Customs Act, 1962 Section 28c — Price of goods to indicate the amount of duty paid thereon
Customs Act, 1962 · Price of goods to indicate the amount of duty paid thereon
Plain-English Explanation
Overview
Section 28C of the Customs Act, 1962 mandates transparency in pricing by requiring businesses to explicitly disclose the customs duty component in the price of goods sold. This ensures consumers are aware of the duty paid and promotes fair trade practices. It applies notwithstanding anything in other laws.
Who Does This Apply To?
This section applies to every person liable to pay customs duty on any goods. This broadly encompasses importers and any entities responsible for the clearance of imported goods.
How It Works
The mechanism is straightforward:
- Duty Disclosure: At the time of clearing the goods from customs, the person liable to pay duty must prominently indicate the amount of customs duty paid.
- Document Inclusion: This duty amount must be clearly shown in all relevant documents, including:
- Assessment Documents: Documents used for customs assessment.
- Sales Invoices: Invoices issued to customers for the sale of the goods.
- Other Like Documents: Any other documents related to the sale or pricing of the goods.
- Price Component: The declared customs duty must form part of the overall price at which the goods are eventually sold. This avoids businesses absorbing the duty and selling below cost.
Important Conditions & Exceptions
- Condition 1: The disclosure requirement applies at the time of clearance of goods. This means the duty amount needs to be determined and declared accurately at the import stage.
- Condition 2: The disclosure must be prominent. While the law doesn't specify font size or placement, the duty amount should be easily visible and understandable on the documents.
- Exception: The section's application is notwithstanding any other law. This makes the mandate absolute, even if other laws prescribe conflicting disclosure requirements.
Practical Example
ABC Importers imports electronic components and pays INR 50,000 as customs duty. They sell these components to a manufacturer.
- When ABC Importers prepares the sales invoice for the manufacturer, they must prominently display the INR 50,000 customs duty amount.
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The invoice might read:
- Cost of Goods: INR 200,000
- Customs Duty: INR 50,000
- Total Price: INR 250,000
- This ensures the manufacturer is aware that INR 50,000 of the total price represents the customs duty paid by ABC Importers.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
What is the primary purpose of Section 28C of the Customs Act, 1962?
Section 28C mandates transparency by requiring individuals liable to pay customs duty to clearly indicate the amount of duty paid as a component of the selling price on all relevant documents, including assessment documents, sales invoices, and similar documents. This aims to inform consumers about the duty element in the price of imported goods and ensure fair trade practices.
To whom does Section 28C of the Customs Act, 1962 apply?
Section 28C applies to every person who is liable to pay duty on any goods under the Customs Act, 1962. This encompasses importers, exporters, and any other individuals or entities responsible for paying customs duties on goods being cleared through customs.
What documents are required to prominently display the amount of customs duty paid under Section 28C?
The amount of customs duty paid must be prominently indicated on all documents relating to assessment, sales invoices, and other similar documents used during the clearance process. This ensures a consistent and clear communication of the duty component across all transaction records.
What are the potential consequences of failing to comply with Section 28C of the Customs Act, 1962?
While Section 28C doesn't explicitly state penalties for non-compliance, failure to adhere could be construed as an attempt to mislead consumers or customs authorities, potentially leading to scrutiny and further investigation under other provisions of the Customs Act, 1962. This may result in penalties related to misdeclaration or concealment of facts, as outlined in other sections of the Act.
Does Section 28C require a specific format for indicating the amount of duty paid?
Section 28C requires the amount of duty to be indicated "prominently," but does not prescribe a specific format. The key is to ensure the information is easily visible and understandable to both customs officials and consumers, avoiding any ambiguity or concealment. Best practice is to clearly state the amount of duty paid and potentially its percentage of the total price.
Is Section 28C applicable to goods cleared under all schemes and procedures of customs clearance?
Yes, Section 28C applies to all goods cleared under any scheme or procedure where customs duty is applicable. Regardless of whether the clearance is done through normal assessment, self-assessment, or any other facilitated clearance program, the requirement to prominently indicate the duty paid on relevant documents remains in effect.
How does Section 28C impact the pricing strategy of businesses importing goods?
Section 28C necessitates transparency in pricing, influencing how businesses structure their pricing strategy for imported goods. Businesses must accurately factor in the customs duty paid as a component of the overall cost and clearly disclose this to consumers, allowing them to make informed purchasing decisions. This encourages competitive pricing and discourages inflated costs due to hidden duty components.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Applicability: Duty Payers | This section applies to every person liable to pay duty on goods. |
| Timing: At Clearance | The indication of duty paid must occur at the time of clearance of the goods. |
| Manner: Prominent Indication | The duty amount must be prominently indicated in all relevant documents. |
| Documents: Assessment, Sales, etc. | Relevant documents include assessment documents, sales invoices, and similar documents. |
| Duty's Role: Part of Price | The indicated duty amount will form part of the final selling price of the goods. |
| Override: Other Laws | This section overrides anything inconsistent in the Customs Act or other existing laws. |
Amendment History
No amendment records available for this provision.
Customs Act, 1962 Section 28c — Price of goods to indicate the amount of duty paid thereon