance education, health and social security, SWS is levied @ 10% on import of goods (on the goods specified in the First Schedule to the Customs Tariff Act, 1975) except specified goods which are granted exemption from SWS |
With effect from 01 July, 2017, post implementation of GST, Countervailing duty10 (CVD) and Special Additional Customs Duty11 (SAD) have ceased to exist on the imported goods other than those on which central excise duty/VAT continues to be levied in GST regime.
A Cess named as Road and Infrastructure Cess12 (as Additional Duty of Customs) is charged at Rs. 9/- per litre13 on Petrol and HSD Oil for financing infrastructure projects.
Though the concept of various duties is explained above, for ease of understanding, structure of customs duties on imports in India is provided through one example below:
|
Particulars |
Amount in Rs. |
|
|---|---|---|
|
Cost of imported goods |
A |
100.00 |
|
Add: Basic Customs Duty (Assumed @ 7.5%) (7.5% on A) |
B |
7.50 |
|
(A+B) |
C |
107.50 |
|
Add: Social Welfare Surcharge14 @ 10% (10%*B) |
D |
0.75 |
|
(C+D) |
E |
108.25 |
|
Add: IGST (Assumed @ 18%) (18%*E) |
F |
19.49 |
|
(E+F) |
G |
127.74 |
|
Add: GST Compensation Cess (Assumed @ 15%) (15% on E) (D) |
H |
16.24 |
|
Total cost of imported goods (G+H) |
143.98 |
|
|
Effective Customs Duty (B + D + F + H) |
43.98 |
|
|
Note: Please note that IGST and GST compensation cess would be available as input tax credit under GST Laws subject to fulfilment of prescribed conditions |
||