Duty

Definition

A duty is fundamentally an indirect tax imposed by a governing authority on the value of an imported or exported product. This tax is a core component of the total landed cost of international shipments.

• Import Duty: Assessed specifically on the value of products entering a country.

• Export Duty: Assessed on the value of products leaving a country.

Duties are broadly categorized into Customs Duties (applied to imported goods) and Excise Taxes (applied to goods manufactured and sold domestically). The calculation of duties is based on criteria such as the good's value, weight, dimensions, product classification, and country of origin.

Types of Duty

Shippers must be aware of several specific classifications of duties that may be applied based on trade policy or governmental necessity:

• Basic Duty: The standard rate applied to a product based on its classification.

• Countervailing Duties (CVD): Imposed to neutralize the unfair competitive advantage derived by exporters who receive government subsidies in their home country.

• Anti-dumping duty (ADD): A protective tariff imposed when a foreign country sells goods in the importing country at a price lower than their domestic price, which harms the local industry.

Key Distinction

It is critical to separate duties from other fees, charges, or penalties assessed against cargo. A duty is a standard tax on the product itself. Separate charges cover government services or regulatory violations. Examples of these distinct fees include:

• Entry processing fees for customs clearance.

• Reimbursable government service charges.

• Fines, penalties, or liquidated damages resulting from documentation errors or violations of customs regulations.