Custom / FTP
Customs Duty is a tariff or tax imposed on goods when transported across international borders. Policies enacted by the government sector of a domestic economy to discourage imports from, and encourage exports to, the foreign sector is known as Foreign Trade Policy.
Custom Consultancy Services offered by us involves handling the requirements of Custom duty that is levied on import of goods into India at rates specified in Customs Tariff Act, 1975. The Custom excise duty in India comprises Basic Customs Duty (BCD), Countervailing Duty (CVD), Additional Duty of Customs (ADC) and Education Cess. Custom excise duty are levied on import of goods into India at the rates specified in the Customs Tariff Act, 1975. The effective rates of customs duties may vary pursuant to general and / or specific exemption or concession notifications issued by the government in this regard.
Custom excise duty in India currently comprise the following:
Basic Customs Duty (BCD)
Current general peak rate is 15%.
Countervailing Duty (CVD)
This duty is equivalent to central excise duty leviable on a like product manufactured in India. Current rate applicable to majority of the industrial products is 16% plus 2% education cess, taking the effective rate to 16.32%. This duty is calculated on the value of product + basic customs duty.
Additional Duty of Customs (ADC)
This duty is levied to countervail the sales tax, value-added tax, local taxes and other charges leviable on the like goods on their sale or purchase or transportation in India. Presently, this duty is levied at 4% on certain items viz items bound under the Information Technology (IT) Agreement and on specified inputs / raw materials for manufacture of electronic / IT goods. This duty is levied on value of product +basic customs duty + countervailing duty.
This cess is levied at 2% on the amount of BCD +CVD.
In addition, government also levies anti-dumping and safeguard duties on specified products for specified periods. “Value” for the purpose of levy of customs duty is “transaction value” in the course of international trade in arm’s length unrelated party transaction.
Foreign Trade Policy (Import-Export Policy)
Import of goods into and export from India is regulated by the Foreign Trade Policy (the Policy) issued from time to time by Government of India. The Policy remains in force for five years and is amended from time to time. The Policy currently in force is for tax year 2015-20. Majority of goods are now freely importable.