Mixed tariff
Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
A mixed tariff sets two possible duties on a good. One is ad valorem, a percentage of the good's value. The other is specific, a fixed amount per unit. Customs charges whichever of the two gives the higher (or, if the rule says so, the lower) duty. A "whichever is higher" rule sets a minimum duty even when import prices are very low.
Example
The rule is 10% or ₹30 per kg, whichever is higher. On 1 kg worth ₹200, 10% is ₹20, so the duty is ₹30. On 1 kg worth ₹500, 10% is ₹50, so the duty is ₹50.
Don't confuse with
- Compound tariff: this charges the ad valorem and specific duties together (for example, 10% + ₹20 per kg). A mixed tariff charges only one of them.
Related concepts
- Tariff
- Ad valorem tariff
- Specific tariff
- Compound tariff
- Export duties
- Duty drawback
- Tariff escalation
- Tariff peak
- Effective rate of protection
- Bound tariff rate