Exemptions from Customs Duties

There are a few exemptions from Customs duty, and they are as follows.

• The Central Government can grant exemptions by issuing a notification. Capital goods and spares can be imported under “project imports” at concessional/ Nil rate of customs duty.
• Section 25 of the Customs Act authorises the Central Government to issue notification granting exemption from customs duty partially or wholly on any goods.
• The exemptions may be in respect of primary duty or auxiliary duty.
• General or specific exemptions may be granted. While general exemptions are in respect to the user of goods, specific exemptions are in respect of various products.
• The exemptions are also granted subject to fulfilment of certain conditions.

Types of Exemptions

The following are the types of exemptions from Customs Duty.

• By notification
• By particular order on the Adhoc basis
• General exemptions
• Exemptions to Oil and Natural Gas Corporations Limited (ONGC)/ Oil India Limited (OIL)
• Other exemptions

“Customs Duty Drawbacks”

“Drawbacks” about any goods manufactured in India and exported has either of the following meanings.

• Rebate of duty chargeable.
• Rebate of duty of excise.
• A drawback is equal to the Customs duty paid on imported inputs and the Excise duty paid on indigenous inputs.

Value of the Customs Act

Customs Duty is an amount that is payable as a percentage of ‘value’ often called as ‘Assessable Value’ or Customs Value. Sections 14(1) provide the following criteria for deciding ‘value’ for Customs Duty.

• Price at which such or like goods are ordinarily sold or offered for sale.
• Price for the delivery at the time and place for importation or exportation.
• Price should be in the course of International Trade.
• Seller and buyer have absolutely no interest in the business of each other, or one of them has no interest in the other.
• Price should be sole considerations for sale or offer for sale.
• The rate of exchange as appropriate on the date of presentation of Bill of Entry as fixed by CBE&C (Board) by Notification should be considered. This criterion is entirely appropriate for valuing export goods. However, in the case of import goods valuation is required to be done according to valuation rules as stated in Chapter 6 Para 5 of the CBE & C’s Customs Manual, 2001.