Import Duty is a type of tax imposed by a government on goods imported from other countries. It serves multiple purposes ó to generate revenue, protect domestic industries from foreign competition, and regulate the balance of trade. The duty is usually calculated as a percentage of the productís declared value, including cost, insurance, and freight (CIF).

In India, import duties are administered by the Central Board of Indirect Taxes and Customs (CBIC) under the Customs Act, 1962. The applicable rate of duty depends on the nature of goods, their classification under the Harmonized System of Nomenclature (HSN), and any existing trade agreements or exemptions.

Types of Import Duty:

• Basic Customs Duty (BCD): The standard duty levied on imported goods as per the Customs Tariff Act.
• Integrated Goods and Services Tax (IGST): Charged on imported goods in place of domestic GST to ensure tax parity.
• Social Welfare Surcharge: An additional levy to fund social welfare programs, calculated on the total customs duty.
• Anti-Dumping Duty: Imposed to counteract unfairly low-priced imports that harm domestic industries.

Example: If a company imports machinery worth ?10 lakh with a 10% basic customs duty and 18% IGST, the importer would pay ?1 lakh as BCD plus applicable IGST and surcharges, increasing the total import cost.

Significance: Import duties help regulate foreign trade by encouraging the consumption of locally manufactured goods and ensuring fair competition. However, excessively high duties can increase costs for businesses and consumers, potentially affecting inflation and economic growth.

Conclusion: Understanding import duties is essential for traders and businesses engaged in international commerce. Efficient duty planning can help optimize costs, ensure compliance, and support sustainable trade operations within the regulatory framework.