Join 60,000+ competitive exam aspirants
or with email
Your Cart
SubtotalтВ╣0
TotalтВ╣0
Examoogle тАв User тАв info@examoogle.com тАв EE-2024-8821
Chapter 1 of 12 тАв Page 1 of 248ЁЯФТ Protected PDF тАв Watermarked
Join 60,000+ competitive exam aspirants
What is the purpose of 'customs duty' in international trade?
To encourage unlimited imports
To protect domestic industries by taxing imports
To standardise products internationally
To regulate the export of goods
To protect domestic industries by taxing imports
Customs duty is a tax imposed on goods when they are transported across international borders, primarily serving as a tool for trade protectionism. By increasing the cost of imported goods, it makes domestic products more competitive and helps safeguard local manufacturing sectors from being overwhelmed by cheaper foreign alternatives.
Customs duty is a tax imposed on goods when they are transported across international borders, primarily serving as a tool for trade protectionism. By increasing the cost of imported goods, it makes domestic products more competitive and helps safeguard local manufacturing sectors from being overwhelmed by cheaper foreign alternatives.
Under the Constitution of India, the power to levy customs duties falls under the Union List (Entry 83) of the Seventh Schedule.
Customs duty is a form of indirect tax collected by the Central Government.
It helps manage the balance of payments by regulating the volume of imports into the country.
The Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance administers these duties.
Protectionism through customs duty aims to nurture 'infant industries' within a developing economy.
Customs duties include Basic Customs Duty (BCD), Integrated Goods and Services Tax (IGST), and Social Welfare Surcharge.
Option A is incorrect because unlimited imports without regulation would lead to a trade deficit and harm local businesses. Option C is incorrect because standardisation is handled by international bodies like the ISO, not trade taxes. Option D is incorrect because export duties are used to retain essential goods domestically, not to regulate trade in the way import customs duty does.
Anti-dumping duties are a specific type of customs measure used when foreign countries export goods at prices lower than their domestic market value.
B is correct тАФ Customs duty is primarily levied to protect domestic industries by making imported goods costlier and less competitive compared to locally produced items.
Connect this to the 'Balance of Payments' topic in Economics; high customs duties are often used by the government when the Current Account Deficit (CAD) widens.
Get instant step-by-step AI explanations, full shift Previous Year Papers (SSC GD, RRB, SSC JE), and regional rank analysis on the official Examoogle App.
Free Download тАв 100K+ Aspirants