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Export Goods:
Export goods means any goods, which are to be taken out of India, to a place outside India.
Import Goods:
Imported goods means any goods brought into India from a place outside India It excludes goods, which have been cleared for Home Consumption
Types of Duties
1. 2. 3. 4. 5. Basic Customs Duty u/s 12 Additional Customs Duty U/S 3 Protective Duty u/s 6 Anti-Dumping Duty u/s 9A Safeguard Duty u/s 8B/8C
Additional Customs Duty is often called Countervailing Duty(CVD). This duty is addition to Basic Customs Duty Rate - Duty is equal to excise duty levied on a like product manufactured or produced in India. The duty is leviable on value of goods plus customs duty payable (Assessable value + Basic Custom Duty) While calculating CVD Education Cess is not considered.
Rate of CVD
Sl. NO. 1 Situation Like articles produced or manufactured in India CVD rate is equal to ED leviable on like article
ED leviable on the class or description of articles to which the imported article belongs. Rate notified by the Central Government
Board Circular on Calculation of CVD Example: When CVD u/s 3(1) is leviable (assuming ED Rate @ 10%)
Sl No. A B Particulars Assessable Value Basic Customs Duty 10 Duty Amount 10000 1000 1000 Total Duty
C
D E F G
11000
1100 22 11 2133 1100 22 11
H
I J K
2
1
42.66
21.33 12196.99
42.66
21.33
2196.99
Inclusions in Transaction Value (if these are not already included in the invoice price)
For Imported Goods, Transaction Value includes the following amounts that the Buyer is liable to pay 1. Price actually paid or payable for the goods when sold for export to India 2. Amount towards Cost and Services including
1. Commissions and Brokerage (except Buying Commission) 2. Assists, Engineering, Design Work, 3. Royalties and License Fees,
3. 4. 5. 6.
Cost of Transportation to the place of importation, Packing Cost ( Except durable and re-usable container ) Insurance, and Loading, Unloading and Handling Charges.
Royalties and license fees related to the imported goods that the buyer is required to pay, directly or indirectly.
Exclusions from Transaction Value (if these are included in the Invoice Price)
1. Charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on imported goods, e.g., industrial plant, machinery or equipment. 2. Cost of transport after importation, 3. Duties and Taxes in India 4. Dividends or other payments from the Buyer to the Seller that do not relate to the imported goods. 5. Payment made for activities undertaken by the Buyer on his own account, other than those for which an adjustment is provided in Rule 10
CIF
CIF (cost, insurance, and freight): used by a seller to indicate that the price quoted includes the cost of the merchandise, packing, and freight to a specified destination plus insurance charges. CIF = FOB + Cost + Insurance + Freight
FOB
Free On Board value is the value excluding cost, insurance and freight. Or It is cost of equipment excluding transport and other charges.
Problem 1
From the following particulars determine the A V of the imported equipment. FOB cost of equipment 2,00,000yen Freight Charges 20,000 yen Insurance paid in India for transportation from Japan Rs. 15,000 Charges for development connected to equipment paid in India Rs. 60000 Commission payable to agent in India Rs. 15000 Exchange rate as per RBI is 1 yen = Rs. 0.45 Exchange rate as per CBEC is 1 yen = Rs. 0.50 Landing charges 1% of CIF cost.