Quick answer
Import duty in India is calculated on the assessable value, which is usually the CIF value (cost, insurance and freight) converted to rupees at the customs exchange rate. Basic Customs Duty (BCD) is charged on the assessable value. Social Welfare Surcharge (SWS) is generally 10% of the BCD. IGST is then charged on the assessable value plus BCD plus SWS. For example, goods with an assessable value of ₹10,00,000, 7.5% BCD and 18% IGST pay ₹2,77,350 in total. Some goods also attract other levies, such as AIDC or anti-dumping duty, so always check the tariff for your HS code.
Key takeaways
- Duty is charged on the assessable value: invoice value plus freight and insurance to the Indian port, in rupees.
- Customs uses its own notified exchange rate, not your bank's rate.
- SWS is generally 10% of BCD, and IGST is charged on value + BCD + SWS, not on the value alone.
- If you are GST-registered, the IGST paid at import can be claimed as input tax credit.
- A certificate of origin under a trade agreement, or a scheme like EPCG, can lower the duty legally.
In this guide
- The duties that make up the import bill
- Step 1: Work out the assessable value
- Step 2: Find the duty rates for your HS code
- Step 3: Calculate BCD, SWS and IGST (worked example)
- Ways to pay less duty, legally
- Common mistakes that lead to extra duty
- Get a duty estimate before you ship
- Frequently asked questions
The duties that make up the import bill
For most goods, the import bill in India has three parts:
| Duty | What it is | Charged on |
|---|---|---|
| Basic Customs Duty (BCD) | The main customs duty. The rate depends on the HS code. | Assessable value |
| Social Welfare Surcharge (SWS) | A surcharge on customs duty, generally 10%. Some goods are exempt. | The BCD amount |
| IGST | Integrated GST, at the same rate as GST on that product in India. | Assessable value + BCD + SWS |
Some products also carry the Agriculture Infrastructure and Development Cess (AIDC), anti-dumping duty, safeguard duty or compensation cess. These are set by HS code and sometimes by country of origin, so check them for your product before you place an order.
Step 1: Work out the assessable value
The assessable value is the transaction value (the price on your invoice) plus the cost of getting the goods to the Indian port of import:
- CIF invoice: freight and insurance are already included, so the invoice value is the starting point.
- FOB invoice: add the actual ocean or air freight and the insurance premium.
- Freight not known: customs valuation rules add 20% of the FOB value.
- Insurance not known: the rules add 1.125% of the FOB value.
Convert the total to rupees at the customs exchange rate. CBIC notifies these rates for major currencies, and the rate in force on the date the Bill of Entry is filed applies. It is usually slightly different from your bank's rate.
Step 2: Find the duty rates for your HS code
Look up your 8-digit HS code in the Customs Tariff (on CBIC's website or the ICEGATE duty calculator) for the BCD and IGST rates. Then check whether any exemption notification lowers the rate, and whether anti-dumping or safeguard duty applies to your product and origin. A wrong HS code is the single biggest cause of wrong duty.
Step 3: Calculate BCD, SWS and IGST (worked example)
Say you import machinery parts with an assessable value of ₹10,00,000, a BCD rate of 7.5% and an IGST rate of 18%. These rates are only for the example; your product's rates may be different.
| Line | How it is worked out | Amount (₹) |
|---|---|---|
| Assessable value | CIF value in rupees | 10,00,000 |
| Basic Customs Duty | 7.5% of 10,00,000 | 75,000 |
| Social Welfare Surcharge | 10% of 75,000 | 7,500 |
| Value for IGST | 10,00,000 + 75,000 + 7,500 | 10,82,500 |
| IGST | 18% of 10,82,500 | 1,94,850 |
| Total duty and tax | 75,000 + 7,500 + 1,94,850 | 2,77,350 |
The total comes to ₹2,77,350, about 27.7% of the assessable value. If you are registered under GST, the ₹1,94,850 IGST can be claimed as input tax credit, so your real cost is the BCD and SWS: ₹82,500.
Ways to pay less duty, legally
- Trade agreements: goods from a partner country, such as the UAE under the India–UAE CEPA, can get a lower rate with a valid certificate of origin. You also need to keep the origin information that customs can ask for.
- EPCG authorisation: capital goods for export production can be imported at zero customs duty, against an export obligation.
- Advance Authorisation: inputs used to make export goods can be imported duty-free.
- Bonded warehousing: store goods in a customs bonded warehouse and pay duty only when you take them out.
- Correct classification: the right HS code is sometimes lower than the one a supplier puts on the invoice. It must be correct, not just cheaper.
Common mistakes that lead to extra duty
- Calculating duty on the invoice value alone and forgetting freight and insurance.
- Using the bank's exchange rate instead of the customs rate.
- Calculating IGST on the assessable value only, without adding BCD and SWS.
- Missing anti-dumping duty on products from certain countries.
- Copying the supplier's HS code without checking it against the Indian tariff.
- Declaring a value customs doesn't accept. Customs can reject a value it doubts and reassess it.
Get a duty estimate before you ship
We work out the HS code and the duty in advance for every shipment we clear, so the payment never holds up your cargo. Share your product, invoice value and origin on WhatsApp, or see our import documentation service.
Frequently asked questions
It is the transaction value of the goods plus the freight and insurance to the Indian port of import, converted to rupees at the customs exchange rate. Duty is calculated on this value.
SWS is charged on most imports, generally at 10% of the Basic Customs Duty. Some goods are exempt or charged at a lower rate, so check the tariff for your HS code.
Yes. If you are registered under GST and use the goods for business, the IGST paid on the Bill of Entry can be claimed as input tax credit. BCD and SWS cannot be claimed back this way.
Customs uses the exchange rate notified by CBIC that is in force on the date the Bill of Entry is filed. This is usually different from the rate your bank gives you.
The Indian Customs Tariff on CBIC's website and the duty calculator on ICEGATE list rates by HS code. Exemption notifications can lower them, and anti-dumping duties can add to them. We can confirm the rate for you from your product details.
Related services
Neptoria customs team
Written by the customs and documentation team at Neptoria Clearing And Logistics, a customs house agent in Surat that clears cargo at Hazira, ICD Sachin, Mundra, Kandla and Ahmedabad Air Cargo.
Rules and rates change. This guide is general information, not legal advice. Last updated 9 November 2026.
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