CA Foundation · Business Economics · International Trade
A specific tariff differs from an ad valorem tariff because a specific tariff is:
A specific tariff is a fixed amount of duty charged on each physical unit of an imported good, such as ₹50 per kg, irrespective of its price. A percentage of value is an ad valorem tariff, and a quantity limit is a quota.
- AA fixed amount of duty charged per physical unit of the imported goodCorrect
- BA percentage charged on the value of the imported good
- CA limit on the number of units that can be imported
- DA duty levied only on exports of the good
Explanation
A specific tariff is a fixed rupee amount per unit, such as ₹50 per kg, regardless of the price. A percentage on value is an ad valorem tariff, so option 2 describes the other type. A quantity limit is a quota, which is a non-tariff barrier.
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