Page 157 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes are imported - stage subsequent to processing of goods is not relevant - (b) It is well settled that
the imported goods have to be assessed to duty in the condition in which they are imported.

Practical Problems

Computation of Customs Duty can be done on the following basis:

Basis Value 100.000
Custom duty @ 5% 5.000
105.000
CVD @ 8% 8.400
Cess on CVD @ 3% 0.252
Total Duty 13.652
Cess on Total Duty @ 3% 0.410
Net duty/Excise duty for EOU 14.062
Cess on Excise Duty 0.422
Final duty 14.483
Problem 1: Assessable value of certain goods imported from USA is 1,000,000. The packet
contains 10,000 pieces with maximum retail price of 200 each. The goods are assessable under
section 4A of the Central Excise Act, 1944, after allowing an abatement of 40%. The excise duty
rate is 8% ad valorem. Calculate the amount of additional duty of customs under section 3(1) of
the Customs Tariff Act, 1975 assuming basic customs duty @ 10% ad valorem.
Solution: As the goods are assessable under section 4A of the Central Excise Act, 1944, additional
duty of customs will be payable on the basis of maximum retail price printed on the packing;
less abatement as permissible [proviso to section 3(2) of the Customs Tariff Act.]

Maximum retail price [ 10,000 pieces x 200/] 20,00,000
Less : Abatement 40% 8,00,000
Assessable value under section 3(2) 12,00,000
Additional duty of customs @ 8% 96,000
Add : Education Cess @ 2% on Additional Duty of Customs 1,920
Secondary and Higher Education Cess @ 1% on Adl. Duty. 960
Additional customs duty payable 98,880
Problem 2: What will be the dates of commencement of the definitive anti-dumping duty in the
following cases under section 9A of the Customs Tariff Act, 1975 and the rules made hereunder?
(i) Where no provisional duty is imposed;
(ii) Where provisional duty is imposed;
(iii) Where anti-dumping duty is imposed retrospectively from a date prior to the date of
imposition of provisional duty.
Solution: The Central Government has power to levy anti-dumping duty on dumped articles in
accordance with the provisions of section 9A of the Customs Tariff Act, 1975 and the rules
framed hereunder.

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