A tax that is set on products that are imported from another country, or exported to another country is known as tariff. The purpose of a tariff is to secure domestic jobs and productions and also to protect certain industries within a country. Governments set, raise, or lower tariffs in order to restrict or the amount of goods being exported or imported. Tariffs can be fixed or variable according to the price and the type of product being exported or imported.
There are two kinds of tariff
The export tariff and the import tariff are often different values. For instance, the import tariff on steel might be 6%, but the export tariff might be 3%. The import tariff is usually higher to protect domestic businesses.
Difference between tariff and a duty: These terms are often used interchangeably, but they have different meanings. Though both of them are set by the governments.
Who pays for tariff: Tariffs are paid by the buyers who are the importing party. It is not necessary for the buyer to be customer; it can also be a business which later sells the product to end user and charge an extra amount for covering the tariff charges. This essentially passes the tariff along to the customer. This may not necessarily be the case as this factor is dependent upon several variables like the country laws, country of origin, terms of tariff and identity of goods.
How to pay a tariff: Tariffs must be paid before receiving the goods and to the customs authority when entering a country. Goods would go through customs checks and then officials will decide if there is a payable tariff on the goods are bought from another country and that would determine if tariff had to be passed onto the delivery company. As a result, the delivery company informs the buyer for completing the payment process by online method. On acknowledging the payment, the company would deliver the goods to the buyer.
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