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TARGET IAS 2016 – BATCH

SAFEGUARDS DUTY, IMPORT DUTY, SECTION 8B OF THE CUSTOMS TARIFF ACT,

1975
Safeguard Duties
 These duties are levied on the commodities by domestic
governments/authorities to ensure that imports in excessive quantities
do not cause injury to the domestic industry.
 Safeguard duties are temporary measures in defense of the Domestic
Industry which is injured or has potential threat of injury due to sudden
surge in imports.
Why recently in news?
 The Centre recently imposed provisional safeguard duty of 20 per cent
on import of certain categories of steel with a view to protect domestic
producers from recent surge in inward shipment.
 The duty of 20% is applicable on import of hot-rolled flat products of
non-alloy and other alloy steel with a width of 600 mm or above.
 The safeguard duty on hot-rolled coils (HRC) would benefit the
integrated steel producers (ISPs) only in the short-term as it is it is
applicable for only 200 days
Comparing Safeguard duty with Import duty
 Import duty is a tax on goods imported into a country. Customs Duty is a
tax imposed on imports and exports of goods.
 The safeguard duty is superior to the import duty as it is applicable to all
nations unlike the import duty which excludes countries falling under
free trade agreements.
China, Japan and South Korea
 Steel imports have increased primarily from China, Korea and Japan.
  While the imposition of import duty of 12.5% applies to China, it does
not apply to Korea and Japan, with which India has bilateral free trade
pacts
Safeguard Provisions under the Customs Tariff Act, 1975 (Section 8B)
 Section 8B of the Customs Tariff Act, 1975 empowers the Central
Government to impose Safeguard Duly on goods which enter in
increased quantities and cause or threaten to cause serious injury to
domestic industry producing like or directly competitive goods.

SAMPLE PRELIMS 2016 QUESTIONS

Q1 – Consider the following statements
A] Safeguards duty is of temporary nature.
B] Safeguards duty cannot be applied against countries with which India signed
free trade agreements.
Which of the above statement[s] is/are correct?
1. A only
2. B only
3. Both A and B
4. Neither A nor B
Answer – 1 – A only
Statement A – correct
Statement B – wrong – safeguards duty is applicable to all countries including
countries with which India signed FTA.