Countervailing Duty Definition

Countervailing Duty is levied on the cost of imported goods and is equal to excise duty levied on like goods when manufactured in India.

The objective is to ensure that the protection provided by the import duty to domestic industry is not eroded.

Customs Surcharge

It is levied at the rate of 10% of the basic rate on all commodities except crude oil and petroleum products, GATT-bound items, gold and silver.

Basic Custom Duty

All goods imported into India are chargeable to duty as prescribed in the 1st Schedule of Customs Tariff Act. This Schedule is amended from time to time of Customs Tariff Act.

This duty can be levied either as a percentage of value of goods or at a specified rate.

Customs Duties are Levied in three Ways

Specific rate-at the rate prescribed per unit of item i.e. weight or number of length

Ad-valorem duty-levied on the value of the item Specific and

Advalorem-levied in both ways.

Customs Tariff Classification


The basic legislation is the Indian Customs Act, 1962 read with Customs Tariff Act, 1975. Section 12 of the Customs Act,'62 empowers levy of duties on goods imported into or exported from India.

However, the rates at which the different import export duties shall be leviable have been respectively specified in the First and Second Schedule to the Customs Tariff Act, 1975-called the import Tariff and Export Tariff respectively.

With effect from Feb. 28, 1986, the new tariff import schedule based on international convention of Harmonised Commodity and Coding system, commonly known as Harmonised Coding System came into being.

The basic features of the Import Tariff Nomenclature are outlined below: The headings, the Section and Chapter Notes and the interpretive Rules

Customs not specified elsewhere of all other works

Supervision and control over Customs Commissionerate of Mumbai, Calcutta, Chennai, Kandla, Bangalore, Cochin, Delhi , Visakhapatnam, Goa and Tuticorin and Customs Divisions of other Central Excise Commissioners, Assistant Commissionerates regarding Customs work handled by them.

Chemical laboratories

Directorate of Drawback

The Ministry of Finance (MoF) issues Customs Notifications to levy duty on the imported goods. The Changes are made each year on the Day of the Fiscal Budget. Customs clearance of the imported goods is done by the customs Authorities functioning under the overall charge of MoF. The hierarchy of the Authorities:

Central Board of Excise & Customs (CBEC) in the MoF Under which operates:Customs Commissionerates of Mumbai, Calcutta, Chennai, Kandla, Bangalore, Cochin, Delhi, Vizag, Goa and Tuticorin.

Directorate of Drawback Field Level:Principal Commissioners Customs ,Commissioners,Addl. Commissioners ,Dy. Commissioners,Asst. Commissioners,Port of clearance.

Member (Customs) looks after the following matters

Customs Law and its interpretation and application, policy and broad procedures(Other than those concerning anti-smuggling)
Enforcement of Import Export prohibitions
Foreign Travel and Cases on imports and exports
Baggage concessions and rules

Customs Valuations
Tariff Classification and Tariff advices
Customs procedures, Customs House Agents Regulations
Warehousing, inland Bonded Warehouses
FTZs, EPZs, 100% EOUs etc. Matters relating to Drawback
Customs Co-operations Council, GATT and ESCAP and international talks and agreements, organisations concerning customs

Customs Authorities

The customs administration vests in CBEC for implementing the provisions of the Customs Act.1962. There are two main wings of Customs House. In the 'Appraisement' wing the job of collection of revenue is assigned, while the 'Preventive' one aims at prevention of smuggling.

The Customs authority functions under the Ministry of Finance (MoF) with the Central Board of Excise & Customs at the apex. The board is headed by a Chairman and assisted by Members.

Custom Clearing Procedure

The appraising procedure may be of two types.


The First Custom Checks Procedure - Applicable only when appraisers/assessing group finds it difficult to complete the assessment on the basis of the documents made available.
The Scrutinising Appraiser in the group gives the examination order. The goods are then examined in the docks and the B/E rerutned to the Scrutinising Appraiser for completion and license debit. In this case the Customs 'out of charge' is given by the Accounts Department soon after the recovery of duty

The Second Custom Checks Procedure - Under this 80 to 90 percent of the consignments are cleared.

If the documents are adequate for determining the classification, value, ITC license, the form is completed by the Appraiser and then countersigned by The Assistant Collector. It is then forwarded to the License Department for licensing debit and audit. Then it is returned to the importers for payment of duty in the Accounts/Cash department. After recovery of duty the original B/E is retained in the Accounts Department and the duplicate and other copies are returned to the importer for getting the goods examined in the docks. In the docks, the Shed Appraiser/Examiner shall examine the goods and if in order, shall give the out of charge for taking delivery from the custodian of the goods viz. Port Trust, after payment of Port Trust charges.

Irrespective of the procedure, examination of cargo for assessment purpose is chiefly the function of the Appraising Department having special staff of examiners in the docks/Air cargo shed. The records of the examination and weighment should be declared, attested and dated at the time of the examination. If the examination spreads over more than one day, the result on each day's progress should be disclosed.

These apart some of the Customs house in India have introduced the simplified computer procedure for speedy clearance of consignment through B/E.

Imports Customs Clearance

Imports Customs Clearance and the Customs Clearing agents play the key role in the import of goods. All goods imported into India have to pass through the procedure of Customs clearance as they cross Indian border. The goods are examined, appraised, assessed, evaluated and then allowed to be taken out of charge of the Customs for use by the importer. The entire process of customs clearance is complex and to carry out this procedure smoothly, the help of accredited customs clearing agents has to be taken.

The importers need to present a Bill of Entry on receipt of the advise of the arrival ofthe vessel. The Bill of Entry is noted in Import Department, with corresponding endorsementmade against the consignment entry in the IGM along with the date. The Bill of Entry will then be presented in the Appraising Department with all the relevant documents like customs invoice, Bill of Lading, Import license and catalogue literature.