Customs duty is levied by the Central Government on the goods imported into and exported from India on the transaction value.
The rate of customs duty depends upon its classification under Customs Tariff Act (CTA). In addition, preferential / concessional rates of customs duty are available. Also, Central Government has the power to exempt any specified goods from whole or part of the custom duties. Further, in case of exports from India, duty is levied only on a very limited list of goods.
Customs duty can be classified into Basic Customs Duty (BCD) and Countervailing Duty (CVD).
BCD is the basic component of customs duty levied at the effective rate as stipulated in First Schedule to CTA. It is applicable on landed value of the goods.
CVD is equivalent to, and is charged to counter the effect of, the excise duty applicable on goods manufactured in India. CVD is calculated on landed value of the goods and applicable BCD.
Anti-dumping duty –
Dumping is said to occur when goods are exported by a country to another country at a price lower than its nominal value. Thus anti-dumping duty is levied as a measure to rectify the situation arising out of dumping of the goods and its trade distortive effect to ensure fair trade practices.