What exactly is Custom Duty?
Customs duty is applicable to all the goods that are imported and also on some goods that are exported out of the country.
The duty which is levied on import is termed as import duty, and the one which is levied on exported goods is termed as export duty.
These custom duties are levied by countries to raise revenue or to stop potential competitors from other countries.
These customs duties are levied based on the value of goods, weight, etc. If they are based on the value of goods, they are called ad valorem duties, and the weight based are called specific duties.
About customs duty in India
Customs duty in India as per the Customs Act, 1962, falls under the Central Board of Excise & Customs (CBEC) which allows the government to levy duty on exports and imports, prohibit export and import of some goods, charge penalties, etc.
CBEC formulates all the policies to levy customs duties, customs duty evasion if any, prevention of smuggling, and also other administrative decisions related to customs formations.
Types of Customs Duty in India
Customs duty is levied on all goods that are imported into the country. Export duties are levied on certain goods, and so is the import duty.
Import duties are divided into basic duty, additional customs duty, true countervailing duty, protective duty, education cess, and safeguard duty.
How is Customs Duty calculated?
Customs duty is calculated based on the value of the goods which is determined by rule 3 of Customs Valuation Rules.
If the valuation conditions are not satisfied or if there is any doubt with regards to the value, the valuation then has to be done through other ways by following the hierarchy i.e.
- Comparative Value Method (compares the transaction value of similar items)
- Deductive Value Method (uses the sale price of the item in importing country)
- Computed Value Method (uses the costs related to fabrication, materials, and profit in the country of production)
- Fallback Method (based on the earlier methods with higher flexibility)
The customs duty calculator is there in the ICEGATE portal. Once you access the calculator, you will have to enter the HS (CTH Code) of the good you are planning to import. Enter a description within 30 characters and select the country of origin. Now, click on Search, and you will see a list of goods as per what you have searched. After you select one, you will be able to see a chart with information related to the customs duty on a selected item.
Online Customs Duty
Online custom duty can be known from ICEGATE or Indian Customs Electronic Commerce/Electronic Data Interchange Gateway.
This portal will allow E-filing services to clients including trade and cargo carriers.
ICEGATE offers services like electronic filing of shipping bills, and messages between customs and the trading partner via e-mail, FTP or online upload.
Steps to make online Customs duty payment:
- Go to the ICEGATE e-payment portal
- Enter the Import/Export code or the login credentials supplied by ICEGATE
- Now, click on e-payment
- You can see all the unpaid amounts under your name
- Select the challan you want to pay, select a bank or a payment method
- You will now be redirected to the particular bank’s payment gateway
- Make the payment
- You will be redirected to the ICEGATE portal, click print to have a saved payment copy with you
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