Context

• Recently, a NITI Aayog member has favored imposing a Border Adjustment Tax(BAT) on imports to provide a level-playing field to domestic industries.

What is Border Adjustment Tax?

• a duty that is proposed to be imposed on imported goods in addition to the customs levy that gets charged at the port of entry.
• a fiscal measure that imposes a charge on goods or services in accordance with the destination principle of taxation.
• seeks to promote “equal conditions of competition” for foreign and domestic companies supplying products or services within a taxing jurisdiction.