Page 140 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 8: Custom Duties

authority of law. So, the Indian Customs Act was introduced that allow the Central Government Notes
to collect the taxes under the name of Custom Duty.
Custom Duties are usually levied with ad valorem rates and their base is determined by the
domestic value ‘the imported goods calculated at the official exchange rate. Similarly, export
duties are imposed on export values expressed in domestic currency.

Export duties are levied occasionally to clear up excess profitability in international price of
goods in respect of which domestic prices may be low at given time. But the concept of import
duty is wide and almost universal, except for a few goods like food grains, fertilizer, life saving
drugs and equipment etc.
The Indian Customs Duties are major source of revenue for the Union Government and constitute
around 30% of its tax revenues. Together with Central Excise duties, the contribution amount to
nearly three-fourth of total tax revenue of the Union Government.

Custom duty not only raises money for the Central Government but also helps the government
to prevent the illegal imports and illegal exports of goods from India. The Central Government
has emergency powers to increase import or export duties whenever necessary after
a notification in the session of Parliament.

Did u know? Custom Duty is imposed under the Indian Customs Act formulated in 1962 by
the Constitution of India under the Article 265, which states that “no tax shall be levied or
collected except by authority of law.

Self Assessment

Fill in the blanks:

6. The rate of duty, rate of exchange and .................................... applicable to any imported
goods shall be the rate and the valuation in force.

7. Custom Duty is imposed under the Indian Customs Act formulated in ....................................
by the Constitution of India under the Article 265.

8. Custom duty not only raises money for the Central Government but also helps the
government to prevent the illegal .................................... and illegal exports of goods from
India.

9. The .................................... government has emergency powers to increase import or export
duties.

10. The Indian Customs Duties are major source of revenue for the Union Government and
constitute around ....................................% of its tax revenues.

8.8 Collection and Exemption from Custom Duties

SECTION 12. Dutiable goods. – (1) Except as otherwise provided in this Act, or any other law for
the time being in force, duties of customs shall be levied at such rates as may be specified under
the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods
imported into, or exported from, India.
(2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government
as they apply in respect of goods not belonging to Government.

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