What are the four types of duties?

What are the four types of duties?

• A. Valuemetric, threshold, regulatory, exemption
• B. Ad valorem, specific, compound, free
• C. Fixed, fluctuating, conditional, contingent
• D. Basic, additional, special, customs

Answer: (B)

The four types of duties are indeed classified as ad valorem, specific, compound, and free. Ad valorem duties are calculated as a percentage of the value of the goods being imported. This means that as the value of the goods increases, so does the amount of duty owed. This type of duty is common in international trade because it adjusts based on market conditions. Specific duties are fixed amounts charged per unit of the commodity, regardless of its value. For example, a certain amount of duty may be applied per kilogram of a product. Compound duties combine both ad valorem and specific duties, applying a specific tax in addition to a percentage of the value. This can lead to a more complex calculation of the total duty owed based on both the quantity and value of the goods. Free refers to goods that are exempt from duty, meaning they do not incur any additional tax charges during importation. While it is important to recognize different classifications of customs duties, free does not denote a specific type of duty in the same manner as the other three. Thus, choice B accurately represents the categories of duties in customs, providing a comprehensive understanding of how different types of duties are applied in trade scenarios.

The four types of duties are indeed classified as ad valorem, specific, compound, and free.

Ad valorem duties are calculated as a percentage of the value of the goods being imported. This means that as the value of the goods increases, so does the amount of duty owed. This type of duty is common in international trade because it adjusts based on market conditions.

Specific duties are fixed amounts charged per unit of the commodity, regardless of its value. For example, a certain amount of duty may be applied per kilogram of a product.

Compound duties combine both ad valorem and specific duties, applying a specific tax in addition to a percentage of the value. This can lead to a more complex calculation of the total duty owed based on both the quantity and value of the goods.

Free refers to goods that are exempt from duty, meaning they do not incur any additional tax charges during importation. While it is important to recognize different classifications of customs duties, free does not denote a specific type of duty in the same manner as the other three.

Thus, choice B accurately represents the categories of duties in customs, providing a comprehensive understanding of how different types of duties are applied in trade scenarios.