Know About Indian Custom Duty

”Custom Duty” is just a tax system imposed on imports & exports of products to and from any country in the world. It is levied by the customs authorities of India to hike state revenue and to defend local industries from predatory opponents from foreign countries.

This is completely based on the value of commodities/goods or upon the dimensions, weight or other criteria of an item/product (like the size of the engine in case of vehicles). Export and import business is an area that needs the movement of products on every border.

Every country has its own rules and regulations about tax. If we are talking about India, a few months back Customs Duty India has hiked on several products including refrigerators, jet fuel, and ACs. Complete import bill on account of a consignment of these products/goods into the nation last fiscal was Rs 86,000 crore, finance minister of India said in a statement.

Other products comprise jewelry products, plastic articles, suitcases, speakers, washing machines, radial car tyres, and tableware.

After this change, import duty was doubled to 20% on washing machines, ACs, and refrigerators (less than 10kg). All these changes in the prices of basic custom duty have applied from midnight of September 26 to 27, 2018. Cutting non-essential imports was part of the 5 pronged steps announced by the Indian government in order to check dispersal capital outflows and account deficit.

Custom Duty is a tax that one should pay for exporting and importing products. Now check out some types of this tax system:-

• Basic Customs Duty- This one is imposed on the value of the products at a specific rate. It is fixed at a specified rate of ad-valorem basis.

• Countervailing Duty- It is levied by the central government when a nation is giving the subsidy to the exporters who are exporting products to India.

• Special CVD or Additional Customs Duty- To equalize imports with local taxes such as VAT, service tax and other local taxes which are levied from time to time, this tax system is imposed on imported products.

• Safeguard Duty- This one is levied to safeguard the attention of local domestic industries and also ensure that no harm is caused to the Indian domestic industries.

These are some types of Custom Duty that you should have known if you’re a part of the import-export industry.

Seair Exim also provide export import data, export import data India, free HSN code search, GST rates calculator and many other resources for import export business.

Trading Participant of India with Trade Statistics

India received 40% of the GDP from foreign trading. Still, India is a trade deficit country. However, the percentage of differences is 10% to 20% only. Hence, India’s trade deficit is not going to affect our economy. India does levy a higher import duty on anti-dumping goods. Thus, it checks such bad practices in imports. India trades with WCO listed countries. Hence, it exports and imports from more than 100 countries of this world. You can check such details as of 2020 on Seair Exim Solutions. They are a trusted export-import data provider and market research firm in India.

Trading Participant of India

India’s major export participants are to the below-mentioned countries.

• United States-16.8%
• United Arab Emirates- 9.1%
• China- 5.3%
• Hong Kong- 3.6%
• Singapore- 3.3%
• Netherlands- 2.8%
• United Kingdom- 2.7%
• Germany- 2.7%
• Bangladesh- 2.6%
• Nepal- 2.2%

India’s major import participants are to the below-mentioned countries.

• China- 14.3%
• United States- 7.3%
• United Arab Emirates- 6.3%
• Saudi Arabia- 5.6%
• Iraq- 4.6%
• Switzerland- 3.7%
• Hong Kong- 3.6%
• South Korea- 3.4%
• Indonesia- 3.3%
• Singapore- 3.1%

Top trading participant of India is theUnited States, China, and the United Arab Emirates. All these developed countries are depended on exports f their finished products and they need Indian goods as raw materials. Hence, a trade balance happens and demand and supply are fulfilled by exporting goods to those top foreign trade partners and importing goods from them to India. Hence, the trade value is in billion USD every year. Here, a few goods are exempted from customs duty. The goods received in India are automobiles, heavy machinery, and crude oil and food products.  

The main trading participant of India varies with seasons. India exports food grains soon after the harvest season. Thus, it exports them to Southeast Asian countries, African countries, and neighboring countries like Nepal, Bhutan, Pakistan, and Sri Lanka. We do import goods from other countries as raw materials and finished goods. Thus, the main trading participants for crude oil are Middle East countries, China for plastic articles, and The United states for supplying textiles.

You can check seair.co.in for any export-import details. You will get goods in trade with HS codes, and tariffs. Here, you can check with the list for most preferred trading nations, duty-free trading countries, and goods type from India and to India by imports.

SEAIR EXIM Solutions is a trusted Exim data providing company. It provides global trade data of 80+ countries in the world. Or major services are import export data, Indian Import Data, Export data India, HSN code, Custom duty of India, GST rates and so on.

SAC code and HSN code for Businessmen online

Since the concept of overseas sailing came into the picture, many exports and imports take place within the countries. Within this transactional system, various products are being transacted all over the world irrespective of having different language barriers. Hence know the concept of HSN codes which are regarded as an integral part of international trade, nowadays.

Along with that, it has been observed that during the import of goods and services, various taxes are levied on the products. Even when the products get into the market, again the sales tax gets levied on it. Overall, it gave rise to a double taxation system. In order to avoid such circumstances, the Government has introduced the GST system in India. SAC or Service Accounting Code and HSN code, both are used under the regime of GST.

Description of SAC Code and HSN code

While discussing, we came across two types of concepts, SAC code finder and HSN code. Before any further discussion, let me know about the SAC code and HSN code.

•   HSN code: In order to classify the goods all over the world, the World Customs Organization or WCO introduced a new concept of Harmonized System of Nomenclature or HSN code.  It is a six-digit number provided by World Customs Organization, in order to classify the products all over the world. These numbers defined certain sets of rules and regulations related to the taxation system which are levied on certain products. Such HSN often helps the custom authority to identify the types of products and other product details. These HSN numbers also generate information that helps the traders to track the movement of products around the world. The custom authority also used such HSN code to find out the quantum of the goods that are imported and exported out of a particular country.

The HSN code that is provided by the World Customs Organization or WCO, is accepted worldwide. Such a coding system is adopted by more than two hundred countries in the world. The experts believe that it is one of the best systems of logic that help to classify as well as identify the products that are introduced in the international trade market.

•   SAC code: SAC code or Service Accounting Code are the codes that are developed by the Central Board of Excise and Customs (CBEC) of India, which is generally used to categorize the various services under the GST (Goods and Service Tax). It is generally used to classify the different services, which is similar to the HSN code. Normally the traders often used to gain the SAC code of their services with the help of the SAC code Finder.

Difference between SAC code and HSN Code

Both the SAC code ad HSN code is the coding system which is used for tax determination, on the products that are transacted during export and import.

Though both the SAC and HSN code are used for tax determination under GST in India, yet it has certain slight difference between them. Under the regime of GST or Goods and Service tax, In India, the goods and services are classified into two. They are HSN code or Harmonized System of Nomenclature and SAC or Service Accounting Code.

First, The SAC codes are issued by the CBEC, whereas the HSN code is issued by WCO.

Secondly, the HSN code deals with the taxation system related to Goods or products, whereas, the SAC related to Services.

How to access the SAC code finder?

In order to get the SAC code, one needs to follow the given procedures.

First, log in to SAC code finder like legal docs.co.in and visit the HSN page search.

Second, there, a dialogue box will appear where you need to choose an option, here you will choose services.

Third, mention the category on which you need the SAC code.

Fourth, after mentioning, you will get the SAC code on a list defined on the given page.

Importance of SAC code and HSN code

In India, both the SAC code and HSN code are quite important for the international trading system. Along with that both the SAC code and HSN code are used in the taxation system of India, related to goods and services. Well, let’s first know the importance of both one by one.

• HSN code: Though the primary function of this HSN code is to classify the various goods which are accepted worldwide. Yet, it can also be helpful for gathering all certain data which often used to solve various problems related to the import and export system. Other than these, some additional benefits that are provided by the HSN code are as follows:
  • The HSN code often helps to collect information including statistical data on international trade.
  • The custom authority gains the provision on the basis of rationality for the customs tariffs regarding the international trading system.
  • The HSN code is a unique and uniform numerical value levied on each and every product which is often accepted by countries all over the world.
  • During the import and export of products, this HSN code provides information about the products and also help in the taxation system,

•   SAC codes: In India, the SAC code or Service accounting code generally related to the services. While introduction of Goods and service tax, the HSN code is used for classifying products, whereas the SAC codes are used to classify the service tax. In case of the taxation system, these SAC code holds prime importance. it is believed that with the help of SAC codes, problems like the double taxation system can be overcome, though GST was introduced to deal with the problem related to the tax.

The SAC codes hold prime importance for international trade as well as domestic business. While filling the GSTR form, one needs to use this SAC code.

Conclusion

Hence, from the above discussion, we can conclude that the SAC code and HSN code, both are important for private traders as well as the government of a country. It can be said that having a common structure of SAC code and HSN code, often enables the countries to initiate the collaboration on the basis of buying and selling of various products. It also helps the customs authority to levy proper tax rates on the products that in turn helps to file the GST return more easily and at an accurate rate.

SEAIR EXIM Solutions is a trusted Exim data providing company. It provides global trade data of 80+ countries in the world. Or major services are import export data, Indian Import Data, Export data India, HSN code, HS code finder, GST rate hs code and so on.

Free Update Custom Duty India Online

In India, the indirect taxes that the Indian government levied on all imported and exported products and services are known as custom duty. The tax that is mainly levied on imported goods and services within India is called Import Custom Duty. The Indian government charges these taxes to raise funds as revenue to provide an equal level of competition to the domestic company establishments from other countries. For the past couple of years, the government has changes the system to collect indirect taxes and introduced (GST) goods and services tax which is applicable from 1 July 2017.

Earlier before GST many taxes like state tax, central excise, service tax, value-added tax, etc. We’re added on the good that for imported to India but now all these taxes are replaced by just one tax i.e GST. GST is divided into three categories: – Central Goods and Services Tax, States Goods and Services Tax, and IGST Integrated Goods and Services Tax also known as CGST, SGST, and IGST. Both CGST and SGST are for intra-state transactions but IGST is imposed on all the imported products in India. In India there are five slabs of IGST is available i.e 0%, 5%, 12%, 18% and 28%.

Calculation of Custom Duty India The valuation for the import customs duty in India is governed by the Customs Act of 1962. India’s tax rates system is based on the Harmonized System of Nomenclature (HSN) of the Customs Co-operation Council. The rate of customs duty depends upon the HSN Codes of the products. For calculating rates of import duty we have four variable values that are as follows:-

1. IGST:- In India import custom duty is collected in the form of IGST. Indian government levy IGST on the goods and services whether available at low cost or high cost like jewelry stones etc, IGST charge is calculated as the value of goods imported to India + any customs duty chargeable on the goods.

Value on which IGST is based= price of Goods imported + any chargeable Customs Duty + Social Welfare Surcharge

IGST Payable= Value on which IGST calculated * IGST current Rate for the product

2:- Basic Customs Duty (BCD):- This duty is calculated on the value of the goods and services that have landed at the customs border of India. Its range varies from 0% to 100%. Its value also depends upon the HSN code of the product and the Country in which the product is delivered. Also, the Ministry of finance revises its rate from time to time. 

3:- GST Compensation Cess

GST Compensation Cess is imposed as an additional cess on GST on imported items as well as on domestic item that is being manufactured in India. The imported items on which cess is charged are mostly levied on goods belonging to the luxury and demerit category.

4:- Social Welfare Surcharge:- This welfare charge is the tax imposed ON CD value along with the value of goods and services. It is generally 10% of the value of goods or this surcharge is exempted from the tax.

SEAIR EXIM Solutions is a trusted Exim data providing company. It provides global trade data of 80+ countries in the world. Or major services are import export data, Indian Import Data, Export data India, HSN code, HS code finder, GST rates and so on.

Get the Right Product Specific custom duty on import

Custom Duty India is an indirect tax charged on import and export of goods and other manufactured products. In India, we want to import any good from outside countries, or likewise, if we want to export any product to another country then a tax is being charged by the central government. Taxes have been divided into two parts of which one is a direct tax and another one is an indirect tax. Initially, there were a lot of things in in-direct tax but nowadays for most sales, GST is being applied, but Custom Duty India has not immersed in GST. Custom duty is governed by entry number 83 in the union list, hence it is lived and collected by the central government. Custom act 1952 and custom tariff tac 1975 are the predominant sources of customs laws in India.

The objective of Custom Duty India

We listen on daily basis about a recent trade war in China and the USA, and we observe that if we import too much quantity of good from other countries then we are very powerful. Because for other countries we are the biggest market to sell their products and services to us. If we have some industries in our country but some user still wants the foreign products then what about the sales of our own country’s industry. Let us take the example of any research lab machinery. We are a great medical equipment hub here in our country but some users or researchers still want the machinery being manufactured in foreign countries this is based on the quality and accuracy in their research. As the economy is open then it will happen here without any other restriction than what about our industries. Their growth will stop. This will further impact our GDP. Hence Government raised a tax on imported products which increase the cost of that product. Some time production of a specific good in industry increase and at that time government raise tariff so that most of the customers should go with their own country’s product. If sometimes the production is less then these tariff gets low so that one can easily import the goods from other countries. All these kinds of stuff are being controller by custom duty India.

• It restricts imports intending to conserve foreign resources.
• A policy tool has been served by custom duty just to protect imports and exports.
• Custom duty India can impact the dumping of foreign goods.
• It intends to protect the domestic industries against foreign goods.
• It restricts the smuggling activities too.

Features of Custom Duty on import

• It is an indirect tax levied on imports and export.
• Custom duty is applied only on goods or products and not on services.
• It is subjected to a social well-fare charge which is 10% of the aggregate of duties.

Types of custom duties :

• Basic Custom Duty – Also called BCD custom duty on import is being charged and also in some of the export done. Here different rates are applied, which varied between 4% to 40% according to the product which is being exported or imported.
•  
• Social welfare surcharge – This duty was introduced in the 2018 budget. It is levied in place of education. The rate of SWS is 10% of the value of BCD.
• Integrated goods and service tax which is also called IGST. After the announcement of GST in India, all imports are deemed to be treated as an inter-state supply of goods and services. Hence IGST is levied on all the imports which are up to 40%.
•  
• GST compensation Cess – After GST some states may have less collection of revenue in terms of GST. To compensate for the loss, The GST compensation cess is introduced by the central government on the import of luxury & sin goods. 

Custom duty India for goods and services 

• If the one is importing the goods then both custom duty and IGST will be applied to the goods. 
• For importing of services, there will be no custom duty on import and no IGST as well.
• Same for the export of goods, a customs duty will be applied as the goods will be rated as the supply of the GST.
• Also for exporting of goods, no custom duty India as well as IGST will be applied. 

This was all about custom duty, Here we have seen very clearly that how custom duty India is playing a vital role in exporting and importing the goods and other needful products in India. While doing any shipment, a customs duty specialist is always there, Who does the complete verification of the products as well as the documents related to that. This verification is being done by checking the HSN code of the product in the system. Then he/she does analyze the product physically. Also the verification of all the applied taxes done there. After getting complete details and verification, the customs duty specialist gives clearance to the department and allows for the shipment process if exporting is there and entry of the goods if importing is there. If full detailed documents have not been provided at the customs office then shipment will get hold there and then the manufacturer and exporting partner has to face the consequences of the same. So, the manufacture and importer have to be well-aware of t8he role of custom duty on import and also have to be updated about the taxes and customs clearances before going through any import and export process.

SEAIR EXIM Solutions is a trusted Exim data providing company. It provides global trade data of 80+ countries in the world. Or major services are import export data, Indian Import Data, Export data India, hs code search, GST rates and so on.

Know the SAC code for any Service

The SAC (Service and Accounting Code) code is a system based on a codified system of nomenclature by which all products exported and imported into the world are classified, and a system for codifying products recognized internationally. These codes make it easy to understand and classify the products.

There is a 6 digit code in GST which is the classification of the products. For example, the SAC code for Design and Development Services under Information Technology (IT) is 997764. The first two digits in the code given under SAC are same for all types of services i.e. 99.

Use SAC code

SAC codes are an important part of import and export business. The businessmen should use the SAC code for providing the service while filing the GSTR.

What is SAC Code?

A classification system issued by the Service Tax Department of India to classify certain different services to business (CBIC) and to develop the business itself is expressed as SAC or Service Accounting Code. These codes are used to classify products and services to classify products for better measurement, taxation associated with them and recognition of services. SAC codes are used to classify services and are regulated by the Central Board of Excise and Customs (CBEC).

The SAC (Service and Accounting Code) codes have been developed on a harmonized system of naming the products through which all the products of the world are classified and codified primarily for import and export and these SAC codes are established on an international level recognized system. Through this system, it is important to understand the products on the basis of international standards and enable them to comply with GST. This system provides the government with a common structure from which the data related to the sale and purchase of products is needed for the appropriate type of collaboration and analysis.

Understanding 6 Digit SAC in GST

Take as an example

  The SAC code given for Information Technology (IT) Design and Development Services is 998314.

• The first two digits in the given SAC code are the same for all services which is 99.
• The two digits in the middle of the code indicate the predominant nature of services, in the given code these are IT services
• The last two digits indicate the broad nature of the services. In the given code these are showing the design and development services.

SAC Code List

Section 05 – Construction related services

               Title                         Product Description

• 9954                         Construction related Services

Section 06 – Distributive business services; Accommodation, food and beverage service; transport related services; Gas and electricity related distribution services

              Title                              description

• 9961                              Wholesale Trade Related Services
• 9962                              Retail trade related services
• 9963                              Services relating to accommodation, food and beverage services
• 9964                                PASSENGER TRANSPORT RELATED SERVICES
• 9965                                Services related to transport of goods
• 9966                                Rental services for transport vehicles with or without operators
• 9967                                 Services related to assistant in transport
• 9968                                Postal and Courier Related Services
• 9969                               Electricity, gas, water and other distribution related services

Section 07 – All financial and related services; services related to real estate; and rental and leasing services

              Title                                      description

• 9971                                     Financial and related services
• 9972                                     Real Estate Services
• 9973                                      Leasing or rental related services with or without operator

Section 08 – Services relating to trade and production

              Title                                   description

• 9981                                  R&D Services
• 9982                                 Legal and Accounting Services
• 9983                                 Other professional, technical and business related services
• 9984                                 Services relating to telecommunications, broadcasting and information supply
• 9985                                 Support related Services
• 9986                                 Services related to agriculture, hunting, forestry, fishing, mining and support for utilities.
• 9987                                 Services relating to maintenance, repair and installation (excluding construction)
• 9988                                 Services relating to manufacturing on physical inputs (goods) owned by others
• 9989                                 Other services related to manufacturing, publishing, printing and reproduction services; material recovery services

Section 09 – Services relating to community, social and personal and other miscellaneous

               Title                                    description

• 9991                                  Other types of services connected with public administration and provided to the community as a whole; Essential Social Security Services
• 9992                                   Education Related Services
• 9993                                   Services related to human health and social care
• 9994                                   Sewage and waste collection related services or connected, treatment and disposal and other services related to environmental protection
• 9995                                   Services related to membership organizations
• 9996                                   Recreational, cultural and sporting services
• 9997                                    Other Miscellaneous Services
• 9998                                     Domestic Services
• 9999                                     Services provided by extraterrestrial organizations and bodies.
• 9954                                     Construction Services

Section 06 – Distributive business services; Accommodation, food and beverage service; transport related services; Gas and electricity related distribution services

                     Title                                       description

• 9961                                      Wholesale Trade Related Services
• 9962                                      Retail trade related services
• 9963                                       Services relating to accommodation, food and beverage services
• 9964                                       Passenger transport related services
• 9965                                      Services related to transport of goods
• 9966                                      Services relating to rental of transport vehicles with or without operators
• 9967                                       Services related to assistant in transport
• 9968                                       Postal and Courier Related Services
• 9969                                        Electricity, gas, water and other distribution related services

SAC code finder

HSN and SAC codes can be distinguished by the difference that HSN codes are used to identify the identity of goods and SAC codes are used to understand and identify different types of services. Another difference between these two types of codes is the number of digits presents in the code, e.g., HSN code consists of 8 digit codes for products, and SAC codes contain 6 digit codes for services.

To find tax rates linked to HSN/SAC

• Go to the homepage of the GST linked portal and login with all the valid credentials
• Click in the box of HSN Code
• Select tax type
• Search Chapter of HSN by service or product name or code
• Find and click on HSN Code
• Select the appropriate dates through the calendar and click on it
• Click on the search option for “Search”
• Find and select the state.

• Click on the checkbox for SAC code.
• Select tax related type
• Enter the Classification Code (SAC) for the service and click
• Also enter whatever Service Classification Code (SAC) you are looking for under “Service by Name or Code”.
• Select the appropriate correct dates in the “Effective period” category through the calendar.
• Click on the option of “Search” and get information about the related services

SEAIR EXIM Solutions is a trusted Exim data providing company. It provides global trade data of 80+ countries in the world. Or major services are import export data, Indian Import Data, Export data India, HSN code, GST Rates India and so on.