Customs Duty synonymous to tariff and involves a tax on commodities entering and leaving the country. Customs duty is sometimes called an 'external excise tax', which includes an export duty or an import duty. The origin of customs duty dates back to the 'customary levies' of ancient times. As recorded in the Kautiliyam Arthasastram (circa 321-300 BC), the highest revenue officer of the time was called the Samaharta (collector-general) and his responsibility was to arrange revenue collection from seven types of places, of which the seventh was the vanikpaths (trade routes) of 2 kinds, land routes and sea-routes. The subcontinent witnessed the levy of chungi during the Mughal period (1526-1707). The country was then divided into subas or provinces and chungi was leviable on commodities moving from one province to the other. Customs levy were also imposed on goods imported from abroad by sea. Chungi ghar of those days were perhaps the precursor of today's customs house. In British India, Lord Cornwallis abolished customs duty in 1788 but it was reintroduced again in 1801. Collection of customs duty in 1839-40 was Rs 4,103,298 accounting for 5% of public revenue. In the early twentieth century, 'taxes on imports and exports' were the seventh major source of public revenue.
The present customs system came into being in the nineteenth century. The entire law and machinery for collection was consolidated in 1878, when the Sea Customs Act was enacted on the pattern of the British customs law, giving legal authority for the levy and collection of customs duty. The administration was initially vested in the provincial government until 1924, when it was brought under the central control with the establishment of the Central Board of Revenue (CBR) under CBR Act of 1924. The Land Customs Act was also promulgated in 1924 to enable the central government to enforce control on the movement of goods and passengers by land routes and frontiers from the subcontinent to adjoining territories and vice versa or in transit from one country to the other via the subcontinent. The Customs Act 1969 was enacted to consolidate and amend the law relating to the levy and collection of customs duties and provide for allied matters. As a result, under Section 220 of the Customs Act 1969, four acts (the Sea Customs Act 1878, the Inland Bonded Warehouses Act 1896, the Land Customs Act 1924, and the Tariff Act 1934) and Section 14 of the Civil Aviation Ordinance 1960 were repealed. This put an end to legal features, which had so long separated the sea customs, land customs, and air customs from one another.
After the emergence of Bangladesh, the government abolished CBR and created national board of revenue (NBR) as the apex tax authority with power to take over customs administration. The Customs Act was made effective in Bangladesh by President's Order no. 48 of 1972.
The primary function of the customs authority is the administration of revenue under the Customs Act 1969 and the Value Added Tax Act 1991. The customs authority is responsible mainly for assessment and collection of customs duties, value added tax, supplementary duty and other taxes and charges leviable on imported or exported goods. Its collateral function includes prevention of smuggling, implementation of the Imports and Exports (Control) Act 1950, and the enforcement of the Foreign Exchange Regulation Act 1947. In its auxiliary function, the customs authority also maintains the security measures under different statutes, namely the Arms Act 1878, the Explosives Act 1884, the Merchandise Marks Act 1889, the Livestock Importation Act 1898, the Narcotics Control Act 1990, etc.
Duties and taxes collected on international trade now comprise the largest share of tax revenue in Bangladesh. In 2005-06, over 75% taxes came from indirect taxes, about 70% of which was collected at customs-station. However, due to tariff reduction after the signing of the World Trade Organisation (WTO) Agreement, the share of customs duty in the tax structure has been falling in recent years. The direct tax was 71.4% and 69.9% of total tax in revised budget during 2008-09. The customs duty was supposed Tk 9,570 and Tk 10,430 for the period of 2008-09 and 2009-10 fiscal year respectively, among them 17.2% and 16.3% of whole taxes. [Swapan Kumar Bala and Helal Uddin Ahmed]