Let us assume assessable value of an item is Rs.100 and BCD 30% & IGST 18%
Category
|
Details
|
Duty %
|
Value (Rs.)
|
Calculation
|
A
|
Assessable value (AV) of imports
|
100
|
Import value
| |
B
|
Basic customs Duty @30%
|
30
|
30
|
A X 30/100
|
C
|
Social Welfare Cess
|
10
|
3
|
B X 10/100
|
D
|
Anti Dumping / Safeguard Duty
|
0
|
0
|
A X 0/100
|
E
|
IGST
|
18
|
23.94
|
(A+B+C+D) X 18/100
|
F
|
GST Compensation Cess
|
0
|
0
|
(A+B+C+D+E) X 0/100
|
G
|
Total Duty payable
|
56.94
|
Total of B to F
| |
H
|
Value of imports + all duties
|
156.94
|
A+G
|
(1). Basic Customs Duty ( BCD )
-Levied under section 12 of customs Act 1962
-Rates specified u/s 2 of the customs Tariff Act 1975
-Different rate for different goods
-General effective basic rate is 7.5% at present
-The basic duty may be exempted by a notifications u/s 25
-The basic duty may have two rates under the first schedule to customs tariff act 1975, viz
standard rates and preferential rates.
(2). Integrated Goods and Services Tax ( IGST )
As per section 3(7) of the Customs Tariff Act, any article being imported to India shall be liable to pay integrated Goods and service tax, at such rate as is leviable under section 5 of IGST ACT, 2017 on a like article on its supply in India, on the value of imported article.
As per section 3(8) of the Customs Tariff Act, the value for the purpose of levy of the IGST will be an aggregate of –
(a) Value of imported article determined under section 14(1) of Customs Act or Traiff Value of such article under section 14(2) of Customs Act, 1962
(b) Duty of Customs leviable on that article under section 12 of Customs Act (BCD) and any sum chargeable on that article under any law for the time being in force as an additional to a duty of Customs but does not include any tax under section 3(7) or Cess under section 3(9) of Customs Tariff Act.
(3). GST COMPENSATION CESS:
As per section 3(9) of the Customs Tariff Act, any article being imported into India shall be liable to pay Goods and Service Tax Compensation Cess at such rate as is leviable under section 8 of GST (Compensation to States) Cess Act, 2017. on the value of like article on its supply to india.
As per section 3(10) of Customs Tariff Act, the value for Compensation Cess will be aggregate of
(a) Value of imported article determined under section 14(1) of the Customs Act, 1962.
(b) Duty of Customs leviable on that article under section 12 of Customs Act and any sum chargeable on that article under section 12 of Customs Act and any sum chargeable on that article under any law for the time being in force as an additional to duty of Customs but does not include any tax under section 3(7) or Cess under section 3(9) of Customs Tariff Act
(4)Anti Dumping Duty
-Levied u/s 9A of Customs Tariff Act 1975
-Where any article is exported by an exporter or producer from any country to India at less than it’s normal value, then on its import the central Government by way of notification in the official Gazette may impose an anti dumping duty not exceeding the margin of dumping in relation to such article.
-Dumping means exporting goods to India at prices lower than the ones in the domestic market of the exporting country, subject to certain adjustments
-Central Government may levy ADD to prevent dumping upto the margin of dumping
-Margin of dumping is the DIFFERENCE between the normal value and the price charged for exports to India.
-Normal Value means comparable price in the ordinary course of trade in the exporting country, after making adjustments to the extent of conditions of sale,taxation etc.
-Injury margin means difference between fair selling price of domestic industry and landed cost of imported product.
-ADD is permissible under WTO.
-The industry which complains whether individually or collectively, must account for at least 25% of the production in India, of the commodity alleged to be dumped into India.
-The Designated Authority , Ministry of commerce shall carry out an enquiry as per the procedure set out in the Customs tariff (Identification, Assessment and collection of Anti Dumping Duty on dumped articles for determination of injury) rules 1995.
-ADD can be charged provisionally: The designated Authority pending determination of margin of dumping can impose ADD on a provisional basis. On completion of enquiry, if ADD is reduced then the excess is refundable. But if ADD imposed by the designated authority higher than the provisional duty already imposed, the differential shall not be collected from the importer.
- The Central Government may on the basis of the preliminary findings received by the designated Authority, impose a provisional duty not exceeding the origin of dumping, Within 60 days from the date of public notice. The duty so levied remain in force only for a period of “Not Exceeding 6 Months” which may be extended to 9 Months upon request from exporters representing a significant percentage of the trade.
ADD can be charged retrospectively: The Central Government, by notification in official Gazette, levy ADD retrospectively from a date prior to the date of imposition of ADD but not beyond 90 days from the date of notification. This system is applied when massive dumping of an article imported in a relatively short time.
-The Designated Authority shall from time to time, review the need for the continued imposition of the ADD and shall, if it is satisfied on the basis of information received by if that there is no justification for the continued imposition of such duty, recommend to the Central Government for its withdrawl. Review has to be concluded within a period NOT exceeding twelve months from the date of intimation of such review.
Under – Rule 14, The Designated Authority shall, by issue of a public notice terminate the investigation immediately if;
a. It receives a request in writing for doing so from or on behalf of the domestic Industry affected, at whose instance the investigation was initiated.
b. When there is no sufficient evidence of dumping and where there is no justification.
c. It determines that the margin of dumping is less than two percent of export price.
d. It determines that the volume of the dumped imports, actual or potential from a particular country accounts for less than Three percent of the imports of line product, Unless, the countries which individually account for less than seven percent of the import of the like product or
e. It determines that the injury where applicable, is negligible.
The ADD unless revoked earlier , cease to have effect on the expiry of five years from the date of such imposition. However Central Government may from time to time extend the period of such imposition for a further period of five years where a review initiated before expiry of five years, has not come to a conclusion before such expiry. The ADD may continue to remain in force, pending the outcome of such a review for a further period NOT exceeding ONE year.
ADD is country/ countries & supplier/ suppliers specific now w.e.f Finance Act 2009 .But it was country specific earlier. Designated Authority V India Metals and Fero Alloys Ltd (2009) 234 ELT 386
-Refund of ADD is subject to unjust enrichment Automotive Tyre Manufacturers Association, 2011 (SC)
(5) Safeguard Duty
-Levied u/s 8B of customs Tariff Act 1975
-The Central Government by virtue of customs Tariff Act 1975 empowered to impose safeguard duty after enquiry on any article imported into India in such increased quantities so as to cause or threaten to cause injury to domestic Industry.
-This levy is permissible under the WTO
However the safeguard duty shall not be imposed in the following cases;
a. Articles originating from developing country so long as the share of imports of that article from the country does not exceed 3% of the total imports of that article into India.
b. Where the article is originating from more than one developing country, then taking total imports of that article from all such countries does not exceed 9% of total import of that article into India.
c. Safeguard duty is not applicable of goods imported by 100% EOU,SEZ & FTZ unless specifically made applicable in the notification.
-safeguard duty cease to have effect on the expiry of four years.
-Provided safe guard duty shall continue to be imposed if there is continued injury or threat to domestic industry
-The safeguard duty is imposed for the purpose of protecting interests of any domestic industry in India aiming to make it more competitive. Further, no safeguard duty shall remain in force beyond period of 10 years from the date of its initial imposition.
-During preliminary findings, if it is found that increased imports have caused or threatened to cause injury to a domestic industry, u/s 8 B(2) the Central Government is also empowered to impose provisional safeguard duty .Provided, provisional safeguard duty shall not remain in force more than 200 days. On final determination, Central government comes to an opinion that no injury has been caused and there is no such threat to cause injury, duty collected shall be refunded.
-Safeguard duty Rule - Customs tariff (Identification and Assessment of safeguard duty) rules, 1997.
(6) National Calamity Contingent Duty
NCCD is levied under finance Act at varying rates on select commodities. Basic purpose of this duty is to take care of calamities that the nation may face.
Example: NCCD on Pan masala, cigarettes etc,
(7) Social Welfare Cess ( SWC )
a. SWC 10% is applicable on basic custom duty
c. No SWC on SGD, ADD or any other protective duty.
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