Page 97 - COMBINED QUESTIONS AND ANSWERS - EDITION 2019 - PART II_Neat

(i) a only
(ii) b only
(iii) both a and b
(iv) None of the above
A-326: iii - both a and b
Q-327: Explain the levy of Customs duty in brief
A-327: Customs duty is the duty charged on goods on the import to India or export from
India. Section 12 is the charging section of the Customs Act, 1962 except as provided in the
said act or any other law for the time being in force, duties of Customs to levy, the rates
specified in the Customs Tariff Act, 1975, or any other law for the time being in force, on the
goods imported to India and export from India.
The provisions of sub-section (1) of Section 12 of Customs Act, 1962 shall apply in
respect of all the goods belonging to Government as they apply in respect of goods not
belonging to Government and hence there is no general exemption to goods imported by
the Government.
But imports by Indian Navy, specific equipment required by police, Ministry of
Defense, Coast Guard, etc. are fully exempt from the Customs duty by issue of specific
notifications subject to fulfillment of conditions and or procedure mentioned in the
notification.
Duties of Customs shall be levied on the goods and it may point that Customs levy is
subject to other sections in the Act. They are:
Section 13 - No duty on pilfered goods except where such goods are restored to the
importer after pilferage;
Section 22 - Reduced duty on damaged goods
Section 23 - Remission of duty on destroyed goods
There are two types of rates of duty of Customs:
(i) Ad valorem rate - basis of value;
Meaning:
The ad valorem rate depends on the value of a good. Under this calculation,
the customs valuation is multiplied by an ad valorem rate of duty (example
10 per cent) in order to arrive at the amount of duty payable on an imported
item.
(ii) Specific rate - basis of quantity/number/ volume/ weight.
Meaning:
A specific duty is charged for a quantitative description of the goods
(example: USD 1 per item or per unit).
Generally, the liability of Customs duty is the classifiable under three categories:
(i) The goods, points and the circumstances which the Customs duty is payable;
(ii) The procedure, mechanism and the organisation for the determining the
amount of Customs duty;
(iii) The exemption to the levy on grounds of morality or equity or as
discretionary powers vested in the Government as a tool for planning tax
structure and control of economic growth of the country.
Q-328: Remittance for import payment may be done by an RBI approved money exchange with
(a) AD Code
(b) Only through banks
Which one is correct on the above statement?

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