Tariffs and Non-Tariff Barrier2

8/7/2019 Tariffs and Non-Tariff Barrier2

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Tariffs and NonTariffs and Non--Tariff BarrierTariff Barrier

SubmittedSubmitted toto:: Submitted Submitted byby::

DrDr.. RajRaj KumarKumar GautamGautam Mandeep Mandeep sharmasharma

RollNoRollNo--114114


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TariffTariff

AA tarifftariff isis aa taxtax oror dutyduty imposedimposed byby oneone nationnation onon thethe

importedimported goodsgoods oror servicesservices ofof anotheranother nationnation..

TariffsTariffs areare usuallyusually associated associated withwith protectionism,protectionism, aa

government'sgovernment's policypolicy of of controllingcontrolling tradetrade betweenbetween

nationsnations toto supportsupport thethe interestsinterests ofof itsits ownown citizenscitizens..


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Necessity of TariffNecessity of Tariff

To protect newly established domestic industries fromTo protect newly established domestic industries from

foreign competition.foreign competition.

To protect Old and inefficient domestic industriesTo protect Old and inefficient domestic industriesfrom foreign competition.from foreign competition.

To protect domestic producers from "dumping" byTo protect domestic producers from "dumping" by

foreign companies or governments.foreign companies or governments. To raise revenue.To raise revenue.

Equal distribution of the wealthEqual distribution of the wealth


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Types of TariffsTypes of Tariffs

Tariff may be:Tariff may be:

Revenue TariffsRevenue Tariffs Ad valorem TariffsAd valorem Tariffs

Specific TariffsSpecific Tariffs

Prohibitive TariffsProhibitive Tariffs Protective TariffsProtective Tariffs


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Tariff barrierTariff barrier

Excise tariff.Excise tariff.

Customs tariff.Customs tariff.

Harmonized system tariff.Harmonized system tariff.Energy tariff.Energy tariff.


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Excise TariffExcise Tariff

A tax on commercial goods produced or sold within a country isA tax on commercial goods produced or sold within a country is

called an excisecalled an excise tariff. The excise tariff is considered an indirecttariff. The excise tariff is considered an indirect

form of taxation because the government does not directly applyform of taxation because the government does not directly apply

the tax to the end consumerthe tax to the end consumer e.g. Tax on tobacco, alcohol.e.g. Tax on tobacco, alcohol.

Advantage of Excise Tariff:Advantage of Excise Tariff:

RevenueRevenue Public servicePublic service


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Customs tariffCustoms tariff

AA customscustoms tarifftariff isis aa taxtax assessedassessed byby aa governmentgovernment onon goodsgoods

thatthat areare movedmoved acrossacross anan internationalinternational borderborder crossingcrossing oror portport..

ItIt isis oneone ofof thethe typetype ofof specificspecific andand AdAd valoremvalorem TariffsTariffs

CountriesCountries maymay imposeimpose customscustoms tariff tariff ss toto preventprevent domesticdomestic

goodgood fromfrom thethe foreignforeign competitioncompetition

CustomsCustoms tarifftariff maymay bebe classifiedclassified asas::1.1. ExportExport tarifftariff

2.2. ImportImport tarifftariff


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Export TariffExport Tariff

Export tariff are the tax which is imposed on the good when theExport tariff are the tax which is imposed on the good when the

leaved the countryleaved the country

Export tariff mainly used by the government when the countryExport tariff mainly used by the government when the country

faced widespread inflation. China placed the export tariff onfaced widespread inflation. China placed the export tariff on

the grain productthe grain product

Export tariff generally increase the cost of the business for theExport tariff generally increase the cost of the business for the

domestic companydomestic company


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Sr.noSr.no Description of articleDescription of article Rate of dutyRate of duty

1.1. CoffeeCoffee Rs. 2200 per quintalRs. 2200 per quintal

2.2. Black pepperBlack pepper Rs. 5 per kgRs. 5 per kg

3.3. Raw woolRaw wool 25%25%

4.4. Raw cottonRaw cotton Rs. 2500 per tonneRs. 2500 per tonne

5.5. Cotton waste, all sortsCotton waste, all sorts 40%40%

6.6. TeaTea Rs. 5 per kilogramRs. 5 per kilogram

7.7. Mica, including fabricated micaMica, including fabricated mica 40%40%

8.8. Manganese oreManganese ore Rs. 20 per tonneRs. 20 per tonne

9.9. Manganese DioxideManganese Dioxide 20%20%

10.10. Iron ore, all sortsIron ore, all sorts 10% plus Rs. 50 per10% plus Rs. 50 pertonnetonne

11.11. Granite (including black granite),Granite (including black granite),porphyry and basalt, all sortsporphyry and basalt, all sorts

15%15%


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Import tariffImport tariff

An importAn import tarifftariff is a tax placed by governments on commoditiesis a tax placed by governments on commodities

that are shipped into a country from a foreign countrythat are shipped into a country from a foreign country

ImportImport tariffstariffs areare oftenoften aa wayway toto discouragediscourage aa country'scountry's

consumersconsumers fromfrom buyingbuying productsproducts fromfrom anotheranother countrycountry andand totosupportsupport domesticdomestic productsproducts andand servicesservices

AnAn importimport tarifftariff cancan havehave aa negativenegative oror positivepositive effecteffect onon thethe

countrycountry imposingimposing thethe tarifftariff


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CategoryCategory CommodityCommodity

MetalsMetals Copper,Copper, Aluminum,Aluminum, ZincZinc ,, Lead,Lead, TinTin etcetc

Iron & SteelIron & SteelProductsProducts

IronIron andand NonNon IronIron alloyalloy steel,steel, StainlessStainless steelsteel etcetc..

ChemicalsChemicals BothBoth OrganicOrganic andand inorganicinorganic chemicalschemicals

OilsOils CrudeCrude oils,oils, PetroleumPetroleum oilsoils etcetc..

Cash CropsCash Crops Coffee,Coffee, Tea,Tea, RubberRubber etcetc..

Machine toolsMachine tools RollerRoller bearings,bearings, motormotor parts,parts, electricalelectrical machinery,machinery,cinematographiccinematographic measuringmeasuring instruments,instruments, opticalopticalinstruments,instruments, surgicalsurgical instruments,instruments, manman mademade filamentsfilamentsetcetc..


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Harmonized system TariffsHarmonized system Tariffs

A harmonized systemA harmonized system tarifftariff refers to a tariff that is categorizedrefers to a tariff that is categorizedby the Harmonizedby the Harmonized CommodityCommodity Description and CodingDescription and CodingSystems, also called the Harmonized System (HS).Systems, also called the Harmonized System (HS).

TheThe HSHS hashas categoriescategories forfor overover 55,,000000 commoditiescommodities andand isis usedused bybyapproximatelyapproximately 200200 countriescountries around around thethe world world inintheirtheir harmonizedharmonized tarifftariff schedulesschedules..

TheThe HSHS isis updatedupdated everyevery fivefive oror sixsix yearsyears inin orderorder toto keepkeep upupwithwith changeschanges inin technologytechnology andand commercecommerce


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TheThe HSHS worksworks byby classifyingclassifying all all commoditiescommodities thatthat crosscross anan

internationalinternational boundaryboundary..

EachEach commoditycommodity classified classified inin thethe harmonized harmonized systemsystem tariff tariff

codecode isis givengiven aa uniqueunique sixsix digitdigit classificationclassification numbernumber..

TheThe firstfirst fourfour numbersnumbers areare calledcalled thethe heading,heading, andand thethe nextnext twotwo

digitsdigits areare thethe subheadingsubheading..

TheThe HSHS cancan bebe aa usefuluseful tooltool inin trackingtracking trendstrends inin internationalinternationaltradetrade andand customscustoms tariffstariffs


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Energy TariffsEnergy Tariffs

AnAn energyenergy tarifftariff isis aa typetype ofof taxtax thatthat isis assessedassessed onon anan energyenergyproductproduct

InIn orderorder toto promotepromote sustainablesustainable energyenergy policies,policies, somesome countriescountriesofferoffer individualsindividuals and and entitiesentities energyenergy tariff tariff creditscredits forfor usingusingrenewablerenewable energyenergy resourcesresources..

countriescountries attemptattempt toto reducereduce thethe useuse of of nonnon--renewablerenewable energyenergysourcessources byby levyinglevying energyenergy tariffstariffs onon nonnon--renewablerenewable energyenergyproducts,products, suchsuch asas petroleumpetroleum oror naturalnatural gasgas


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Non TariffsNon Tariffs

NonNon--tarifftariff barriersbarriers toto tradetrade (NTBs)(NTBs) areare tradetrade barriersbarriers thatthat

restrictrestrict importsimports butbut areare notnot inin thethe usualusual formform ofof aa tarifftariff

NonNon--tarifftariff barriersbarriers toto tradetrade includeinclude importimport quotas,quotas, special special

licenses,licenses, unreasonableunreasonable standardsstandards forfor thethe qualityquality of of goods,goods,

bureaucraticbureaucratic delaysdelays atat customs,customs, exportexport restrictions,restrictions, limitinglimiting thethe

activitiesactivities of of statestate trading,trading, exportexport subsidies,subsidies, countervailingcountervailing

duties,duties, technical technical barriersbarriers toto trade,trade, sanitarysanitary andand phytophyto--sanitarysanitary

measures,measures, rulesrules ofof origin,origin, etcetc..


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Non Tariff barrierNon Tariff barrier

Intellectual Property RightsIntellectual Property Rights

EmbargoEmbargo

Voluntary Export RestraintsVoluntary Export Restraints

AntiAnti--dumping dutiesdumping duties

SubsidiesSubsidies

Countervailing dutiesCountervailing duties

NonNon--Automatic authorizationsAutomatic authorizationsQuotasQuotas


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Intellectual Property RightsIntellectual Property Rights

IntellectualIntellectual propertyproperty rightright maymay bebe defined defined asas thethe informationinformationwithwith commercialcommercial valuevalue

IPRsIPRs maymay bebe defineddefined asas thethe compositioncomposition ofof ideas,ideas, inventioninvention andand

creativecreative expressionexpression plusplus thethe publicpublic willingnesswillingness toto bestowbestow thethestatusstatus ofof propertyproperty and and givegive theirtheir ownerowner thethe rightright toto excludeexcludeotherother fromfrom thethe accessaccess toto oror useuse thethe protectedprotected subjectsubject mattermatter..

UnderUnder intellectual intellectual propertyproperty law,law, ownersowners areare granted grantedcertaincertain exclusiveexclusive rightsrights toto aa varietyvariety ofof intangibleintangible assets,assets, suchsuch asasmusical,musical, literary,literary, andand artisticartistic worksworks;; discoveriesdiscoveries andand inventionsinventions;;andand words,words, phrases,phrases, symbols,symbols, andand designsdesigns..


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EmbargoEmbargo

AnAn embargoembargo isis thethe partialpartial oror completecomplete prohibitionprohibition ofof commercecommerce

andand tradetrade withwith aa particularparticular country,country, inin orderorder toto isolateisolate itit..

ItIt maymay eveneven meanmean thatthat citizenscitizens fromfrom thethe imposingimposing countrycountry areare

bannedbanned fromfrom visitingvisiting thethe prohibited prohibited countrycountry.. Essentially,Essentially,

aa tradetrade embargoembargo isis aa strategystrategy toto makemake anotheranother countrycountry eithereither dodo

somethingsomething oror refrainrefrain fromfrom doingdoing somethingsomething..


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oneone of of thethe mostmost famousfamous tradetrade embargoesembargoes inin recentrecent timestimes isisthethe tradetrade embargoembargo thethe United United StatesStates holdsholds withwith CubaCuba..

TheThe embargoembargo waswas established established inin the the hopehope thatthat

prohibitingprohibiting tradetrade withwith CubaCuba would would weakenweaken thethe countryscountrys

economyeconomy toto thethe pointpoint wherewhere CubaCuba wouldwould overthrowoverthrow FidelFidel CastroCastro(Cuban(Cuban political political leaderleader and and formerformer communistcommunist revolutionaryrevolutionary

)and)and implementimplement aa democraticdemocratic governmentgovernment.. InIn fact,fact, thethe lawlaw

prohibitingprohibiting tradetrade withwith CubaCuba waswas renamed renamed thethe CubanCuban

DemocracyDemocracy ActAct inin 19921992,, thoughthough thethe initial initial embargoembargo beganbegan inin

19621962..


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IndiasIndias DepartmentDepartment ofof TelecomTelecom (DoT)(DoT) issuedissued anan orderorder toto IndianIndian

telecomtelecom operatorsoperators toto banban thethe importimport ofof telecomtelecom equipmentequipment fromfrom

ChinaChina.. TheThe DoTDoT banban followsfollows concernsconcerns raisedraised byby IndiasIndias HomeHome

MinistryMinistry thatthat telecomtelecom equipmentequipment fromfrom somesome countriescountries could couldhavehave spywarespyware oror malwaremalware thatthat givesgives intelligenceintelligence agenciesagencies acrossacross

thethe borderborder accessaccess toto telecomtelecom networksnetworks inin IndiaIndia.. Further,Further, fearsfears ofof

cheapercheaper ChineseChinese equipmentequipment beingbeing dumped dumped intointo IndiaIndia alsoalso

contributedcontributed toto thethe recentrecent banban


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Voluntary export restraintVoluntary export restraint

A voluntary export restraint is a decision by one nationA voluntary export restraint is a decision by one nationto reduce the export of a product to another nation.to reduce the export of a product to another nation.Common in textiles, clothing, steel, agriculture, andCommon in textiles, clothing, steel, agriculture, and

automobilesautomobilesA VER is called voluntary because the exportingA VER is called voluntary because the exporting

country sets the limits however it is generally imposedcountry sets the limits however it is generally imposedunder the threat of stiffer quotas and tariffs being setunder the threat of stiffer quotas and tariffs being setby the importing country if a VER is not establishedby the importing country if a VER is not established


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Tariffs and Non-Tariff Barrier2