Custom Duty: Important concept

Custom dutyis one of the most essential revenues that are collected for both for exported and imported goods and also for the maintenance of a country’s financial position. It is actually the tariff or revenue that the traders have to pay when their goods are carried across the boundaries of any nation to the international market.

The aim of implicating this duty is simple to secure a country’s finance as well as treasures; earning surroundings, jobs and housing assets, etc. Even this duty maintains the movement of illegal goods to and from the country.

Characteristics:

Custom duty is normally classified under topics like rates of any particular commodities, measurement and weighing value of any product, or any other rights related to the items like size of any vehicle parts, etc. In India this duty is implied mainly for three purposes, such as:

• This duty is not at all proportional directly with the values of any products, i.e., it is applied on each and every product separately.
• Next type is ad valorem duty. In this the duty is imposed only on the exact amount of goods exported or imported. For this type physical measurements are not taken under considerations.
• Last one is combination of the above two types where the rates and quantity both are considered before levying taxes.

The concept of this duty started in the year 1786 in India at the time of British sovereign but underwent modifications for several times and finally get in practice in the year in a proper way 1962. In India this duty is collected according to Indian Custom Act under the supervision of Central Government of India. This duty contributes the major source of revenue wealth of the country and thus funds around 30% in Indian tax budget. This duty is more or less fixed and even the Indian Government has no right to alter it. Other than playing a source of income of the country, this duty also protects the country from importing or exporting any type of prohibited goods. This duty is mainly imposed by the Indian Custom Authority mainly on the imported commodities and sometimes on exported products also.