Start with the assessable value
Duty is charged on the assessable value: broadly, the cost of the goods plus freight and insurance to the Indian port (the CIF value), converted to rupees at the exchange rate notified by Customs.
Then three layers, in order
- Basic Customs Duty (BCD): a percentage of the assessable value, set by the HS code. This is why classification matters so much.
- Social Welfare Surcharge (SWS): usually 10% of the BCD, not of the value. Some goods are exempt.
- IGST: charged on the assessable value plus BCD plus SWS, at the GST rate for the goods.
Some goods also attract compensation cess, anti-dumping duty or safeguard duty.
A worked example
Goods with an assessable value of ₹1,00,000, a BCD rate of 10% and IGST at 18%:
- BCD: 10% of ₹1,00,000 = ₹10,000
- SWS: 10% of ₹10,000 = ₹1,000
- IGST: 18% of ₹1,11,000 = ₹19,980
- Total duty: ₹30,980
If you are registered under GST, the IGST paid at import can usually be claimed as input tax credit. BCD and SWS cannot.
Where duty can come down
- A correct HS code. The wrong one can cost more, or bring a penalty later.
- Free trade agreement rates, with a valid certificate of origin.
- Exemption notifications and DGFT schemes such as Advance Authorisation or EPCG.
Send us the product and invoice and we will work out the duty before you ship.