AD VALOREM DUTIES V/S SPECIFIC DUTIES

[abhishreshthaa]

AD VALOREM DUTIES V/S SPECIFIC DUTIES:



1) Meaning:

They are expressed or fixed as a percentage of the CIF price of the goods imported.

They are expressed or fixed as a specific amount of currency per unit of weight or volume.



2) How imposed?
Here, duty is on the CIF price as well as on the quantity imported.


Here, duty is on the quantity imported and not on the CIF price.


3) Effect of price:

If import prices rise, ad Valorem duties also rise and this aggravates the protective effect. If prices fall the protective effect will be reduced.


Specific duties are not affected directly due to increase or decrease in the prices.


4) Execution:

Ad Valorem duties create the problem of valuation as importers will like to put low value while revenue authorities tend to put the value at a higher level.


Valuation problem is absent in specific duties. Moreover, disputes in the calculation are absent as duty is related to weight, quantity or volume which can be measured correctly.

 

[Business-education]

Definition of AD valorem

Method for charging a duty, fee, or tax according to the value of goods and services, instead of by a fixed rate, or by weight or quantity.

Definition of specific duty

A specific rate duty is a tariff levied on imports, defined in terms of a specific amount per unit, such as cents per kilogram. By contrast, an ad valorem duty is a charge levied on imports defined in terms of a fixed percentage of value.

 

[jitendra05]

AD VALOREM DUTIES V/S SPECIFIC DUTIES:



1) Meaning:

They are expressed or fixed as a percentage of the CIF price of the goods imported.

They are expressed or fixed as a specific amount of currency per unit of weight or volume.



2) How imposed?
Here, duty is on the CIF price as well as on the quantity imported.


Here, duty is on the quantity imported and not on the CIF price.


3) Effect of price:

If import prices rise, ad Valorem duties also rise and this aggravates the protective effect. If prices fall the protective effect will be reduced.


Specific duties are not affected directly due to increase or decrease in the prices.


4) Execution:

Ad Valorem duties create the problem of valuation as importers will like to put low value while revenue authorities tend to put the value at a higher level.


Valuation problem is absent in specific duties. Moreover, disputes in the calculation are absent as duty is related to weight, quantity or volume which can be measured correctly.

Hey abhi, very nice work! I really appreciate your effort and thanks for sharing such a nice information. Well, i have also got a document which contains important information regarding the topic and i would like to share it with you, so please download and check my presentation.