| # Overview of Customs This functionality is specific for India. Custom duty is levied on goods that are imported at the rate, specified in the Customs Tariff Act. The objectives of imposing the custom duties are as follows: To raise revenue for the central government. To regulate imports and exports. To protect Indian industries from foreign products. Types of Custom duties Basic custom duty The duty levied on goods imported to India. The duty is calculated on the Assessable value or on the MRP (what ever applicable). Example, 12.5% on assessable value. Education Cess on Customs The duty levied on basic custom duty to generate revenue for basic education in the country. Example, 2% on Customs. Secondary and Higher Education Cess on Customs The duty levied on basic custom duty to generate revenue for secondary and higher education in the country. Example, 2% on Customs. Countervailing Duty (aka CVD) or Additional Custom duty The duty levied on imported goods, equal to the excise duty amount levied on the goods manufactured in India. The main purpose of this duty is to make the imported goods more expensive and to reduce the competitive advantage over the local products. The duty is payable on assessable value plus basic customs duty. If the product is covered under MRP(maximum retail price) provisions, then duty is payable on MRP. Example 16.32% (including education cess) . Education Cess on CVD The duty levied on countervailing duty to generate revenue for basic education in the country. Example 2% on CVD. Secondary and Higher Education Cess on CVD The duty levied on countervailing duty to generate revenue for secondary and higher education in the country. Example 1% on CVD. Additional Duty of Customs The duty levied on the aggregate of the following values: Assessable value Basic custom duty Additional customs duty or Countervailing duty The duty amount must not exceed 4 per cent of the item's value. Heavy customs duty The duty levied on the machinery imported for projects. Concessions are provided on the basic custom duty paid because, the initial project cost can be high. The duty is also referred as project imports. |