The word ‘custom’ generally refers to the authority of a country that is responsible for collecting the tariffs and controls the inflow and outflow of the goods and services. Custom charges the custom duties on import and export that includes animals, transport, hazardous items etc. Each country has its own laws for import and export activity enforced by custom authority. Let’s have an overview on the customs duties in India.
The Indian government levies tariffs or custom duty on import and export of goods and services from the country. Custom duty is actually an indirect tax. The duties levied on import and export of goods classify as import duty and export duty. Custom duties help in collecting the revenue to the government. The amount to be paid as duties varied according to the factors such as value, weight etc.
Custom duties in India
The Customs act, 1962 defines the custom duty in India under which it gives the government the power to levy tariffs or duties on export and import of several goods and services. The custom duty helps in prohibiting the export and import of hazardous goods. The Central Board of Excise and Customs (CBEC) is a major board under which all custom duties’ matter fall. This board formulates the policies that are related to collecting of revenue and decides the amount to add as duty. CBEC plays a major role in preventing the smuggling activities within the country and is active for administrating the decisions of custom formations.
The CBEC is a division of Department of Revenue of the Ministry of Finance and there are further various divisions under CBEC that are divided according to their field work. These divisions are made to ensure that the matters running in different fields can be supervised and handled carefully. The Indian government assesses a 1% customs handling fee on all imports in addition to applied customs duty. Although, the custom duties on some product are replaced by Goods and Services Tax(GST) in July, 2017.
The conclusion can be made regarding to custom duty in India, that it protects the country’s economy, residents, jobs, environment etc by controlling the flow of goods across international borders. By imposition of these tariffs on restricted goods and services by CBEC, huge revenue is collected by Indian government that helps in catching up with the global economy.