A specific duty is a fixed tax that’s applied to goods when they cross a country’s border. It’s charged based on the physical amount — like per kilogram, litre, or item — instead of a percentage of the value of the goods.
Specific duties help raise revenue and protect local industries. They’re also easier for customs authorities to calculate and enforce because they don’t depend on the declared value of the goods. This is especially helpful when product prices are hard to confirm or often manipulated.
How Specific Duties Are Calculated (With Example)
To work out a specific duty, multiply the duty rate by the quantity of goods. This makes the total cost easy to estimate before the shipment arrives.
For example, if a duty of $0.25 per kilogram applies to imported steel, a 10,000 kilogram shipment would attract a $2,500 duty. This stays the same no matter the value declared on the invoice.
The formula for total duty: $0.25 × 10,000 = $2,500
Specific duties are often used for bulk imports like raw materials, packaged food, and industrial goods. They simplify customs checks and reduce disputes over declared prices.
Why Governments Use Specific Duties
Governments use specific duties to make trade more predictable and easier to manage. These duties are simple to apply because they do not depend on the declared value of goods, which can often be underreported or disputed.
They are also useful when dealing with bulk imports like grains, fuel, or raw materials. In these cases, weight or volume is easier to measure than market price. This helps reduce fraud and speeds up customs processing.
Specific duties can also protect domestic producers from being undercut by low-cost imports. By setting a flat fee per unit, countries can raise the cost of foreign goods without needing to track global price changes.
Examples of Specific Duty in Action
Many countries use specific duties to manage trade on high-volume goods. These are some clear examples of how they work in practice:
- United States: Certain alcoholic beverages are subject to specific duties. For example, the federal excise tax on distilled spirits is $13.50 per proof gallon. (source: CBO.gov)
- European Union: The EU imposes specific duties on certain tobacco products. For instance, cigarettes are subject to a minimum excise duty of €90 per 1,000 cigarettes. (source: European Commision)
- Canada: Canada applies specific duties on certain dairy products. For example, over-quota imports of cheese are subject to a duty of $3.32 per kilogram. (source: Global Affairs Canada)
- India: India applies specific duties on certain petroleum products. For example, a specific excise duty of ₹20 per liter is levied on petrol. (source: godigit – excise duty on petrol and diesel in India)
Specific Duty vs. Ad Valorem Tariff
Specific duties and ad valorem tariffs are two common ways to tax imports, but they work differently.
| Feature | Specific Duty | Ad Valorem Tariff |
|---|---|---|
| Based on | Physical quantity (e.g. kg, litre) | Percentage of the declared customs value |
| Impact when prices drop | Cost stays the same | Tax amount decreases |
| Use cases | Bulk goods, raw materials | Consumer goods, luxury items |
| Admin complexity | Simple to apply | Requires accurate valuation |
Specific duties are easier to manage at the border, while ad valorem tariffs adjust automatically with price. For a full breakdown of ad valorem tariffs, see our guide: What Is an Ad Valorem Tariff?
When Specific Duty Is the Better Choice
In cases where product values are hard to verify, charging by unit makes trade easier to manage. This is often true for raw materials, low-grade goods, and unpackaged commodities where prices can vary widely.
A flat rate per kilogram or litre removes the need for customs officers to assess market value. It also reduces the risk of under-invoicing, which is common in some trade lanes. For countries with limited valuation tools, this approach keeps customs efficient and consistent.
How to Document and Declare Specific Duties in Trade
To declare a specific duty correctly, you need to list the right quantity on your trade documents. This includes your commercial invoice, packing list, and shipping instructions. Make sure units like kilograms, litres, or item counts match what the tariff rate is based on.
When preparing paperwork, include:
- The correct HS code
- Unit of measure used by customs
- Total quantity of each line item
- Any applicable exemptions or trade agreement details
Using a platform like IncoDocs helps you keep all this consistent across documents. Clear and accurate entries reduce customs delays and help avoid disputes or fines.
