Basic Customs Duty (BCD) is an indirect tax imposed by the Indian government on goods imported into the country. It is calculated as a percentage of the assessable value of the goods, which includes the cost of the goods, freight charges, and insurance. BCD is a crucial component of the customs duty framework in India and is governed by the Customs Tariff Act of 1975.

Key Features of Basic Customs Duty:

1. Ad-Valorem Tax: BCD is typically levied on an ad-valorem basis, meaning it is calculated as a percentage of the total value of the imported goods. This ensures that the duty reflects the market value of the items being imported.

2. Variable Rates: The rate of BCD varies depending on the type of goods and their country of origin. For instance, essential items like lifesaving drugs may be exempt from this duty to facilitate access to necessary healthcare products.

3. Purpose: The primary objectives of BCD are to regulate imports, protect domestic industries from foreign competition, and generate revenue for the government. By imposing duties on imports, the government aims to encourage local manufacturing and reduce dependency on foreign goods.

4. Additional Duties: In addition to BCD, other duties such as Countervailing Duty (CVD) and Integrated Goods and Services Tax (IGST) may apply to imported goods, further impacting their final cost.

The recent increase in BCD on certain items, such as Interactive Flat Panel Displays from 10% to 20%, illustrates the government's strategy to promote local manufacturing while adjusting import duties to safeguard domestic industries.