Introduction The word ‘customary’ is derived from

‘custom’ which means a habitual practice.

It refers to duty imposed on imports or exports of goods.

In 1786, a board of revenue was created with its headquarters at calcutta.

In 1812 regulations were made for the madras customs house and 2 customs house were established in western india.

In order to provide uniform rates of duties for all , the customs duties Act was passed in 1859.

Import duty on yarn was imposed in 1894 at 5% advalorem. It was raised to 7 ½ %.

The customs act was passed in 1962 and tariff act in 1975 and came into effect in 1976.

Growth in customs revenue Customs duty was started with 5%.

After independence it changed. During 1970-71 revenue from

customs was 524 crs and rose to 25500 crs during 92-93 which is 32.5% of tax revenue of central government.

Objectives of Customs Act Safeguarding domestic trade Reducing Imports Revenue resources Protection of Indian Industry Prevention smuggling activities To prevent dumping of goods.

Scope of the Customs Law

The customs Act 1962 was passed by parliament.

It is primarily treated as a Revenue Act which consists of 17 chapters and 161 sections.

The rules under the customs act are:◦ The customs valuation rules,1988◦ Duty drawback rules 1995◦ Re-export of imported goods◦ Baggage rules,1998

Customs Tariff Act 1975

The act contains 2 schedules Schedule 1 gives classification and

rate of duties for imports Schedule 2 give classification and

rate of duty for exports Makes provisions for duties like

additional duty (CVD) preferential duty, anti dumping duty protective duties etc.

Definition of Concepts

Adjudicating authority sec 2(1) Assessment sec2(2) Baggage sec 2(3) Customs Area sec 2(11) Customs Station sec 2(13) Dutiable goods sec 2(14) Duty sec 2(15)

Contd.

Entry sec 2(16) Examination sec 2(17) Export sec 2(18) Export goods sec 2(19) Exporter sec 2(20) Foreign going vessal or aircraft sec

2(21) Fund sec 2(21A)

Contd..

Goods sec2(22) Import sec 2(23) Importer goods sec 2(25) Importer sec 2(26) Indian customs waters sec 2(28) Market price sec 2(29) Person incharge sec 2(30) Prohibited goods sec 2(33)

Levy and Collection of cutoms dutyThe levy of duties of customs is

regulated by the customs Act 1962 while the rates of duties are fixed by the customs Tariff Act 1975.

The customs enforce control over the movement of goods and persons across the boarders of our country by restricting the points of entry and exit at which alone the movement of cargo and persons can take place. Sec 12 to 28 of the customs act provide for levy and collection of customs duty.

Taxable event

Taxable event for import Duty – it is the day of crossing of customs barrier and not on the date when goods landed in india or had entered territorial waters.

Taxable event for export duty – export commences when goods cross customs barrier, but export is complete when it crosses territorial waters.

Territorial Water of IndiaTerritorial waters means that portion of

sea which is adjacent to the shores of a coutry.

President of india has extended upto 6 nautical miles from the base line in 1956.

Levy of duty on imports and exports – sec 12 provides for levy of duty on imports and exports. Import duty is levied on all items. Export duty is levied only on a few items.

Date for Determination of Rate of Duty

For imported goods sec 15(1) Goods imported for home-consumption

Goods cleared from warehouse

Any other goods

Contd..

For Exported goods sec(16) Goods entered for export In the case of other goods

Assessment of Duty

Procedure for Assessment sec(17) Examining and testing of goods

Submission of documents Methods of assessment of duty

Import and Export Procedure Customs duties are levied on

goods imported into or exported from India.

Import and export of goods takes place by sea, air, rail or road or through baggage with passengers.

Import Procedure

Arrival at customs port/airport only

Import manifest/report Grant of entry inward by

customs officer Unloading of Reported goods

only

Contd..

Filing of import bills of entry Assessment of goods Approval of assessment Customs clearance from view point

of import policy Payment of Duty Disposal if goods are not cleared in

30 days

Export Procedure

Initial steps to be taken by the exporter

Shipping bill to be submitted by exporter

Declaration of exporter Export duty if payable Entry of goods for exportation Clearance of goods for exportation

Contd..

Check in customs Examination of goods before export Let export order by customs authorities Goods not to be loaded on vessel until

entry outward granted section 39 & 40 Conveyance to leave on written order Notice of Short Supply

Following are the different classes of officers of customs:

(a) chief commissioners of customs (b) commissioners of customs (c) commissioners of customs(Appeals) (d) joint commissioners of customs (e) Deputy commissioners of customs (f) Assistant commissioners of customs (g) Such other class of officers of customs

as may be appointed for the purpose of

the customs Act.

Section 25 of the customs Act empowers the central government to issue notification granting exemption from customs duty partially or wholly on any goods.

The exemptions may be in respect of basic duty or auxiliary duty.

General or specific exemptions may be granted.

While general exemptions are in respect of user of goods, specific exemptions are in respect of various products.

The exemptions are also granted subject to fulfillment of certain conditions.

Meaning of Drawback: “Drawback” in relations to any goods manufactured in India and exported means-

(a) Rebate of duty chargeable (b) Rebate of duty of excise (c) Draw back is equal to – (i)

Customs duty paid on imported inputs and (ii) Excise duty paid on indigenous inputs

Provisions relating to Draw back:

Drawback allowable on re-export of duty-paid goods [sec 74]

Drawback on imported material used in the manufacture of goods which are exported [sec 75]

Prohibition and regulation of draw back in certain cases [sec 76]