Q. Consider the following statements regarding customs duties:
1.Ad valorem duty is levied as a fixed percentage of the value of goods or services imported.
2.Specific duty is levied as a fixed amount per unit of goods, irrespective of their value.
3.Ad valorem duty is charged based on the weight or volume of goods.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A
Notes:

Explanation:

  • Statement 1 is correct — Ad valorem duty is calculated as a percentage of the value of goods or services.
  • Statement 2 is correct — Specific duty is charged as a fixed amount per unit (e.g., per kilogram, per litre), regardless of value.
  • Statement 3 is  Incorrect — Ad valorem duty is not based on weight or volume; that is characteristic of specific duty.

Source- TH

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