The Customs Tariff Act, 1975

summary of the Customs Tariff Act, 1975
Objective
The Customs Tariff Act, 1975 was enacted to consolidate and amend the law relating to customs duties. It provides the legal framework for levying customs duties on imported and exported goods, classifying goods under tariff schedules, and imposing additional, anti-dumping, countervailing, safeguard, and protective duties to protect domestic industry and regulate international trade.
Key Provisions
• Tariff Schedules: Prescribes the rates of import and export duties through the First Schedule (import tariff) and Second Schedule (export tariff).
• Additional Customs Duty: Provides for the levy of additional duty on imported goods equivalent to the excise duty or other applicable domestic taxes on similar goods produced in India.
• Preferential Tariff: Enables the application of preferential or lower rates of customs duty under trade agreements entered into by India.
• Protective and Emergency Duties: Empowers the Central Government to impose protective duties, increase import or export duties in emergencies, and modify tariff rates in the public interest.
• Anti-Dumping and Countervailing Duties: Authorises the levy of anti-dumping duties on dumped imports and countervailing duties on subsidised imported goods to protect domestic industries from unfair trade practices.
• Safeguard Measures: Provides for the imposition of safeguard duties where a surge in imports causes or threatens serious injury to domestic producers.
• Rule-making Power: Empowers the Central Government to amend tariff schedules in specified circumstances and make rules for implementing the provisions of the Act.

Legislative History:

The Customs Tariff Act, 1975

● Act Title - The Customs Tariff Act, 1975

● Act Number / Year - 51 of 1975

● Act ID (India Code) - 197551

● Presidential Assent Date - August 18, 1975

● Enforcement Date - August 2, 1976

● Nodal Ministry - Ministry of Finance

Precedent & Historical Rationale

● Modernization of Tariff Classification Systems - Enacted to consolidate and reform the law relating to customs duties, replacing the outdated Indian Tariff Act, 1934.

● Alignment with International Trade Standards - Formulated to replace old, ambiguous tariff structures with a systematic commodity classification system based on the Brussels Tariff Nomenclature (BTN), which was later updated to align with the internationally recognized Harmonized Commodity Description and Coding System (HSN). This provided a standardized 8-digit tariff code structure for import and export items to minimize litigation and ease international trade.

● Statutory Machinery for Trade Remedies & Duties - Serves as the charging schedule companion to the procedural Customs Act, 1962. It establishes mechanisms for imposing Basic Customs Duty (BCD), Countervailing Duties (CVD) to neutralize local taxes/excise, Integrated Goods and Services Tax (IGST) components post-GST reform, Anti-Dumping Duties, and Safeguard Duties against predatory import practices.

Parliamentary Trajectory & Enactment

● Formulation - Introduced by the Ministry of Finance to establish a scientific, standardized framework for assessing import and export rates, promoting domestic manufacturing, and preventing trade distortion.

● Parliamentary Passage - Debated and passed by both Houses of Parliament (Fifth Lok Sabha and Rajya Sabha) during the monsoon session in July–August 1975.

● Presidential Assent - Received Presidential Assent on August 18, 1975.

● Enforcement - Enforced on August 2, 1976.

Source - Official Record of Parliament, India Code, and Ministry of Finance.