THE CUSTOMS TARRIF ACT, 1975

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The Customs Tariff Act, 1975 was enacted on August 18, 1975 for the purpose of consolidating and modifying the legal standards relating to customs duties. The products that are imported to India shall be legally responsible to pay an additional duty equivalent to that of the excise duty in the same manner levied for the goods manufactured in India and the percentage of the duty payable shall be calculated according to the value of the goods. In order to calculate the additional duty on the goods that are imported, the value of the goods shall be determined according to the Customs Act, 1962 or as per the tariff value decided on the goods. The value shall also be the customs duty charged on the goods and any amount charged on the goods according to any law in force in addition to the customs duty.

Where the Central Government is of the opinion that additional duty is to be levied on the goods in the interest of the public, the duty that would balance the duty of excise on the raw materials, constituents and elements of similar form used in the production of that product, the Central Government shall issue a direction that duty in addition to the additional duty that embodies the excise duty imposed on the raw material shall be fixed by the Central government by framing rules for such imported goods. For framing rules the Central Government shall consider the average quantum of the duty of excise that is to be paid on the raw materials, constituents or elements that are employed for the production of such goods.

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Where preferential rate of revenue is determined for a product under the first schedule or is permissible according to the notification issued under the Customs Act, 1962, then the duty shall be imposed and collected as per the standard rate unless a claim is raised by the owner of the goods during importation that goods are to be charged with preferential rate as it is the creation or manufacture of the preferential area. Where the Indian Government and the Government of a foreign country entered into a trade agreement that the duty shall be imposed on the products of the foreign country at lower rates than determined under the First Schedule, the Central Government shall make rules for the said purpose. Furthermore, if the Tariff Commission constituted under the Tariff Commission Act, 1951 recommends for the instant action to protect the interests of any industrial establishments in India, the Central Government shall inflict customs duty on the products imported to India for which the proposal is made.

Where the duty imposed on any product according to the first schedule is prescribed as protective, such duty shall be effective only to the extent and inclusive of the date prescribed in that schedule. The Act confers emergency power to enhance or impose export or import duties by the Central Government with respect to a product. The Central Government shall impose duty and additional duty on articles where such article is imported to India at a rate less than its normal value, as the anti dumping duty. To comply with the agreements entered with a foreign country, the Central Government shall have power to modify and adjust the duties at the required rates by notifying in the Gazette of India.

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The central government has framed the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and For Determination of Injury) Rules, 1995 and Customs Tariff (Determination of Origin of Goods under the Agreement on SAARC Preferential Trading Arrangement) Rules, 1995 to put into effect the power granted under the Customs Tariff Act, 1975. Recently, the Central Government enacted the Customs Tariff Amendment (Incorporation of Proposals) Act, 2013, Customs and Excise (Duties and Other Taxes) (Amendment) Act, 2013 and has also introduced Customs Tariff (Anti-Dumping) Amendment Bill, 2013 in the Rajya Sabha, waiting for the assent of the President.