How works customs Duty in practice?
Customs Duty is payable on the value of the imported goods, services or financial transactions. It therefore applies to traded products, not to individuals. Like paying taxes, customs duty is enforced by legislation.
However, there are exceptions where the duty is not payable. There are so called free zones, where foreign visitors may buy and export goods free of duty. But it depends always on which country you are in, and to which country you travel. Not every combination is exempt from customs duties. An example of the free zones is duty-free shops at the airports, on planes or at border crossings.
Customs duty is one of the key financial instruments in foreign trade.
Countries (states) therefore introduce a duty to protect a domestic market or to increase government revenues, i.e. the state budget.