Custom duty is a type of indirect tax that the Indian government levied on all the goods that are imported within India and also some of the products that are exported out. custom Duties that the Indian government levy on products are nearly around 10% of the cost of products. The duties levied when goods are imported within the country are termed as import duty on the other hand duties levied on goods that are exported outside the country are termed as export duty. The main motive behind these indirect taxes in the form of customs duties is to raise the revenue for the country. Nowadays Custom Duty has been replaced by the Goods and Services Tax which is also known as GST and is applicable from 1 July 2017 in India
Indian custom duty is defined under the Customs Act, 1962, and under this act the Indian government levy duty and set rules and regulations and the procedure for the import and the exports of goods, restrict some goods from import and export, set rules for any offenses, penalties, etc. Indian custom duty department falls under the Central Board of Excise & Customs (CBEC) which is a division of the Department of Revenue of the Ministry of Finance.
CBEC department makes all the important rules and policies regarding custom duties, and also takes necessary administrative decisions like how to raise taxes from import and export, how to stop goods from smuggling.
Types of custom duty
The custom duty applies to almost all the imported products in India and this duty is also universally levied on products. But the rate is different for different products and based on the categories of goods these are of the following types.
Basic custom duty
Additional Customs Duty (Countervailing Duty (CVD)
Protective Duty
Education cess
Anti-dumping duty
Safeguard duty
Calculation of Import /Export custom duty in India
BCD is the normal method use by the Indian government to calculate taxes. The rules and regulations for BCD are being regulated by the government periodically. Amount to pay as custom duty is decided by CBEC which is based on several factors such as weight, price, dimensions of goods, etc.
The rate of customs duty may vary from 0 to 100% which is different from product to product. The rule-based on which valuation of product tax is done by the Indian custom duty department is Custom Valuable Rules, 2007. The method for calculations for custom duty charges in India are done as follows:-
Comparative Value Method:- In this method, we compare the sale value of a product to its similar product.
Deductive value method:- This method uses the sale price of the products initially in any country.
Computed value method:- This method compares the cost of raw material, manufacturing cost, and the last profit earned by it.
The fallback method:- This method is based on the computed value method with some changes.
Payment of custom duty in India
In India, you can pay customs duty online by registering yourself on a portal ICEGATE. After registration, you are asked to fill in all the details and by following these simple steps one can easily pay import and export customs duties. You can also get information regarding import export custom duty charges for this website.
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