Customs Duty in India: Let’s Understand it in Detail

byDilip PrasadLast Updated: January 23, 2024

Customs duty, also known as import duty, is a tax imposed by a government on goods imported into or exported out of a country. It is a source of revenue for the government and serves various purposes, including protecting domestic industries, regulating trade, and generating income.

What is Customs Duty in India – Check Types, Calculation & Latest Rates

Customs duty refers to the tax applied by the government of India on the import and export of goods. It is an indirect tax collected by the government whenever goods are traded internationally. Both the importer and exporter have to pay customs duty in India. All the policies associated with customs duty are designed and implemented by the regulatory body called ‘The Central Board of Excise and Customs (CBEC)’.

Read on to get all the details about customs duty and their prevailing charges in India.

Types of Customs Duty

As per the Customs Duty Act 1962, there are four types of customs duty in India. These are as given below:

Basic Customs Duty (BCD)

BCD is a common customs duty in India, which is imposed as the percentage of assessable value of goods imported. This value is calculated by adding product cost, insurance expense, and other associated freight costs for transporting the goods to India. BCD serves as an important source of income for the Indian Government and safeguards domestic industries by making imported items costlier than locally manufactured ones.

Additional Customs Duty (ACD)

Also referred to as Countervailing Duty (CVD), it is a type of customs duty imposed on specific imported goods in India. This duty is assessed at the same rate as the excise duty and applies to similar items manufactured in India. ACD aims to prevent the evasion of excise duty on goods manufactured domestically by imposing an equivalent duty on imported items.

Education Cess and Secondary and Higher Education Cess

An educational cess and higher secondary cess are applied to the goods imported into India. It is like an additional charge levied on the total amount of customs duty payable. As of now, the education cess is currently imposed at 2%, and the secondary and higher education cess at 1%. The amount collected from this customs duty is utilized by the Government of India for education initiatives in India.

Anti-Dumping Duty

Anti-dumping duty is a type of customs duty imposed on specific imported products at prices below their nominal value in their country of manufacture. This duty is calculated as a percentage of the imported goods’ value and is applied to prevent unfair competition in the domestic industry. It is important to note that this duty is applied to goods that are imported in huge quantities.

How to Calculate Customs Duty in India?

Customs duty can be calculated using the customs duty calculator provided on the official website of CBEC. However, you can also assess the customs duty on goods using the following steps:

Step 1: Determine assessable value

Calculate the value of goods by adding their cost, insurance, and freight charges.

Step 2: Identify duty rates

Check the customs tariff schedule to find the duty rates based on goods type, origin, and HSN (Harmonized System of Nomenclature) classification.

Step 3: Calculate Basic Customs Duty

Calculate BCD, the primary duty levied on imported goods. It is calculated as a percentage of the assessable value, as per the tariff schedule.

Step 4: Calculate Additional Customs Duty

Calculate CVD to offset domestic taxes and subsidies. It is calculated as a percentage of assessable value plus basic duty.

Step 5: Calculate education cess and other charges

Apply a 2% education cess on the total customs duty and consider any other applicable charges (e.g., Anti-dumping Duty, Safeguard Duty, or Special Additional Duty).

Step 6: Apply exemptions and concessions

If eligible, apply applicable exemptions or concessions based on import category or country of origin while calculating customs duty.

Latest Customs Duty Rates

The table below gives information on the prevailing customs charges in India to calculate customs duty.

Also Read: How to Cut Your Tax Liabilities?

How to Make Online Customs Duty Payments?

Importers and exporters can simply use online platforms to make customs-duty e-payments. The process for customs duty payment is simplified within the steps below:

  • Step 1: Go to the official website of the Indian Customs Electronic Data Interchange Gateway (ICEGATE)
  • Step 2: Fill in your import or export code, or simply log in with your credentials provided by ICEGATE.
  • Step 3: Select the “e-payment” option under the ‘Financial Services; tab to view your unpaid tax challan.
  • Step 4: Choose the ‘Duty Type’, ‘Document Type’, ‘Location’, and enter the ‘Identification Number’.
  • Step 5: Input the ‘ICEGATE USER ID’ and ‘Password’.
  • Step 6: Enter the ‘Captcha’ and click on ‘Verify & Proceed’.
  • Step 7: From the list of unpaid challans, select the specific challan to be paid.
  • Step 8: Select ‘South Indian Bank’ under ‘Net Banking’ and click on ‘Make Payment’.
  • Step 9: Verify the ‘Challan Details’ and click on ‘Pay’ with SIBerNet.

The ICEGATE portal users can also utilize the e-Sanchit Portal by the Central Board of Excise and customs. The portal allows you to easily file customs duty-related documents online without any hassle!

Customs duty is an indirect tax that many exporters and importers have to pay to send or receive goods internationally. It is regulated by ‘The Central Board of Excise and Customs (CBEC)’ and has different types. All these types of customs duty are applied based on the prevailing customs duty rates highlighted in the table above. Now, one can easily assess their customs duty and follow the aforementioned process to make a safe and secure tax payment.

Disclaimer: This blog is written to make it easy for readers to understand complicated processes. Some information and screenshots may be outdated as government processes can change anytime without notification. However, we try our best to keep our blogs updated and relevant.

Can I expect a rebate on exports in India?
Yes, the government of India provides many rebate options for export customs duty.
What are the factors that assess the customs duty of a product in India?
Many factors help in assessing the customs duty of a product, like the value, weight, and dimension of the product.
How can I check my customs duty charges in India?
To determine custom duty rates in India, it is necessary to have the HS code for your products. In India, the HS code is referred to as the HSN code. It is a code utilized in the Harmonised Commodity Description and Coding System, which is a universally recognized method for identifying different types of products.
How is customs duty calculated in India?
Customs duty in India is calculated by adding up the cost of goods, freight for transporting the goods, and insurance charges.

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