COLLECTION RATE

Collection rate is the ratio of total customs revenue and the total value of imports for a year. This is an indicator of overall incidence of customs including countervailing duties (CVD) and special additional duties (SAD) on imports. Several exemptions are offered by the GoI in customs duty on a variety of imports. This is the reason why India’s customs collection does not increase as much as much its imports increase.

India’s collection rates have been lower between 2009–2013 due to various exemptions announced by the GoI on the imports of petroleum, oil and lubricants (POL) and other commodities. These exemptions in the base custom duties were announced to check the rising commodities prices in the world market together with a general inflationary trend seen in India due to food inflation. At present the collection rate for India stands at 6.1 per cent23.