Information Technology as Driving Force for Innovation
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Should Prices Always Rise?
The modern economy is obsessed with rising prices. An era of falling prices is called deflation. It is almost always considered to be bad news from an economic point of view. The commonly held viewpoint is that falling prices create negative sentiments and ultimately to a recession. Falling prices have been given the name “deflation”. […]
Characteristics of Six Sigma
Six Sigma is a well-known management breakthrough. There is a dearth of experts who have defined the process in their own way and have come up with a long list of characteristics. However, according to us this performs a task of confusing people rather than actually giving them insight into the way Six Sigma actually […]
Historic Greek Debt Relief Deal and the Lessons for Other Nations from this Crisis
Historic Debt Deal The Greek Debt Crisis is over, so proclaimed Finance Ministers from the Eurozone Countries who gathered in Brussels, on June 21st in talks that went into the early hours of the day. By saying so, they paved the way for Greece to emerge from a nearly decade long bailout process wherein it […]
Nigeria: A Strange Mix of Poverty and Oil Wealth
Countries which have large reserves of oil are usually considered to be rich. Barring a few exceptions like Venezuela, Iran, and Nigeria, most oil-producers in the world have a thriving economy. Socialism caused the economic collapse in Venezuela whereas Iran has been plagued by radical Islam. Nigeria does not seem to have any obvious problems. […]
The International Trade is rapidly changing and evolving as a result of Globalization and advancement of electronic and communication science. These have brought the entire world under global economy. Benefits of global economy ensure that despite different states of economic development in various countries, technology and products become accessible across countries. It enables all countries to specialize in particular trade and participate and benefit from global markets, thereby they are able to benefit from utilizing their resources, labor or whatever advantages of production they are endowed with.
Globalization has also given rise to the Multi National Companies that operate globally and are able to leverage on setting up production wherever it is cheaper and market their goods in countries where markets exist.
When countries have domestic markets and domestic industries, they cannot be left open to compete in global market without regulatory controls. Domestic industries need to be protected and supported to face up to competition and markets need to be regulated to ensure no dumping takes place. Moreover countries need to watch over depletion of their natural resources too and control the pricing and financial aspects of international trade related to their country.
All countries exercise controls over international trade through Trade Laws, Tariffs and Taxes which are called Import Duty and Export Duty. These are aimed at making trade practices safer, fair and ethical too. Tariffs are influenced by political as well as economic and financial outlook of the Governments as well as the bilateral relationship of the country with the other partnering country.
In a bid to made global markets accessible to all freely, the WTO has been trying to negotiate with all member countries. Uruguay Round did manage to bring about commitments from countries to cut down tariffs and bring them to base levels which remain standard across member countries, while the recent DOHA round of discussions have been centered around agriculture market access and resultant tariffs.
All countries maintain and publish schedule of tariffs annually and these are filed with WTO and generally in line with the international community tariffs. The rate of duty under the published tariff is called Bound Rates or basic customs duty.
Applied Rates are the effective rate of duties charged by the Customs at the specific period or time of import. The affective rate can vary from the Schedule. Generally the trend is to keep the applied rates same as schedule or at lower than schedule tariff. Countries do not generally tend to charge more than the schedule.
Normally the customs duty is set as a set percentage against the value of the consignment. This percentage value ensures that with the fluctuation of prices in the international market, the duty component gets automatically adjusted.
However besides basic customs duty, additional duty in terms of fixed value per ton or per unit quantity as specific or special duty are also applied for various purposes, to control and balance the import or export, or at times to augment revenue collection and various other purposes related to international as well as national situations.
Governments also levy special and temporary duties as percentage over the portion of customer duty on specific purpose and for specified time. It can also be applicable only on specific categories.
The tariffs can be based on revenue generation, prohibitive or protective outlook of the regulatory policy and authorities. It can also be on retaliatory mode as well as based on bi lateral or specific trade pact with other countries.
All duties incase of both imports as well as exports are valued and collected by Customs Authorities through their branches set up at every port of entry in the Country.
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