Customs Duty in India - Types, Rates and Calculation
The Government of India levies a Customs Duty on all the imports within and some of the exports from the country. The amount to be paid as customs duty can be determined by several factors such as value, weight, dimensions, etc.
Table of Contents
- What is Customs Duty?
- Union Budget 2025 Updates on Customs Duty
- Latest Customs Duty Rates in India
- Objectives of Customs Duty
- Types of Customs Duty
- Customs Duty Calculations
- Online Customs Duty
- How to Pay Custom Duty Online?
- Customs Duty Calculator
- Understanding eSanchit for Customs Documentation
- Latest Updates
Customs duty is a tax imposed on goods crossing international borders to regulate their movement. It aims to protect a nation's economy, jobs, environment, and residents by controlling the flow of goods, particularly restricted items.
What is Customs Duty?
- The Government of India levies a Customs Duty on all the imports within and some of the exports from the country.
- The amount to be paid as customs duty can be determined by several factors such as value, weight, dimensions, etc.
Union Budget 2025 Updates on Customs Duty
The updates on custom duty according to Union Budget 2025:
1. Rationalisation of Customs Tariff and Duty Inversion: The Union Budget 2025 proposed the further reduction of seven tariff rates, leaving only 8 (including ‘zero’), along with a single cess/surcharge per item. Social Welfare Surcharge is proposed to be exempted on 82 tariff lines with cess. 2. Duty Exemption on Certain Medicines and Healthcare Relief:
- Full BCD exemption proposed for 36 lifesaving drugs, including cancer and rare disease treatments.
- Six medicines to be granted a 5% concessional rate.
Further, BCD exemptions have been proposed for patient-assistance programmes run by pharmaceutical companies. This will be applicable if the medicines are supplied free of cost to patients, with 37 new medicines and 13 additional programmes to be added. 3. Industry-specific proposals: Critical minerals:
- Full BCD exemption on 25 critical minerals that are not available domestically.
- 12 more critical minerals are fully exempt to support domestic manufacturing and job creation.
Textiles:
- Full exemption on two shuttle-less looms.
- BCD on knitted fabrics set at 20% or Rs.115 per kg (whichever is higher).
Electronics:
- BCD on IFPD raised to 20%, reduced to 5% on open cell components.
- LCD or LED TV open cell components fully exempt.
Lithium-Ion Batteries:
- BCD exemption on 35 EV battery and 28 mobile battery manufacturing capital goods.
Shipping:
- BCD exemption on shipbuilding materials extended for 10 years.
- The same benefit for shipbreaking.
Handicrafts:
- Export time has been extended to 1 year (plus three months if needed).
- Nine more duty-free inputs added.
Leather:
- Full BCD exemption on Wet Blue leather.
- 20% export duty exemption on crust leather for small tanners.
Some Details as per the Customs Act of 1962
- The law defines customs duty in India
- Gives the government the authority to impose duties on imports and exports
- Prohibit the import and export of products
- Establish procedures for import and export
- Prosecute offenders.
- Impose other sanctions.
- The Central Board of Excise & Customs is responsible for all things pertaining to customs duty (CBEC).
- The Department of Revenue inside the Ministry of Finance in turn houses the CBEC.
- CBEC develops policies relevant to the administration of customs formations, collection or levying of customs duties, prevention of smuggling, and detection of duty evasion.
- CBEC has various divisions that take care of the fieldwork including Commissionerate of Customs, Customs, Customs (preventive and Central Excise Zones, Central Revenues Control Laboratory and Directorates, etc. CBEC also oversees proper tax administration for foreign and inland travel.
Each product has a specific duty rate determined by factors such as its origin and composition. Items brought into India must be declared according to customs regulations, including purchases made abroad and gifts received from outside the country. Compliance with these rules ensures transparency and adherence to legal requirements when importing goods into India. Here are more details regarding Customs Duty in India.
Note: Custom Duty has been replaced by the Goods and Services Tax (GST) starting 1 July 2017
Latest Customs Duty Rates in India
These are the Latest Rates for Basic Customs Duty (BCD) tariffs:
Tariff Code (HSN) | Item | BCD Rates |
2515 11 00, 2515 12, 2516 11 00, 2516 12 00 | All goods | 20% |
2933 59 | 7.50% | |
3406 | 20% | |
3824 60 | 20% | |
3824 99 00 | 7.50% | |
6401, 6402, 6403, 6404, 6405 | 20% | |
7404 00 12, 7404 00 19, 7404 00 22 | Nil | |
8541 42 00, 8541 43 00, 8541 49 00 | 20% | |
9401, 9403, 9404, 9405 | 20% | |
8903 | 20% | |
3920, 3921 | Poly vinyl chloride (PVC) flex films | 20% |
6802 10 00, 6802 21 10, 6802 21 20, 6802 21 90, 6802 91 00, 6802 92 00 | Marble slabs | 20% |
7113 | All goods, except than goods covered under Section 356, 357 and 364C of the Table appended to the Notification no. 50/2017 Customs (dated the 30 June 2017) | 20% |
7114 | All goods, other than goods covered under Section 356 and 357 of the Table appended to the Notification no. 50/2017 Customs (dated the 30 June 2017) | 20% |
8102 97 00 | Molybdenum waste and scrap | Nil |
8103 30 00 | Tantalum waste and scrap | |
8106 90 10 | Waste and scrap of bismuth and bismuth alloys | |
8002 | Tin waste and scrap | |
8101 97 00 | Tungsten waste and scrap | |
8105 30 00 | Cobalt Waste and Scrap | |
8109 31 00, 8109 39 00 | Zirconium waste and scrap | |
8112 13 00 | Beryllium waste and scrap | |
8110 20 00 | Antimony waste and scrap | |
8112 41 20 | Rhenium waste and scrap | |
8112 61 00 | Cadmium waste and scrap | |
8712 00 10 | Bicycles | 20% |
8702 | All goods, other than the goods covered under Section 524 and 525 of the Table appended to notification No. 50/2017-Customs (dated the 30 June 2017) | 20% |
8704 | All goods except goods covered under Section 524 and 525 of the Table appended to notification No. 50/2017-Customs (dated the 30 June 2017) | 20% |
8703 | All goods except goods covered under S. No. 526 and S. No. 526A of the Table appended to notification No. 50/2017-Customs (dated the 30 June 2017) | 70% |
8711 | All goods except goods covered under Section 531 and 531A of the Table appended to notification No. 50/2017-Customs (dated the 30 June 2017) | 70% |
9028 30 10 | Electricity meter for alternating current (Smart meter) | 20% |
9503 00 91 | Parts of electronic toys | 20% |
9803 00 00 | All dutiable articles, imported by a passenger or a member of a crew in his baggage other than goods covered under notification No. 26/2016-Customs (dated the 31 March 2016) | 70% |
9802 00 00 | All goods, other than the goods covered under Section 606A of the Table appended to notification No. 50/2017- Customs (dated the 30 June 2017) | 70% |
9804 | All dutiable goods imported for personal use other than those Section 608 of the Table appended to notification No. 50/2017-Customs (dated the 30 June 2017) | 20% |
Objectives of Customs Duty
The following are the primary objective of Custom Duty:
- Revenue Generation: Customs duties contribute to government revenue, helping finance public services and infrastructure development.
- Protection of Domestic Industries: By imposing tariffs on imported goods, customs duty aims to protect domestic industries from foreign competition, thereby safeguarding jobs and fostering economic growth.
- Regulation of Trade: Customs duty helps regulate the flow of goods across borders, ensuring compliance with trade regulations, safety standards, and intellectual property rights.
- Preventing Unfair Trade: Anti-dumping duties stop foreign producers from underpricing goods, protecting local industries, preserving jobs, and ensuring fair market competition.
- Protecting National Security: Governments use tariffs on critical imports to secure supply chains, safeguard defense needs, and reduce reliance on foreign sources.
Types of Customs Duty
Customs duties are levied almost universally on all goods imported into the country. Export duties are levied on a few goods as specified under the Second Schedule.
Import duties are not levied on a few items including lifesaving drugs/equipment, fertilizers, food grains etc. Import duties are further divided into the following types:
Types of custom duty | Rates | Applicable |
Basic Customs Duty (BCD) | 0 to 100% (depending upon the HS code and its origin) | On all goods imported in India. Actual fee depends on:
Some goods are exempted from BCD such as lifesaving drugs |
Special Additional Duty (SAD) | 4.00% | On imported goods which are equivalent to the locally produced good subject to sales tax. Calculated on total assessable value of good. |
Countervailing Duty (CVD) | 0% to 12% (depends upon the goods) | On goods that received tax benefits or subsidies in the country of manufacture. This duty prevents undue advantage of these goods over locally produced goods. |
Social Welfare Surcharge (SWS) | 10% | Introduced in 2018 to support government social welfare project, which replaces Education Cesses. |
Anti-dumping Duty | As per notification | Imposed to prevent dumping, which is an unfair international trade practice where goods are sold below market value, thereby damaging local industry. |
Compensation cess | Depends upon product type | On goods such as tobacco, and pollution causing goods such as coal and cars. This was introduced to compensate revenue loss of states due to the implementation of IGST. |
Safeguard Duty | As per notification | Imposed by Indian Customs authorities on all goods imported in Indian that are damaging local producers. |
Integrated Goods & Services Tax (IGST) | 5.00%, 12%, 18%, and 28% | The Integrated Goods & Services Tax (IGST) introduced in 2017 brings all imported and local goods under one of the seven different rates. |
Customs handling fee | 1.00% | Applied apart from other taxes as applicable. |
Customs Duty Calculations
Customs fees are assessed based on the worth of the goods, or on a specified or ad valorem basis. Rule 3(i) of the 2007 Customs Valuation (Determination of Value of Imported Commodities) Rules establishes the value of goods.
This regulation bases the worth of imported products on the transaction value after it has been modified in accordance with Rule 10's guidelines.
Items must be valued using alternative methods in accordance with the following hierarchy if there is a lack of quantifiable or objective data regarding the valuation factors, the valuation conditions are not met, or there are questions regarding the accuracy or truth of the declared value as per Rule 12 of the Valuation Rules 2007.
- Comparative Value Method - which compares the transaction value of similar items (Rule 4 & Rule 5)
- Deductive Value Method - which uses the sale price of item in importing country (Rule 7)
- Computed Value Method - which uses the costs related to fabrication, materials and profit in production country (Rule 8)
- Fallback Method - which is based on the earlier methods with higher flexibility (Rule 9)
Online Customs Duty
The following are the details regarding online custom duty:
- One can access custom duty online from Indian Customs Electronic Commerce/Electronic Data Interchange (EC/EDI) Gateway (ICEGATE)
- The clients of the Customs Department can avail themselves of E-Filing services including trade and cargo carriers, collectively known as Trading Partner
- ICEGATE offers services such as:
- Electronic filing of Bill of Entry
- Shipping Bills
- Other related messages between customs and the trading partner through e-mail, FTP and web-upload
- Through this portal, shipping and airline agents can file manifest
- For logistics and cargo-related information, cargo logistics and custodians can interact with customs EDI
- The portal also offers other services apart from e-filing are:
- E-payment
- Document tracking
- Online registration for IPR
- IE code status
- Verification of DEPB/EPCG/DES licenses
- PAN-based CHA data
How to Pay Custom Duty Online?
Custom duty can be paid online by following the steps given below:
Step 1: Access the ICEGATE e-payment portal
Step 2: Enter Import/Export code or login credential supplied by ICEGATE
Step 3: Click on e-payment
Step 4: You can now see all the unpaid challans in your name
Step 5: Select the challan you want to pay and select a bank or payment method
Step 6: You will be redirected to the particular bank's payment gateway
Step 7: Make the payment
Step 8: You will be redirected to ICEGATE portal, click print to save payment copy
Customs Duty Calculator
The ICEGATE portal contains a bespoke duty calculator that you can use. The HS Code (CTH Code) of the item you wish to import must be entered once you have accessed the calculator. 30-character limit for description; choose origin country (for antidumping or preferential duty). When you select Search, a list of items that meet your search parameters will appear.
You can obtain a chart that contains all the details about the customs duty on a certain item by choosing one. You can enter values to this dynamic table to get the precise customs duty you will be required to pay.
Understanding eSanchit for Customs Documentation
SWIFT aims to minimize interaction with government bodies, cutting time and costs. E-SANCHIT is a part of SWIFT that enables digital upload and storage of tax documents and eliminates the need for physical visits to PGAs. This paperless system simplifies and speeds up consignment clearance, making the process more efficient and contact-free.
The features of e-SANCHIT are mentioned below:
- Paperless processing: e-SANCHIT enables traders to submit supporting documents to PGAs online through ‘Integrated Declaration’ via the ICEGATE portal.
- Integrated Declaration: This single digital form includes data needed for clearances from six government agencies and can be digitally signed and submitted.
- Faster clearance: Eliminating physical visits to departments speeds up the process, reduces the costs, and boosts efficiency in import or export operations.
Latest Updates
Union Budget 2024: Customs Duty on Gold and Silver Reduced
Finance Minister of India, Nirmala Sitharaman has announced the Union Budget on 23 July 2024, where she has mentioned some changes in customs duty and here are the following changes:
- Custom duty on gold and silver to be reduced to 6% and 6.4% for platinum respectively.
- There will be a comprehensive review of Custom Duty rates over the next six months.
Customs Duty Update in Union Budget 2023
Finance Minister of India, Nirmala Sitharaman has announced the Union Budget on 1 February 2023, where she has mentioned some changes in customs duty and here are the following changes:
- The concessional duty on lithium-ion cells will be continued for another year
- Custom duty of camera lenses reduced to 2.50%
- Custom duty on open cells of LED TV panels reduced to 2.50%
- Custom duty reduced for camera lenses of mobile phone
Customs Duty Update in Union Budget 2022
Finance Minister Nirmala Sitharaman has recently announced the Union Budget on 1 February 2022. In the latest budget speech, the Finance Minister announced a few changes concerning customs duty. The following proposals have been made:
- With Subject to IGCR rules, Exceptions are Introduced to allow duty free imports on items like handicrafts, leather goods and apparel.
- After a detailed review of custom duty exemptions , more than 40 excemptions Proposed to gradually phased out.
FAQs on Customs Duty in India
- What is basic customs duty?
Basic customs duty is a type of tax imposed under the Customs Act, 1962. The basic customs duty charged differs from item to item, and the Central Government of India has the right to exempt or reduce any item from being taxed the basic customs duty.
- How does customs duty in India impact international trade?
Customs duty affects the cost of imported goods, influencing consumer prices, trade negotiations, economic policies, and competitiveness of domestic products.
- What are the factors that helps determining the customs duty of a product in India?
The factors that help in determining the customs duty of a product are the value, weight, and dimension of the product.
- Are personal belongings subject to customs duty when moving internationally?
Personal belongings may be subject to customs duty, depending on the country's regulations and the value of the items. Some countries offer duty-free allowances for personal effects.
- Where can I find information on customs duty rates for specific goods?
Information on customs duty rates for specific goods can be found on the official customs department website or by contacting the customs office directly.
- What is customs duty exemption?
Customs duty exemption means that the Central Government of India has the right to not allow any custom duty to be charged on a particular item under the Customes Act, 1962. This can be done for good which are of strategic or secret nature or is intended to be used for charitable purposes.
- What documents are required for customs clearance?
Required documents typically include a commercial invoice, bill of lading or airway bill, packing list, import or export license, and any other relevant certificates.
- How do trade agreements affect customs duty?
Trade agreements between countries can reduce or eliminate customs duties on certain goods, promoting trade between the signatory countries.
- Can I appeal a customs duty assessment?
Yes, if you believe the customs duty assessment is incorrect, you can appeal the decision through the appropriate legal channels as provided by the customs authority.
- What is the process for clearing goods through customs?
The process involves submitting a customs declaration, paying the applicable duty and taxes, and undergoing inspection by customs officials. Once cleared, the goods can be released for delivery.
- Can customs duty rates change?
Yes, customs duty rates can change based on government policies, international trade agreements, and economic conditions. It is important to stay updated on current rates.
- Do I need to pay customs duty on gifts received from abroad?
Yes, customs duty may be applicable on gifts received from abroad, depending on their value and the country’s specific regulations. Hence, you need to declare the items acquired from abroad as gifts.
- How can I calculate the customs duty on an imported item?
You can calculate customs duty by checking the applicable tariff rate for the item on the customs department's website or using online duty calculators provided by customs authorities.
- Why is customs duty imposed?
Customs duty is imposed to protect a nation's economy, jobs, environment, and residents by regulating the movement of goods, especially prohibited and restricted items, in and out of the country.
- How is the rate of customs duty determined?
The rate of customs duty is determined based on various factors, including the type of goods, their value, country of origin, and specific trade agreements between countries.
- Where can I pay custom duty in India?
You can pay your customs duty by visiting the ICEGATE website where you will have to login to the portal by entering your login credentials. You will find the e-payment link, click on it and select the mode of payment. You can then follow the steps to complete the payment of your customs duty.
- Who imposed customs duty in India?
The customs duty is imposed by the Government of India under the Indian Customs Act formulated in 1962 under the Constitution of India under Article 265.
News about Custom Duty Tax Rates
Union Budget 2025: More than 30 lifesaving medicines exempted from Basic Customs Duty
Under the Union Budget 2025, the Finance Minister announced that 36 lifesaving medicines would be exempted from Basic Customs Duty (BCD) which will benefit those suffering from cancer, severe chronic illnesses, and specific rare diseases.
Apart from this, the FM also proposed that six lifesaving medicines would benefit from 5% concession on customs duty. Bulk drugs for the manufacture of the above would be given full concessional duty and exemption as well.
Under the Patient Assistance Programmes conducted by pharmaceutical companies, specified drugs and medicines would also be fully exempt from BCD if they are supplied to patients totally free of cost to patients. The FM also proposed to add 13 new patient assistance programmes and 37 new medicines under the programmes.
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