Import tax, better known as Import Duty is an indirect tax levied by the Central Board of Excise & Customs (CBEC) which is a part of the Depart of Revenue in the Ministry of Finance. Like any other tax, import duty and its scope are wider and larger than what you think.
Discussed below are the basic types of import duties.
Basic Duty
Yes, the customs will levy an import duty on nearly any goods or products that you try to bring into the national borders. The rate of this duty can vary from the basic 5% to 45% depending upon the type and quantity of the product. A full, exhausting and a numbingly long list can be found here.
Additional Customs Duty
Think of additional customs duty like the central excise duty that is levied on products that are manufactured in India. Should the import of a product amount to its manufacture as per the guidelines in the Central Excise Act, 1944, it will attract an additional customs duty. This additional customs duty is levied on the base value of the imported product which includes landing charges and other custom duties.
True Countervailing Duty
Imagine a situation wherein it would be grossly cheaper to import a product than to manufacture it domestically because of high excise duty on various inputs. To counter and offset the disadvantage faced by local products or manufacturers, a True Countervailing Duty is levied on products in order to give Indian goods a fair go.
Anti-Dumping Duty
Also known as the Safeguard Duty, the Anti-Dumping Duty is aimed toward protecting the domestic industry. It aims to levy the import of products that may cause damage and imbalance to the local markets. We note that the Anti-Dumping Duty will not apply to goods that have been imported by units that are 100% Export Oriented Units, in Special Economic Zones or in Free Trade Zones.
Now that you have all the info on the different types of taxes, better termed as import duties, let’s find out the procedure that you would have to go through if you imported goods or if you are an agent for somebody importing goods into the country.
- You will need a Bill of Entry. This document outlines the specifications of the goods that are being imported.
- If you are moving with the times and have documented the import process via the Electronic Data Interchange (EDI), you will not have a Bill of Entry. However, you will still be required to file a cargo declaration.
- If you are a big player and require large amounts of import on a regular basis, you may be provided access to the Green Channel Facility. To accelerate import and trade times, the Green Channel Facility allows goods to be imported without each unit having to be physically checked unless there are specific doubts regarding the content or other qualitative and quantitative factors.
What you should know
From time to time, the CBEC issues circulars and notifications to update laws which affect the import duty on various products. If you are planning an import or setting up a business model which is heavily import dependent, best is to check the CBEC website and contact relevant administrative government offices to clarify any doubts.