How to Calculation Customs Import Duty?

Customs Duty is a tariff or tax imposed on goods when transported across international borders. The purpose of Customs Duty is to protect each country's economy, residents, jobs, environment, etc., by controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.

Necessary Part of Customs Duty

• Knowledge enhance for proper H.S Code of your imported products.
• Product identified by H.S Code.
• Every country H.S Code used by individual.
• H.S Code means is Harmonized System.

Valuation of the Base

Assessable Value/ Transaction Value: (C&F value X Conversion rate) + Insurance Cost + Landing Charge (Now determined by PSI Companies)

Infrastructure Development Surcharge (IDSC): (Assessable value X IDSC)

Custom Duty: (Assessable value including IDSC X Custom duty)= Duty paid value

Valuation of the Base

Supplementary Duty: (Duty paid value X SD)

VAT =( AV+IDSC+CD+SD except advance income tax) X VAT rate

Advance income tax : (AV X tax rate) (not to be considered for charge of any other duty and VAT)

Let’s Do It!

C & F Value 100

Insurance cost & Landing cost (1% of C&F and I value)

IDSC (4% of AV)

Custom duty (37.5%)

Supplementary duty (25% of duty paid value)

VAT able base VAT @ 15%

How to Calculation Customs Duty?

If want to find out Customs Duty  first of all will be gather knowledge of Bill of Entry of Bill of Export tag 46. Now here you looking that lot symbol as like CD, RD, SD, VAT, AV AIT this mark manner to calculate cost of assessment value. 

Solution: 01

• To calculate customs duty at first you need to know the proper HS CODE of your imported products.
• HS CODE means a unique code which is recognize worldwide to identify a product.
• Every country has their own customs tariff schedule which is undated & announced in yearly basis.
• So check always the latest customs tariff.
• So, here I have found that my HS code.
• Seem that we imported any goods from China Which FOB Vale $10,000.00 x 83.75 = 8,37,500.00 BDT. Which HS Code is 38089121.
• So find out actual HS Code tariff CD=25%, RD=3%, SD=20%, VAT=15%, AIT=5%, ATV=5%.
• Now I we try to find out how much cost will be paid for customs duty purpose. Seem That Fob Value Is: $10,000.00.
• Then find out assessment value which mentioned own your Bill of Entry 46 tag.

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How to find out assess able value?

Total Invoice Value x Exchange Rate

CNF Value = Cost & Freight Value / Cost , No Insurance , Freight Value

CNF Value x 1% Insurance Charge

CIF Value = Cost , Insurance & Freight Value

CIF Value x 1% Landing Charge 

CIFL Value / FOB Value x Adjustment = All assess able Value

Example for finding assassable value.

 $ 10,000 x 83.50

BDT 8,35,000 x 1% Insurance Charge =  BDT 8,350 + 8,35,000 = BDT 8,43,350

BDT 8,43,350 x 1% Landing Charge = 8,433.50 + 8,43,350= BDT 8,51,783.50

BDT 8,51,783.50 x 1 (Adjustment tag-45 of Bill of Entry) 

= BDT 8,51,783.50 Assess able Value

If you any questions or doubt please feel free informed me by comments.

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Now we try find out customs duty below theory basis.
CD = AV x CD Rate / 100
So, we say for example we have got our asses-able value is -

AV = 8,51,783.50 BDT

CD = 8,51,783.50 (AV) x 25% (CD Rate) = 2,12,945.87 BDT.

RD = AV x RD Rate / 100 (8,51,783.50 x 3%) = 25,553.50 BDT.

SD = AV+CD+RD xSD Rate / 100 (SD=

8,51,783.50+2,12,945.87+25,553.50= 10,90,282.87 x 20% = 2,18,056.57 BDT.

VAT = AV+CD+RD+SD x 15% (13,08,339.44 x 15%) = 1,96,250.91 BDT

AIT = AV x 5% (8,51,783.50 x 5%) = 42,589.17 BDT.

ATV = AV+CD+RD+SD x 33.34% (Gov: Additional Value) = 4,36,200.30 BDT + 13,08,339.44 BDT = 17,44,539.74 x 5% = 87,226.98 BDT

TTI = (AV+CD+RD+SD+VAT+AIT+ATV)  - AV = 16,34,406.50 - 8,50,783.50
= 7,82,623.00 BDT