We know that rates of duty are mentioned in Customs Tariff Act.

However, Central Government has the power to grant exemption by passing notification in official gazette.

Such notification passed in official gazette granting exemption is called exemption notification.

 

Types of exemptions

General Exemption

If the Central Government is satisfied

that it is necessary in the public interest so to do,

it may, by notification in the Official Gazette,

exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance)

as may be specified in the notification,

goods of any specified description from the whole or any part of duty of customs leviable thereon

 

Special Exemption

If the Central Government is satisfied

that it is necessary in the public interest so to do,

it may, by special order in each case,

exempt from payment of duty, any goods on which duty is leviable only under circumstances of an exceptional nature to be stated in such order.

Further, no duty shall be collected if the amount of duty leviable is equal to, or less than, ` 100.

 

Difference between General Exemption and Special Exemption?

General Exemption

Special exemption

It is done by notification in official gazette

It is done by special order

It is done normally

It is done in exceptional circumstances

+

Such exceptional Circumstances to be stated in order

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Further, no duty shall be collected if the amount of duty leviable is equal to, or less than, ` 100.

 

 

Why are Exemptions Granted?

To control economy and promoting industrial growth of company

Sometimes exemption is granted on moral grounds like

  • When goods get damaged
  • Goods reach the Indian soil but not suitable for consumption 
  1. Indirect Tax
  2. Customs
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST and Tax E-filinf training in Delhi. Register now.