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CUSTOMS DUTY

 
     Types of Duties     Warehousing      Export Incentives  
 

The Custom Act, 1962 levies custom duty on goods imported into or exported from India through sea, air or land. However, in general, no duties are levied on export of goods. “Import of goods” means any goods brought into India from a place outside India but does not include goods which have already been cleared for home consumption. “Export of goods” means any goods which are taken out of India to a place outside India.

Types of Duties:

The act contains various types of custom duties to be levied on importation of the articles. Following are the various types of custom duties:

  • Basic Duty: It is charge at the standard rate or at the preferential rate on import of goods from certain country.
  • Additional Custom Duty: It is equal to the amount of excise duty leviable on products if they manufacture in India.
  • Special Additional Custom Duty: It is levy to provide a level playing field to indigenous goods, which have to bear sales tax.
  • Anti Dumping Duty: It is levied to protect the domestic industry from unfair trade practice.

Warehousing:

As and when goods are imported into India, they are first required to be deposited in a notified warehouse till the custom duty is paid. Basically there are two types of warehouse viz. public warehouses and private warehouses.

 
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Export Incentives:

Various incentives are provided by the Government for the purpose of export promotion such as duty drawback, duty free import, import at concessional rate etc. Some of the schemes are as follows:

  • Duty exemption schemes which enable duty free import of inputs required for export production. Duty Exemption Scheme consists of (a) Advance Authorisation Scheme and (b) Duty Free Import Authorisation Scheme (DFIA)
  • Duty Remission Schemes which enable post export replenishment/ remission of duty on inputs used in the export product. Duty remission schemes consist of (a) DFRC (Duty Free Replenishment Certificate), (b) DEPB (Duty Entitlement Passbook Scheme) and (c) DBK (Duty Drawback Scheme)
  • Export Promotion Capital Goods Scheme for upgradation of technology of indigenous industry. Scheme provide for import of capital goods at concessional rate of duty.
  • Served from India Scheme: Wherein domestic service providers earning foreign exchange earn duty credit scrip equivalent to 10% of the foreign exchange earned by them in the preceding financial year
  • Target Plus: Under this scheme various export incentives are given to the assessee if his export exceeds the prescribed limit.
 
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