Indirect Taxes: Customs Laws (Unit 3)

Comprehensive vocabulary flashcards covering Indian Customs Law under the Customs Act, 1962, and the Customs Tariff Act, 1975, including duty types, valuation rules, import/export procedures, and international maritime concepts.

Customs Duty

A type of indirect tax levied under the Customs Act, 1962 on goods involved in international trade when they are imported into or exported from India.

Import Duty

The customs duty charged on goods imported into India.

Export Duty

The customs duty charged on goods exported out of India.

Entry No. 83 of List I (Union List)

The constitutional entry under the Seventh Schedule of the Constitution of India that empowers the Union Government to formulate laws and levy duties on imports and exports.

Section 12 of the Customs Act, 1962

The charging section providing that customs duties shall be levied at rates specified under the Customs Tariff Act, 1975, or other applicable laws on goods imported into or exported from India.

Baggage [Section 2(3)]

Includes unaccompanied baggage and all dutiable or non-dutiable articles brought into India or taken out of India by a passenger for personal use, excluding commercial merchandise.

Accompanied Baggage

Articles of personal baggage carried personally by a passenger while travelling.

Unaccompanied Baggage

Personal articles belonging to a passenger that are dispatched separately, typically before or after the passenger's travel.

Bill of Entry [Section 46]

A legal import declaration document filed electronically by an importer or customs agent with the Customs Department detailing the description, quantity, value, and duty payable on imported goods.

Bill of Entry for Home Consumption

The white form filed when imported goods are to be cleared immediately for domestic use upon full payment of customs duty.

Bill of Entry for Warehousing

The yellow form filed when imported goods are to be deposited into a bonded warehouse without immediate payment of customs duty.

Ex-Bond Bill of Entry

The green form filed when warehoused goods are cleared from a bonded warehouse for home consumption after payment of applicable duty.

Bill of Export

A legal declaration document filed with the Customs Department by an exporter when goods are being exported out of India via land or inland routes.

Deemed Exports

Transactions where goods manufactured in India do not physically leave the country, but payment is received in Indian Rupees or free foreign exchange, qualifying them for specified export benefits.

Person-in-Charge [Section 2(31)]

The individual responsible for the operation and conduct of a conveyance: the Master for a vessel, the Commander/Pilot-in-Charge for an aircraft, the Conductor/Guard for a railway train, or the Driver for any other conveyance.

Prohibited Goods [Section 2(33)]

Any goods whose import or export is completely banned under the Customs Act, 1962, or any other law, excluding goods allowed upon fulfilling specified conditions.

Section 11(1) of the Customs Act, 1962

The legal provision granting the Central Government the authority to prohibit the import or export of goods of specified descriptions for purposes listed under Section 11(2).

Basic Customs Duty (BCD)

The standard duty levied under Section 12 of the Customs Act, 1962, on imported goods based on tariff rates in the First Schedule of the Customs Tariff Act, 1975.

Countervailing Duty (CVD) in lieu of Excise Duty

A duty under Section 3(1) of the Customs Tariff Act, 1975, designed to counterbalance domestic excise duty on similar items produced in India, now largely subsumed under GST.

Additional Customs Duty [Section 3(3)]

A duty imposed on imported goods when the domestic excise duty is based on retail sale price (MRP) to ensure price parity with domestically produced goods.

Special Additional Duty (SAD)

A duty levied under Section 3(5) of the Customs Tariff Act, 1975, at a rate not exceeding $4\%$ to counterbalance local sales tax or VAT, withdrawn since the rollout of GST.

Protective Duty [Section 6]

A duty imposed under the Customs Tariff Act, 1975, upon recommendation by the Tariff Commission, to protect domestic industries against cheaper foreign imports.

Anti-Dumping Duty [Section 9A]

An exporter-specific duty imposed when goods are exported to India below their normal home market value, valid for an initial period of $5$ years and extendable up to $10$ years.

Safeguard Duty [Section 8B]

A product-specific duty levied when sudden, significant surges in imports threaten serious injury to domestic producers, imposed for $4$ years and extendable up to $10$ years.

Countervailing Duty on Subsidised Goods [Section 9]

A duty levied under the Customs Tariff Act, 1975, to neutralize export subsidies or tax concessions granted by a foreign government to imported goods.

National Calamity Contingent Duty (NCCD)

A surcharge imposed under Section 136 of the Finance Act, 2001, on products like tobacco, pan masala, and cigarettes to fund relief for national calamities.

Social Welfare Surcharge (SWS)

A surcharge levied under Section 110 of the Finance Act, 2018, @ $10\%$ on aggregate customs duties to fund education, health, and social security schemes.

Road and Infrastructure Cess

A cess levied under the Finance Act, 2018, on the import of petrol and diesel (initially $\text{₹}8$, later increased to $\text{₹}9$ per litre) to finance infrastructure.

Health Cess on Import of Medical Devices

A cess levied @ $5\%$ under the Finance Act, 2020, on medical devices under Headings 9018–9022 to encourage domestic production under the Make in India initiative.

Integrated Goods and Services Tax (IGST) [Customs]

A tax levied under Section 3(7) of the Customs Tariff Act, 1975, on imported goods treated as inter-State supplies under Article 269A of the Constitution of India.

GST Compensation Cess

A cess collected under Section 3(9) of the Customs Tariff Act, 1975, on imports of luxury and demerit goods (e.g., aerated drinks, motor vehicles) to compensate states for GST revenue losses.

Territorial Waters

The coastal sea belt extending up to $12\text{ nautical miles}$ (approximately $22\text{ km}$) from the baseline, over which India exercises full sovereign control and customs jurisdiction.

High Seas

All oceanic areas outside territorial waters, internal waters, or Exclusive Economic Zones (EEZ)—starting beyond $200\text{ nautical miles}$ from the baseline—which are open to all nations.

Coastal Goods [Section 2(7)]

Goods transported by sea from one Indian port to another Indian port without leaving Indian territorial waters.

Exporter [Section 2(20)]

Any person who, in relation to goods, is the owner or holds himself out to be the exporter at the time the goods are presented for export.

Imported Goods [Section 2(25)]

Any goods brought into India from abroad, excluding goods that have already received customs clearance for home consumption.

Importer [Section 2(26)]

Any person who, in relation to goods, is the owner or holds himself out to be the importer at the time of import.

Green Channel

An expedited customs clearance facility for compliant and trusted traders where consignments are released without mandatory physical examination.

Export Goods [Section 2(19)]

Any goods that are to be taken out of India to a place outside India, starting from presentation at the customs port until they cross Indian territorial waters.

Customs Area [Section 2(11)]

The designated area of a customs station or warehouse where imported or export goods are ordinarily held under official customs control before clearance.

Import Manifest

A mandatory declaration document submitted by the person-in-charge of a vessel or aircraft prior to arrival, detailing the cargo, package marks, and consignees.

Transaction Value Method (Rules 3 & 4)

The primary method of valuation where customs duty is assessed on the actual price paid or payable for goods sold for export to India between unrelated parties.

Transaction Value of Identical Goods (Rule 5)

A secondary valuation method based on the transaction value of identical goods produced by the same manufacturer in the same country imported at or about the same time.

Transaction Value of Similar Goods (Rule 6)

A valuation method based on imported goods that have like characteristics and component materials performing the same functions, applied when identical goods data is unavailable.

Deductive Value Method (Rule 7)

A customs valuation method calculated from the domestic selling price of imported goods in India after deducting post-importation profits, general expenses, duties, and transport.

Computed Value Method (Rule 8)

A valuation method determined by adding the exporter's cost of production, profit margin, general expenses, and transport, loading, and insurance charges.

Residual / Fallback Method (Rule 9)

The final valuation method that applies reasonable means consistent with Section 14 and valuation rules when none of the earlier sequential methods can be used.

Importer Exporter Code (IEC)

A mandatory PAN-based 10-digit alphanumeric registration number issued by the DGFT with lifetime validity, required for import-export transactions in India.

Entry Inwards [Section 31]

The formal approval given by a customs officer allowing a vessel or aircraft to discharge its cargo, which also fixes the critical date for the applicable rate of duty.

Let Export Order

The official permission granted by a customs officer under Section 51 authorizing the exporter to load cargo on board a vessel or aircraft after examination and clearance.

Entry Outwards [Section 39]

The official authorization granted by a customs officer to the person-in-charge of a conveyance, without which export goods cannot be loaded on board.

Export General Manifest (EGM) [Section 41]

The final cargo document filed by the person-in-charge of a conveyance prior to departing India, which acts as legal proof of export.

General Exemption [Section 25(1)]

An exemption from customs duty notified by the Central Government in the Official Gazette in the public interest, which may be absolute or subject to conditions.

Special Exemption [Section 25(2)]

An exemption granted by the Central Government via a special order for individual cases under exceptional circumstances, such as for strategic defense or charitable goods.

Harmonised System of Nomenclature (HSN)

An international six-digit coding and naming system created by the World Customs Organization (WCO) in 1988 for uniform classification of goods in trade and GST.