‘Customs Duty’ refers to the tax imposed on the goods when they are transported across the international borders. The objective behind levying customs duty is to safeguard each nation’s economy, jobs, environment, residents, etc., by regulating the movement of goods, especially prohibited and restrictive goods, in and out of any country.
Every good has a predefined rate of duty that is determined based on various factors, including where such good was acquired, where such goods were made, and what these goods is made of. Also, anything that you bring into India for the first time should be declared as per the customs rules. For instance, you need to declare the items purchased in a foreign country and any gifts which you acquire outside India.
Union budget 2021 Outcome:
Few of the items on which Customs Duty Rates are revised are as follows: -a) Reduced duty on copper scrap from 5% to 2.5%
b) Basic and Special additional excise duty on petrol and high-speed diesel oil (both branded and unbranded) is reduced
c) Increased duty on solar inverters from 5% to 20% – Raised duty on solar lanterns from 5% to 15%
d) The basic customs duty on gold and silver reduced
e) The department will rationalise duty on textile, chemicals and other products
f) The revised rates will be applicable from 2nd February 2021 onwards.
Customs duties are charged almost universally on every good which are imported into a country. These are divided into:
Customs duties are computed on a specific or ad valorem basis. In other words, it is calculated on the value of goods. Such value is determined as per the rules laid down in the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. If there are doubts regarding the truth or accuracy of the value of goods, valuation of such item is done through the following method:
One can pay customs duty online with a few simple steps:
The Indian government has increased the basic customs duty on an array of items that include refrigerators, air-conditioners, footwear, washing machines, furniture fittings, tableware, jewelry and many more. This was done in an effort to shore up the falling rupee and restrict the current account deficit. This was initiated with an aim to curb imports of specified imported items. With the increase in duty, the prices of these goods are likely to rise, dampening their demand, reducing the imports and then indirectly assisting the domestic manufacturers.
In recent years, India witnessed major reforms in the taxation system via digitalization. From Income Tax to GST, most of the things are now available online. To ensure ease of doing business, the CBIC (Central Board of Indirect taxes and Customs), has launched e-SANCHIT, which enables registered persons to file their customs related documents online.
The e-SANCHIT initiative is made mandatory from March 15th this year. Only the ICEGATE registered users can use the e-SANCHIT application by accessing e-SANCHIT link. Under this new scheme, hard copies of the uploaded documents are not required to be produced to the assessing officers. The objective here is to minimize the physical interface between the customs agencies and trade and to maximize the pace of clearance.