The building blocks
- Assessable value: generally the CIF value (cost + insurance + freight) converted at the customs exchange rate.
- Basic Customs Duty (BCD): rate depends on the HS code; may be reduced by notifications or FTAs.
- Social Welfare Surcharge (SWS): usually 10% of BCD, with some exemptions.
- IGST: charged on assessable value + BCD + SWS, at the GST rate of the product.
- Other duties: anti-dumping, safeguard or other duties where notified.
Worked example
| Item | Basis | Amount (₹) |
|---|---|---|
| Assessable value (CIF) | – | 1,00,000 |
| BCD at 10% | 10% of 1,00,000 | 10,000 |
| SWS at 10% of BCD | 10% of 10,000 | 1,000 |
| Value for IGST | 1,00,000 + 10,000 + 1,000 | 1,11,000 |
| IGST at 18% | 18% of 1,11,000 | 19,980 |
| Total duty | 30,980 |
The IGST portion (₹19,980 here) can usually be claimed as input tax credit. Rates in this example are for illustration only.
How to reduce duty legally
- Correct HS classification
- Free Trade Agreement benefits with a valid certificate of origin
- MOOWR to defer duty, or IGCR for end-use concessions
- EPCG or Advance Authorisation for exporters
Frequently asked questions
Is IGST paid at import refundable?
IGST paid on imports can generally be claimed as input tax credit by a GST-registered importer.
Which exchange rate is used for customs?
The exchange rate notified by CBIC for customs purposes, which is updated periodically.
This article is general information, not legal advice. Rules and rates change; talk to our team before acting on it.