Customs Duty is a tax imposed by a government on goods imported into or exported from a country.
How It Works:
- Goods are classified under a tariff code (HSN).
- Applicable duty rates are determined.
- Duty is calculated based on value, quantity, or type of goods.
- The importer/exporter pays the duty.
- Goods are released after payment.
Benefits:
- Generates government revenue
- Protects domestic industries
- Regulates international trade
- Controls import/export flow
Example:
An importer pays customs duty on electronic goods brought into India based on their declared value.