Fiscal Policy & Revenue (Part – V)

Customs duty is an indirect tax that is levied on all imported goods as well as a few commodities that are exported out of the country. Export duties are known as export duties, whereas import duties are known as import duties. Customs duties on commodity imports and exports are levied by countries all over the world to raise revenue and/or safeguard domestic institutions against predatory or efficient international competition.
The Customs Act of 1962 defines customs duty in India, allowing the government to charge duties on exports and imports, restrict the export and import of products, establish processes for importing and exporting goods, and impose penalties, among other things.
The Central Board of Excise and Customs is in charge of all customs affairs (CBEC). The CBEC, in turn, is a section of the Ministry of Finance's Department of Revenue. CBEC develops policies linked to customs duty collection and levying, customs duty evasion, smuggling prevention, and administrative judgments involving customs formations.
Customs tax is calculated based on the value of the items, as well as their size, weight, and other characteristics. Ad valorem duties are those that are based on the worth of commodities, whereas specified duties are those that are based on amount or weight.

Excise duty is a type of tax levied on products for their manufacture, distribution, and sale. Excise duty is an indirect tax paid to the Indian government by manufacturers of commodities. It is the polar opposite of Customs duty in that it applies to items created domestically in India, whereas Customs applies to goods imported from outside the nation.
Previously, the excise tax was imposed at the federal level as Central Excise Duty, Additional Excise Duty, and so forth. However, the Goods and Services Tax (GST), which went into effect in July 2017, absorbed a wide range of excise taxes. Excise tax is currently exclusively applied to gasoline and alcoholic beverages.

Note: On 15 September, 2021 then Minister of Communications Ashwini Vaishnaw had announced a relief package for the telecom companies by giving them four-year moratorium on AGR dues and with other incentives/ concessions, he also revealed that the non-telecom revenue will be excluded from the definition of AGR.

The Voluntary Disclosure of Income Scheme (VDIS) was a very unconventional but successful step among Indian economic policies. It would give an opportunity to the income tax or wealth tax defaulters to disclose their undisclosed income at the prevailing tax rates. This scheme would also ensure that the laws relating to economic offences would not be applicable for those defaulters. Over 350,000 people disclosed their income and assets under this scheme, which brought a revenue of ₹78 billion (US$920 million) to the Indian finance ministry. The Union Finance Minister P. Chidambaram hoped, "It is my faith that given a chance, the people of India (would) come clean of the black money."

There are several instances where people do not declare their income accurately or under-report their income in order to avoid income-tax. With a view to have these people report their incomes and pay taxes, the income tax department conducts raids and scrutinies if a person's accounts are found suspicious. As an alternative, the government has also brought-in the Income Declaration Scheme, 2016 to provide an opportunity to those who haven't declared their income properly. The scheme allows a citizen to disclose the undeclared income and pay the applicable taxes.

(a) the distribution of the net proceeds of taxes to be shared between the Union and the States, and the allocation between the States of the respective shares of such proceeds;

(b) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;

(c) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendation made by the Finance Commission of the State;

(d) any other matter referred to the commission by the President in the interests of sound finance.

(a) the distribution of the net proceeds of taxes to be shared between the Union and the States, and the allocation between the States of the respective shares of such proceeds;

(b) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;

(c) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendation made by the Finance Commission of the State;

(d) any other matter referred to the commission by the President in the interests of sound finance.