Introduction
Import duty is a type of tax levied on the import and specific exports of a nation's customs authorities. The value of goods will generally decide the amount of import duty that will be imposed. Sometimes, import duty is also referred to as customs duty, import tax, import tariff, or tariff.
The import duties have two different purposes:
1) Increasing income to the local government 2) Encouraging the individuals to purchase the local products which don't attract any import duties.
Another goal which is not really stressed on or not made public is to penalise a country by imposing high import duties on its goods.
Latest News
The phone manufacturers are making the most of the free trade agreement between the ASEAN countries and India. The treaty was signed in the year 2009. They import components as the free trade agreement has reduced or given an exemption on tariff on several goods including electronics. This has made Vietnam an emerging manufacturing hub.
Industry Impact
India recently hiked the basic customs duty on several items, including footwear, refrigerators, washing machines, air-conditioners, furniture fittings, jewellery, and tableware. This move is a part of preventing rupee falling against the foreign currencies and limiting the current account deficit. Also, this increased customs duty is aimed at curbing importing specific items.
When the import duty goes up, the price of the goods will get inflated and hence, the demand for these goods will go down and thereby reduces the import. This, in a way, supports the domestic manufacturers. The main objective behind levying goods with import duty is to support the nation's economy, residents, jobs, and the environment.
Conclusion
Import duty is collected when particular goods enter the country. Globally, numerous organisations, deals, and treaties have a direct bearing on the import duties.
