Customs Duty
What does customs duty mean?
All imported goods and some goods that are exported outside of the country are subject to customs duty, an indirect tax. Taxes placed on the import and export of goods are referred to as import tariffs and export duties, respectively. Globally, import and export of goods are subject to customs duties in an effort to raise money and/or defend domestic institutions against aggressive or successful foreign competitors.
Customs taxes are calculated for the goods in question based on their value as well as their size, weight, and other factors. Ad valorem taxes are based on the value of the goods, whereas specific taxes are based on quantity or weight. Compound duties on merchandise combine value with a few additional factors.
You can see the information on 80g income tax here.
Customs Duty in India
The Customs Act of 1962 establishes the definition of customs duty in India and grants the government the power to charge import and export fees, impose various restrictions, and prohibit the import and export of certain goods. All matters relating to customs duty are under the control of the Central Board of Excise and Customs (CBEC). The CBEC is located inside the Ministry of Finance's Department of Revenue. The CBEC creates regulations that are important for managing customs formations, collecting or levying customs charges, stopping smuggling, and identifying duty evasion.
Customs duties apply to almost all imported goods into the country. The Second Schedule lists the commodities that are subject to export taxes. Only a small number of items are excluded from import duties, including necessities like food, fertilisers, essential medications, and equipment. Additional categories for import taxes include basic duty, additional customs duty, real countervailing duty, protection duty, education cess, and anti-dumping duty or safeguard duty. Every citizen who is having handsome salary avails the benefit of an 80g deduction.
Types of Customs Duty
(a) Basic Customs Tax:- Section 12 of the Customs Act of 1962 states that imported products are subject to a basic customs tax. According to the terms set out in Section 2 of the Customs Tariff Act of 1975, these duties are levied at the rates specified in the First Schedule. The rates charged may be advantageous or regular depending on the import nation.
(b) Additional customs duty (also known as countervailing duty (CVD)):- Section 3 of the Customs Tariff Act of 1975 imposes this tax on imported goods. It is equivalent to the Central Excise Duty assessed on comparable domestically manufactured items. This tax is computed based on the total worth of the items, including BDC and landing fees.
(c) Protective Duty: Protective tariff may be imposed at a rate determined by the Tariff Commissioner to safeguard domestic industry from imports.
(d) Education Cess:- This tax is assessed at 2%, and higher education Cess is assessed at an additional 1% of the total amount of customs duties.
(e) Anti-dumping Tax:- Anti-dumping duties may be used, however they can only be used to make up the price difference between the export and retail price if an imported good is being sold for less than fair market value (dumping margin).
(f) Safeguard Duty:- If the government believes that a rapid surge in exports will potentially harm the domestic sector, a safeguard duty is imposed.
Facts about deduction under section 80g.