Define custom duty / tariffs
Custom duty is a duty on import and export .In the old time when any businessman comes comes in any country for selling of goods he had to give gift to the king of that country. This custom of presenting is called custom duty .Its other name is tariffs .
First law of custom is sea custom Act 1878 . Now this is replaced with the custom act 1962. This laws have the provision for levy custom duty , powers and appointment of officer , exemption of custom duty.
Role or objective or effect of custom duties or tariffs on the foreign trade.
1 Protection of domestic industries
If govt. wants to protect the domestic industry. The Govt. will impose the custom duty on import , with high rate . The effect is that , it reduce import the competitive goods in India.Now domestic industries can sell their product and earn money.
2. Safeguarding of natural resources:-
If Govt. think that people or exporter are using their natural source and export them for their own benefit which is very harmful for environment . Then Govt. will impose the duty on export with higher rate.
3. Revenue or income of Govt.
Custom duty is source of Govt. income . Government can increase income through this source.
4. Increase or decrease the foreign market:-
Govt.’s custom duty has effect for increase or decrease the foreign market.