Goods Exempted from Customs Duty May be Subject to Levy of Additional Duty: Madras HC

The Madras High Court has stated that goods exempted from customs duty may still be subject to the levy of additional duty. This observation clarifies that a customs duty exemption does not automatically imply exemption from other duties that might be applicable at the time of import. The court highlighted that the levy of additional duty, such as the Special Additional Duty of Customs (SAD), is based on different legislative provisions and serves a different purpose, often to equalize the incidence of tax between imported goods and domestically manufactured goods. Therefore, importers need to be aware that even if their goods are exempt from basic customs duty, they might still be liable to pay other applicable duties at the point of entry into India.