Customs Duty

Document Sample
Customs Duty Powered By Docstoc

                                Customs Duty

Customs Duty synonymous to tariff and involves a tax on commodities entering
and leaving the country. Customs duty is sometimes called an 'external excise tax',
which includes an export duty or an import duty. The origin of customs duty dates
back to the 'customary levies' of ancient times. As recorded in the Kautiliyam
Arthasastram (circa 321-300 BC), the highest revenue officer of the time was
called the Samaharta (collector-general) and his responsibility was to arrange
revenue collection from seven types of places, of which the seventh was the
vanikpaths (trade routes) of 2 kinds, land routes and sea-routes. The subcontinent
witnessed the levy of chungi during the Mughal period (1526-1707). The country
was then divided into subas or provinces and chungi was leviable on commodities
moving from one province to the other. Customs levy were also imposed on goods
imported from abroad by sea. Chungi ghar of those days were perhaps the
precursor of today's customs house. In British India, Lord Cornwallis abolished
customs duty in 1788 but it was reintroduced again in 1801. Collection of customs
duty in 1839-40 was Rs 4,103,298 accounting for 5% of public revenue. In the
early twentieth century, 'taxes on imports and exports' were the seventh major
source of public revenue.

The present customs system came into being in the nineteenth century. The entire
law and machinery for collection was consolidated in 1878, when the Sea Customs
Act was enacted on the pattern of the British customs law, giving legal authority
for the levy and collection of customs duty. The administration was initially vested
in the provincial government until 1924, when it was brought under the central
control with the establishment of the Central Board of Revenue (CBR) under CBR
Act of 1924. The Land Customs Act was also promulgated in 1924 to enable the

central government to enforce control on the movement of goods and passengers
by land routes and frontiers from the subcontinent to adjoining territories and vice
versa or in transit from one country to the other via the subcontinent. The Customs
Act 1969 was enacted to consolidate and amend the law relating to the levy and
collection of customs duties and provide for allied matters. As a result, under
Section 220 of the Customs Act 1969, four acts (the Sea Customs Act 1878, the
Inland Bonded Warehouses Act 1896, the Land Customs Act 1924, and the Tariff
Act 1934) and Section 14 of the Civil Aviation Ordinance 1960 were repealed.
This put an end to legal features, which had so long separated the sea customs, land
customs, and air customs from one another. After the emergence of Bangladesh,
the government abolished CBR and created     NATIONAL BOARD OF REVENUE       (NBR)
as the apex tax authority with power to take over customs administration. The
Customs Act was made effective in Bangladesh by President's Order no. 48 of
1972 with effect from 01 January 1970.

The primary function of the customs authority is the administration of revenue
under the Customs Act 1969 and the Value Added Tax Act 1991. The customs
authority is responsible mainly for assessment and collection of customs duties,
VALUE ADDED TAX,     supplementary duty and other taxes and charges leviable on
imported or exported goods. Its collateral function includes prevention of
smuggling, implementation of the Imports and Exports (Control) Act 1950, and the
enforcement of the Foreign Exchange Regulation Act 1947. In its auxiliary
function, the customs authority also maintains the security measures under
different statutes, namely the Arms Act 1878, the Explosives Act 1884, the
Merchandise Marks Act 1889, the Livestock Importation Act 1898, the Narcotics
Control Act 1990, etc.

Duties and taxes collected on international trade now comprise the largest share of
tax revenue in Bangladesh. More than three-fourth of total taxes comes from
indirect taxes, about 70% of which is collected at customs-station. Customs duties
represent about 30% of total tax or about 40% of indirect tax. However, due to
tariff reduction after the signing of the World Trade Organisation (WTO)
Agreement, the share of customs duty in the tax structure has been falling in recent

Collection from The Banglapedia.
Abdur Rab (forhad)
Department of Public Administration.
Jahangirnagar University
Dhaka, Bangladesh.

Shared By: