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Customs duty refers to the tax levied on the import and export of goods. It is an indirect tax that the Government imposes on goods when they cross international borders. Any kind of tax is revenue for that Government, so is Customs duty. The Indian Government utilises this tax to regulate movements of goods (especially prohibited goods) in and out of the country and to protect domestic industries. The Central Board of Excise and Customs (CBEC) is the governing body that designs all policies regarding Customs Duty in India and is responsible for all the matters related to it.
Read on to know more about Customs duty in India.
There are different types of Customs duty in India. They are:
The importer or exporter of goods is liable to pay Customs Duty only, not everyone.
An importer is a person whose name is mentioned in bills of entry or consignment. On the other hand, exporters are those people who export goods that are produced domestically and then sold to traders in foreign countries.
The Central Government imposes a Customs duty on the import and export of goods. However, there are certain items that are exempted from Customs duty. The Central Government grants exemption by issuing and passing notification in the official gazette.
There are two types of exemptions from Customs duty. These are as follows:
When the Central Government understands the necessity of exempting Customs duty for the public interest, it does so by issuing notification in the Official Gazette (either fully or as per requirement).
When the Central Government understands the necessity of exempting Customs duty for the public interest does so by special order. These types of exemptions occur only under exceptional circumstances.
The calculation of Customs duty occurs on an ad valorem or specific basis. To be precise, the value of goods determines the value of Customs duty. These goods are valued as per the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
There are four methods of calculating the accurate value of goods. These are as follows:
Comparative Value Method (Rule 4 and 5)
This method follows and compares the transaction value of an identical item.
Deductive Value Method (Rule 7)
This method uses the sales price of goods in the importing country.
Computed Value Method (Rule 8)
Under this method, the calculation occurs on costs related to materials, fabrication, and profit in the producing country.
Fallback Method (Rule 9)
This method follows the calculations of previous methods that offer higher flexibility.
Importers and exporters can pay Customs duty by following the steps mentioned below.
Step 1 – Visit the official website of ICEGATE.
Step 2 – Enter the import or export code or log in with credentials provided by ICEGATE.
Step 3 – Click on the ‘e-payment’ option. Taxpayers can now see all the unpaid tax challan.
Step 4 – Select a challan (s) and choose a payment mode or bank. Complete the transaction. Taxpayers will be redirected to the ICEGATE portal.
Step 5 – Click on ‘Print’ to save the payment receipt.
The Indian taxation system has been benefitted massively from digitisation.
Wondering how? Read the following section!
The Central Board of Excise and Customs launched e-SANCHIT to streamline works related to Customs duty. On this online platform, importers and exporters of goods can file customs-related documents online.
Note: ICEGATE registered users can access this portal. Under this scheme, importers and exporters of goods need not provide hard copies of already uploaded documents to respective officers. This initiative by the Central Government aims to reduce the interface between trade and Customs officers and increase clearance for importers and exporters.
Refer to the table mentioned below to learn about the latest rate for Basic Customs Duty.
Type of Item |
Tariff Code (HSN) | Basic Customs Duty | |
| Previous | Current | ||
Aviation turbine fuel |
2710 19 20 |
0% |
5% |
Colored gemstones that are cut and polished |
71 |
5% |
7.5% |
Footwears |
6401 to 6405 |
20% |
25% |
Miscellaneous plastic articles such as furniture fittings, office stationery, statuettes, decorative sheets, bangles, beads, etc. |
3926 |
10% |
15% |
Air conditioners |
8415 |
10% |
20% |
Compressors for refrigerators and air conditioners |
8414 30 00/8414 80 11 |
7.5% |
10% |
Plastic articles for packing and conveyance such as bottles, containers, cases, insulated wares, etc. |
3923 |
10% |
15% |
Radial car tyres |
4011 10 10 |
10% |
15% |
Washing machines (less than 10kg) |
8450 |
10% |
20% |
Silversmith/goldsmith wares/articles and their parts made of metal clad with precious metal or of precious metal |
7114 |
15% |
20% |
Household refrigerators |
8418 |
10% |
20% |
Jewellery articles and their parts, either of metal clad with precious metal or of precious metal |
7113 |
15% |
20% |
Trunks, executive cases, suitcases, briefcases, travel bags, other bags, etc. |
4202 |
10% |
15% |
Bath, sink, shower bath, wash basin, etc., made of plastic |
3922 |
10% |
15% |
Diamonds that are lab grown |
71 |
5% |
7.5% |
Tableware, household plastic items, kitchenware |
3924 |
10% |
15% |
Diamonds (broken, half-cut, or semi-processed) |
71 |
5% |
7.5% |
Speakers |
8518 29 100 |
10% |
15% |
In case of non-levy or short-levy of customs duty, the responsible people must pay interest on the duty not paid or short-paid till the payment at rate not less than 10% but not exceeding 36%.
In the Union Budget for 2022-23, the Finance Minister of India, Nirmala Sitharaman, brought certain changes in Customs duty on various items.
With such a detailed discussion, we have reached the end of this piece on Customs duty in India. Read the details carefully and pay Customs duty online without any hassle.
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