Section 7 of CTA, 1975 : Section 7: Duration Of Protective Duties And Power Of Central Government To Alter Them

Explanation using Example

Imagine a scenario where the Government of India has imposed a protective duty on imported solar panels to encourage the use of domestically manufactured panels. This duty is listed in the First Schedule of the Customs Tariff Act, 1975, and is intended to protect the local solar panel industry from foreign competition.

Over time, the government realizes that the protective duty is no longer necessary as the local industry has become self-sufficient and competitive. Alternatively, the duty might be too high, making solar panels unnecessarily expensive for Indian consumers. To address this, the Central Government conducts an inquiry and decides to reduce the protective duty.

They issue a notification in the Official Gazette, announcing the reduction in duty. This notification is then presented to both houses of Parliament. If Parliament is in session, the notification is laid before it immediately; if not, within seven days of reassembly. Parliament must then approve the change within fifteen days.

If later the government finds that the circumstances have changed again and it needs to rescind the reduced duty, it can issue another notification in the Official Gazette to revert the changes made.