abhishreshthaa
Abhijeet S
CLASSIFICATION OF TARIFFS:
B. On The Basis Of Quantification Of The Tariff:
Here, tariffs may be classified into the following three broad categories:
1. Specific Duties: a specific duty is a flat sum per Physical Unit Of Commodity Imported. Here, the rate of duty is fixed and is collected on each unit of the commodity imported.
For example Rs.5 on each meter of cloth or Rs.500 on each washing machine or TV set imported or Rs.200 on each barrel of crude oil imported.
Such duty is collected when goods enter in the country through sea or any other means of transport. Such duties can be made protective for achieving different objectives.
2. Ad-Valorem Duties: ad-valorem duties are imposed as fixed percentage of The Value of Commodity Imported. Here, the value of commodity imposed is taken as base for the calculation purpose.
F.O.B. value or C.I.F. value of invoice is used for the purpose of calculation of duty. For example, 5% ad-valorem duty on watches imported from abroad. This type of duty is imposed on goods whose value cannot be easily determined e.g. work of art, rare manuscripts, etc.
3. Compound Duties- the tariff is referred to as compound duty when a commodity is subject to the both specific and ad-valorem duties. Such duty may also be called as mixed or combined duty. For example, on a cloth imported 15%duty may be imposed on the F.O.B. value of import of cloth.
In addition, Rs. 3 may be charged per each meter of cloth imported. As a result, the tax burden on the imported cloth will be more and import of cloth will be more and import of cloth will be discouraged.
B. On The Basis Of Quantification Of The Tariff:
Here, tariffs may be classified into the following three broad categories:
1. Specific Duties: a specific duty is a flat sum per Physical Unit Of Commodity Imported. Here, the rate of duty is fixed and is collected on each unit of the commodity imported.
For example Rs.5 on each meter of cloth or Rs.500 on each washing machine or TV set imported or Rs.200 on each barrel of crude oil imported.
Such duty is collected when goods enter in the country through sea or any other means of transport. Such duties can be made protective for achieving different objectives.
2. Ad-Valorem Duties: ad-valorem duties are imposed as fixed percentage of The Value of Commodity Imported. Here, the value of commodity imposed is taken as base for the calculation purpose.
F.O.B. value or C.I.F. value of invoice is used for the purpose of calculation of duty. For example, 5% ad-valorem duty on watches imported from abroad. This type of duty is imposed on goods whose value cannot be easily determined e.g. work of art, rare manuscripts, etc.
3. Compound Duties- the tariff is referred to as compound duty when a commodity is subject to the both specific and ad-valorem duties. Such duty may also be called as mixed or combined duty. For example, on a cloth imported 15%duty may be imposed on the F.O.B. value of import of cloth.
In addition, Rs. 3 may be charged per each meter of cloth imported. As a result, the tax burden on the imported cloth will be more and import of cloth will be more and import of cloth will be discouraged.