Customs duty

Customs duties are levied on import of goods into India at the rates specified in the Customs Tariff Act, 1975. The effective rates of customs duties may vary pursuant to

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general and / or specific exemption or concession notifications issued by the government in this regard. Customs duties currently comprise the following:
1. Basic Customs Duty (BCD) - Current general peak rate is 15 per cent.
2. Countervailing Duty (CVD) - This duty is equivalent to central excise duty leviable on a like product manufactured in India. Current rate applicable to majority of the industrial products is 16 per cent plus 2 per cent education cess, taking the effective rate to 16.32 per cent. This duty is calculated on the value of product + basic customs duty.
3. Additional Duty of Customs (ADC) - This duty is levied to countervail the sales tax, value-added tax, local taxes and other charges leviable on the like goods on their sale or purchase or transportation in India. Presently, this duty is levied at 4 per cent on certain items viz items bound under the Information Technology (IT) Agreement and on specified inputs / raw materials for manufacture of electronic / IT goods. This duty is levied on value of product +basic customs duty + countervailing duty. . Education Cess - This cess is levied at 2 per cent on the amount of BCD +CVD.

In addition, government also levies anti-dumping and safeguard duties on specified products for specified periods. "Value" for the purpose of levy of customs duty is "transaction value" in the course of international trade in arm's length unrelated party transaction.