tax

Question 1

custom duty

Answer 1

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Question 2

Main features of customs duty

Answer 2

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Question 3

Merits of Customs Duty

Answer 3

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Question 4

Disadvantages of Customs Duty

Answer 4

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Question 5

Types of Customs Duties –

Answer 5

Basic customs duty, additional customs duty for excise duty, additional customs duty for sales tax, safeguard duty, protective duty, countervailing duty, anti-dumping duty, and export duty.

Question 6

Basic Customs Duty

Answer 6

Basic Customs Duty is levied under section 12 of the
Customs Act. The rates at which duties of customs shall be levied are specified in
the First and Second Schedules to the Customs Tariff Act, 1975.

Question 7

additional customs duty for excise duty

Answer 7

This duty is popularly known as
a countervailing duty because it is levied to counterbalance the excise duty in India for
such imported items. Under Section 3(1) of the Customs Tariff Act, an additional
duty on goods imported into the country is levied. The rate of this duty is equal to the
excise duty on like articles produced or manufactured in India.

Question 8

Additional Customs Duty for sales tax

Answer 8

Special Additional Duty is levied
under section 3(5) of the Customs Tariff Act accordingly, any article which is
imported into India shall in addition, be liable to a special additional duty, which
shall be levied at a rate of 4% having regard to the maximum sales tax, local tax or
any other charges for the time being leviable on a like article on its sale or purchase
in India.

Question 9

Safeguard

Answer 9

Central Government is empowered to impose safeguard duty in
specified imported goods if central Government is satisfied that the goods are being
imported in large quantities an under such conditions that they are causing or
threatening to cause serious injury to domestic industry. Such duty is permissible
under WTO agreement. The only condition under WTO is that it should not
discriminate between imports from different countries having Most Favoured Nation
(MFN) status.

Question 10

. Protective duties

Answer 10

– Section 6 of the Customs Tariff Act empowers the Central
Government to levy a protective duty based on a recommendation made by the Tariff
Commission.

Question 11

Countervailing duty

Answer 11

– If a country pays any subsidy (directly or indirectly) to the
exporters for exporting goods to India, Central Government can imposed
Countervailing duty upto the amount of subsidy cannot be ascertained, provisional
duty can be collected and after final determination, difference may be refunded. Such
imposition should be by way of a notification

Question 12

Anti-Dumping duty

Answer 12

– Dumping means export of an article from any country or
territory to India at less than its normal value i.e. when the prices at which the goods
are exported to India are less than the comparable price for the like product when
destined for consumption in the domestic market of the exporting country. Anti
dumping duty is imposed for offsetting the adverse effects of increased imports,
subsidized imports or dumped imports.

Question 13

Export duty

Answer 13

– At present, 15% Export Duty is levied only on hides, skins and
leather, and duty of 10% is levied on snake skins, hides, skins and leathers, and fur
lamb skins (No export duty is levied on hides, skins and leather of finished leather of
goat, sheep and bovine animals and their young ones). There is no export duty on any
other product.

Question 14

Prohibition on Import and Export

Answer 14

denotes prohibition on the import and export of specified goods.

Question 15

Reasons for prohibiting imports and exports –

Answer 15

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Question 16

Powers of officers of customs.

Answer 16

Subject to such conditions and limitations as the Board may impose, an officer of
customs may exercise the powers and discharge the duties conferred or imposed on
him under this Act.
2. An officer of customs may exercise the powers and discharge the duties conferred or
imposed under this Act on any other officer of customs who is subordinate to him.
3. Notwithstanding anything contained in this section, a Commissioner ( Appeals) shall
not exercise the powers and discharge the duties conferred or imposed on an officer of
customs other than those specified in Chapter XV and section 108

Question 17

OFFENCE AND PENALTIES

Answer 17

Seizure
 Confiscation
 Confiscation of Conveyances
Penal Provisions under the Customs Act:
1. Penalties in respect of improper importation of goods
2. Penalties in respect of improper exportation of goods
3. Arrest

Question 18

Powers of officers of customs. -

Answer 18

1. Subject to such conditions and limitations as the Board may impose, an officer of
   customs may exercise the powers and discharge the duties conferred or imposed on
   him under this Act.
2. An officer of customs may exercise the powers and discharge the duties conferred or
   imposed under this Act on any other officer of customs who is subordinate to him.
3. Notwithstanding anything contained in this section, a Commissioner ( Appeals) shall
   not exercise the powers and discharge the duties conferred or imposed on an officer of
   customs other than those specified in Chapter XV and section 108.

Question 19

types of offenses and prosecution

Answer 19

(i) Non-bailable or cognisable offences
(ii) Bailable or non-cognisable offences

Question 20

Non-bailable offenses

Answer 20

Carrying, removing, depositing, harbouring, keeping, concealing, selling or
purchasing the goods which are prohibited by the government to import or export shall be
punishable, the market price whereof exceeds one lakh of rupees, with imprisonment for a
term which mayextend to seven years and with fine.

Question 21

Bailable offenses

Answer 21

1. Knowing or having reason to believe that declaration, statement or document is false
   in any material particular, he shall be punishable with imprisonment for a term which
   may extend to six months, or with fine
2. If any person intentionally obstructs any officer of customs in the exercise of any
   powers, such person shall be punishable with imprisonment for a term, which may
   extend to six months, or with fine.
3. If any person resists or refuses to allow a radiologist to screen or to take X-ray picture
   of his body in accordance with an order made by a Magistrate under section 103, or
   resists or refuses to allow suitable action being taken on the advice and under the
   supervision of a registered medical practitioner for bringing out goods liable to
   confiscation secreted inside his body.
4. The punishment for imprisonment may extend to a term of three years, or with fine,
   or with both. (Bailable offences).
5. He is determined to carry out his intention to commit the offence, he shall be
   punishable with imprisonment for a term which may extend to three years, or with
   fine.
6. The officers of Customs also cannot escape serious action including prosecution
   action, if they are found abusing their powers , a customs officer shall be punishable
   with imprisonment for a term which may extend to three years, or with fine, or

Question 22

THE DUTY DRAWBACK

Answer 22

the refund of excise or import duty that is paid on goods being exported.
Goods Eligible for Drawback
The following are the eligible goods for the duty drawback.
1. To export – goods which you imported into India
2. To export goods imported into India after having been taken for use
3. To export goods manufactured/produced out of imported material
4. To export goods manufactured/produced out of indigenous material
5. To export goods manufactured /produced out of imported or and indigenousmaterials.

Question 23

Eligibility Criteria

Answer 23

1. Any individual must be the legal owner of the goods at the time the goods are
   exported.
2. You must have paid customs duty on imported goods.
3. Duty drawback is available on most goods on which customs duty was paid on
   importation and which has been exported.

Question 23

Eligibility Criteria

Answer 23

1. Any individual must be the legal owner of the goods at the time the goods are
   exported.
2. You must have paid customs duty on imported goods.
3. Duty drawback is available on most goods on which customs duty was paid on
   importation and which has been exported.