How Indian customs works out the duty
- Assessable value = cost of the goods + freight + insurance up to the Indian port (CIF), converted to rupees at the customs exchange rate. If freight is not known, customs takes 20% of the FOB value; if insurance is not known, 1.125% of FOB. Since 2017 the old 1% “landing charge” is no longer added.
- Basic customs duty (BCD) = assessable value × the BCD rate for the product’s HS code.
- Social welfare surcharge (SWS) = 10% of the BCD for most goods (some goods are exempt or pay a different rate).
- IGST = (assessable value + BCD + SWS + any other duties) × the GST rate for the product.
BCD and SWS are a real cost. IGST works like GST you pay to a supplier: a GST-registered business can usually claim it back as input tax credit, so the calculator shows the landed cost both ways.
Worked example
Goods worth $10,000 FOB at ₹88.50 = ₹8,85,000. With freight at 20% and insurance at 1.125% of FOB, the assessable value is ₹10,71,956. BCD at 10% = ₹1,07,196; SWS at 10% of that = ₹10,720; IGST at 18% on ₹11,89,871 = ₹2,14,177. Total duty and tax: ₹3,32,092, of which ₹2,14,177 IGST can usually be claimed back.
Things that change the answer
- Free trade agreements (ASEAN, UAE, Australia, Japan, Korea and others) can cut BCD to zero, but only with a valid certificate of origin and the CAROTAR rules met.
- Anti-dumping or safeguard duty on some products from some countries can be much larger than BCD.
- Agriculture Infrastructure and Development Cess (AIDC) applies to a few goods, sometimes instead of part of the BCD.
- Courier imports for personal use follow a separate, simpler rate.
Questions
What is the assessable value in customs?
The CIF value — cost of goods, freight and insurance to the Indian port — converted to rupees at the CBIC customs exchange rate. Duty is calculated on it.
Is IGST on imports a cost?
Not for a GST-registered business that uses the goods for taxable supplies: IGST paid on the bill of entry can be claimed as input tax credit. For individuals and unregistered buyers it is a real cost.
Why does customs use 20% for freight?
When the actual freight cannot be established, the Customs Valuation Rules add 20% of the FOB value for transport and handling, and 1.125% for insurance.
Where do I find the duty rate for my product?
Find the 8-digit HS code of your product and look it up in the Customs Tariff on the CBIC website or the ICEGATE duty calculator. A customs broker can confirm it.
Sources
- CBIC — Customs Tariff and exchange rate notifications
- ICEGATE — Indian Customs EDI gateway
- Customs valuation changes 2017 (Notification 91/2017-Customs N.T.), summary
Last checked 2026-11-11. Free to use; please check important details before you rely on them.