Tax Reforms

Centre raises thresholds for prosecution under Customs Act

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Custom Duty

Mains level : Customs frauds

The government has raised the thresholds for prosecutions and arrests under the Customs Act to ₹50 lakh from ₹20 lakh for smuggling and illegal imports of goods in baggage, and from ₹1 crore to ₹2 crore for cases involving commercial fraud.

What is Custom Duty?

  • Customs duty refers to the tax imposed on goods when they are transported across international borders.
  • In simple terms, it is the tax that is levied on import and export of goods.
  • Custom duty in India is defined under the Customs Act, 1962, and all matters related to it fall under the Central Board of Excise & Customs (CBEC).
  • The government uses this duty to raise its revenues, safeguard domestic industries, and regulate movement of goods.
  • The rate of Customs duty varies depending on where the goods were made and what they were made of.

Types of custom duty

  • Basic Customs Duty (BCD): It is the duty imposed on the value of the goods at a specific rate at a specified rate of ad-valorem basis.
  • Countervailing Duty (CVD): It is imposed by the Central Government when a country is paying the subsidy to the exporters who are exporting goods to India.
  • Additional Customs Duty or Special CVD: It is imposed to bring imports on an equal track with the goods produced or manufactured in India.
  • Protective Duty: To protect interests of Indian industry
  • Safeguard Duty: It is imposed to safeguard the interest of our local domestic industries. It is calculated on the basis of loss suffered by our local industries.
  • Anti-dumping Duty: Manufacturers from abroad may export goods at very low prices compared to prices in the domestic market. In order to avoid such dumping, ADD is levied.

 

UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

0 Comments
Inline Feedbacks
View all comments