Import Duty Calculation India 2026: Step-by-Step Formula with Worked Examples
Import duty in India = Basic Customs Duty (BCD) + Social Welfare Surcharge (SWS, 10% of BCD) + IGST. All three are calculated on the Assessable Value (AV), which is CIF × 1.01. BCD rates range from 0% to 100%+ depending on the product. IGST is claimable as Input Tax Credit; BCD and SWS are not.
Last updated: May 2026
Table of Contents
- The Import Duty Formula: All Components Explained
- Step-by-Step Calculation: How to Do It
- Worked Example 1: Laptop (0% BCD)
- Worked Example 2: Industrial Pump (7.5% BCD)
- Worked Example 3: Furniture (20% BCD)
- Common BCD Rates by Product Category
- What IGST Can and Cannot Be Claimed Back
- Frequently Asked Questions
The Import Duty Formula: All Components Explained
Every import into India is assessed on the same base formula. Understanding each layer helps you budget accurately and avoid surprises at the customs counter. For the full landed cost including freight and local charges, see our total landed cost of an import guide. For a deeper dive into duty types, see our import duty guide for India.
AV = CIF × 1.01
BCD = AV × BCD%
SWS = BCD × 10%
IGST Base = AV + BCD + SWS
IGST = IGST Base × IGST%
Total Duty = BCD + SWS + IGST (+ ADD/CVD if applicable)
Here is what each component means:
| Duty Component | Full Name | Calculation Base | Refundable/Creditable? |
|---|---|---|---|
| BCD | Basic Customs Duty | Assessable Value (CIF × 1.01) | No |
| SWS | Social Welfare Surcharge | 10% of BCD | No |
| IGST | Integrated Goods and Services Tax | AV + BCD + SWS | Yes — Input Tax Credit for GST-registered importers |
| ADD | Antidumping Duty | CIF value (product/origin-specific) | No |
| CVD | Countervailing Duty | CIF value (subsidised goods) | No |
| Safeguard Duty | Safeguard Duty | CIF value (investigation-based) | No |
Note: The effective duty burden for a GST-registered business importing capital goods is only BCD + SWS, since IGST is fully recoverable as ITC. For a non-GST-registered importer (e.g., a hospital importing medical devices), IGST becomes a hard cost. ADD, CVD, and safeguard duty stack on top and are never refundable — read more about antidumping duties in our dedicated guide.
Step-by-Step Calculation: How to Do It
Here is the practical workflow our CHA team follows for every shipment. You can replicate this yourself, or use the Import Duty Calculator to run these steps automatically for any product.
Step 1 — Find Your HS Code
Identify the 8-digit HS code (Indian Tariff Classification) for your product. Use the CBIC tariff schedule at cbic.gov.in or the HS Code Finder tool. A single-digit error can change your duty by thousands of rupees, so always confirm with your CHA.
Step 2 — Confirm Country of Origin
The origin country determines whether antidumping duty, countervailing duty, or FTA preferential rates apply. Origin must match the Bill of Lading and Certificate of Origin. Do not assume — customs checks origin declarations strictly.
Step 3 — Determine CIF Value
CIF = Cost of goods + Insurance + Freight to the Indian port of entry. This is the base for all customs duty calculations. Use the invoice value plus actual freight and insurance. Do not guess — customs can demand proof.
Step 4 — Calculate Assessable Value (AV)
AV = CIF × 1.01 (a standard 1% loading for landing charges). AV is the official duty calculation base under Indian Customs law. If actual landing charges exceed 1%, declare the actual amount.
Step 5 — Apply Basic Customs Duty (BCD)
BCD = AV × BCD rate%. Look up the BCD rate in the CBIC Customs Tariff for your HS code. Common rates: 0% (IT products), 7.5% (capital goods), 10% (industrial), 20% (consumer goods).
Step 6 — Apply Social Welfare Surcharge (SWS)
SWS = BCD × 10%. SWS is always 10% of BCD. If BCD is zero, SWS is also zero. No exceptions.
Step 7 — Apply IGST
IGST base = AV + BCD + SWS. IGST = IGST base × IGST rate%. IGST rate matches the domestic GST rate for the product (5%, 12%, 18%, or 28%). IGST is claimable as Input Tax Credit by GST-registered importers.
Step 8 — Add Any Additional Duties
Check for antidumping duty (ADD), countervailing duty (CVD), or safeguard duty on your HS code and country of origin. These stack on top and are NOT refundable or creditable. Always check the latest CBIC notification before you ship.
Worked Example 1 — Laptop from USA (0% BCD)
Product: Business laptop (HS 8471.30)
CIF value: USD 1,200 = ₹99,600 (at ₹83/USD)
Country of origin: USA
Calculation Breakdown
Key takeaway: Laptops attract zero BCD and zero SWS. The only hard cost is IGST (18%), which is fully recoverable for GST businesses. For a non-GST importer, the full ₹18,107 is a sunk cost.
Worked Example 2 — Industrial Pump from Germany (7.5% BCD)
Product: Centrifugal pump (HS 8413.70)
CIF value: USD 5,000 = ₹4,15,000
Country of origin: Germany (no ADD)
Calculation Breakdown
Key takeaway: For a GST-registered manufacturer, the real duty cost is only ₹34,580 (8.3% of CIF) — not the full ₹1.16 lakh, because IGST is recoverable. This is why capital goods importers should always register for GST before placing orders.
Worked Example 3 — Furniture from Malaysia (20% BCD)
Product: Wooden furniture (HS 9403.60)
CIF value: ₹2,00,000
Country of origin: Malaysia (ASEAN FTA preferential rate available — but using MFN rate here for comparison)
Calculation Breakdown
FTA note: Under India-ASEAN FTA, furniture from Malaysia qualifies for 0% BCD with a Certificate of Origin (Form D). Duty saving: ₹44,440. Use the Certificate of Origin and declare ASEAN FTA at time of filing. Calculate Full Landed Cost with FTA using our landing cost calculator.
Common BCD Rates by Product Category
This table is a quick-reference guide to the most common BCD and IGST rates for products we clear daily at Bengaluru, Chennai, and JNPT. Always verify with the CBIC Customs Tariff before shipping, as rates change with every Union Budget.
| Product Category | HS Chapter | BCD Rate | IGST Rate | Notes |
|---|---|---|---|---|
| Laptops, tablets, computers | Chapter 84/85 | 0% | 18% | IT Annex products |
| Mobile phones | Chapter 85 | 0% | 12% | BIS/WPC required |
| Capital goods / machinery | Chapter 84 | 7.5% | 18% | EPCG: 0% with licence |
| Electronic components | Chapter 85 | 0–10% | 18% | Varies by product |
| Industrial chemicals | Chapter 28/29 | 7.5–10% | 18% | Check ADD |
| Steel flat products | Chapter 72 | 7.5–15% | 18% | Check ADD from China/Korea |
| Automobiles / auto parts | Chapter 87 | 15–100% | 28% | EVs: 15% (under FTA) |
| Furniture | Chapter 94 | 20% | 18% | ASEAN FTA: 0% |
| Consumer electronics | Chapter 85 | 10–20% | 18% | Varies |
| Footwear | Chapter 64 | 20–35% | 12–18% | |
| Textiles / garments | Chapter 61/62 | 20% | 5–12% | |
| Medical devices | Chapter 90 | 0–7.5% | 12% | CDSCO registration required |
| Pharmaceutical APIs | Chapter 29 | 0% | 12% | |
| Solar panels / cells | Chapter 85 | 40% | 12% | ALMM requirement |
Disclaimer: BCD rates are from the CBIC Customs Tariff 2025–26 and subject to change. Always verify with the official tariff schedule or consult a licensed CHA.
What IGST Can and Cannot Be Claimed Back
IGST is the most misunderstood part of import duty. It is not an import tax — it is the same GST you would pay on a domestic purchase, collected at the border by customs. That distinction is what makes it creditable.
Who CAN claim IGST as ITC
GST-registered businesses importing goods for business use — manufacturing, trading, or services. The IGST paid at customs appears automatically in GSTR-2B as Input Tax Credit. No separate application is needed. You simply offset it against your output GST liability in your next return.
Who CANNOT claim IGST as ITC
Individuals, non-GST-registered importers, businesses importing for exempt supplies, and hospitals importing medical devices (under certain conditions). For these importers, IGST is a hard cost — exactly like BCD and SWS — and increases the real landed cost by 5% to 28% depending on the product.
How to claim
IGST paid at customs appears automatically in GSTR-2B as ITC. No separate application needed. Match the ICEGATE payment reference with your GST registration, and the credit flows into your GST ledger.
One exception
If goods are imported under a concessional duty notification and used for non-taxable supplies, ITC may be blocked. Always read the fine print of the notification — especially for EPCG and SEZ imports.
Use the Import Duty Calculator to see the net cash impact of IGST for your specific product and GST status.
Frequently Asked Questions
How is import duty calculated in India?
Import duty in India = Basic Customs Duty (BCD) + Social Welfare Surcharge (SWS at 10% of BCD) + IGST. All are calculated on the Assessable Value (AV), which is CIF × 1.01. IGST is calculated on AV + BCD + SWS combined. Example: CIF ₹1,00,000 → AV ₹1,01,000 → BCD 7.5% = ₹7,575 → SWS ₹758 → IGST 18% on ₹1,09,333 = ₹19,680 → total duty ₹28,013.
What is Assessable Value in Indian customs?
Assessable Value (AV) in Indian customs is CIF value multiplied by 1.01 — a standard 1% loading for landing charges. It is the official base on which Basic Customs Duty is calculated under the Customs Valuation Rules 2007. If actual landing charges are higher than 1%, the importer can declare the actual amount, but 1% is the default accepted by customs.
Is IGST on imports refundable in India?
Yes — for GST-registered importers using goods for taxable supplies. IGST paid at customs is automatically reflected in GSTR-2B as Input Tax Credit (ITC) and can be offset against GST output liability. Non-GST-registered importers (individuals, exempt businesses, certain hospitals) cannot claim ITC and IGST becomes a hard cost.
What is Social Welfare Surcharge on imports?
Social Welfare Surcharge (SWS) is 10% of the Basic Customs Duty on imports. It was introduced in the Union Budget 2018–19 to fund social welfare schemes. If BCD is zero (e.g., for IT products, mobile phones), SWS is also zero. SWS is included in the Customs duty calculation and is not refundable or creditable.
What is the import duty on laptops in India?
Laptops imported to India attract 0% Basic Customs Duty and 0% Social Welfare Surcharge. Only IGST at 18% is payable, calculated on the Assessable Value (CIF × 1.01). For a laptop costing USD 1,000 CIF (≈ ₹83,000), total duty is approximately ₹15,100 (18.2% of CIF). IGST is fully claimable as ITC by GST-registered businesses.
How do I find the correct import duty rate for my product?
Three steps: (1) Find the 8-digit HS code for your product using the CBIC Customs Tariff at cbic.gov.in or our HS Code Finder. (2) Look up the BCD rate in the Basic Customs Duty column of the tariff schedule. (3) Check CBIC notifications for antidumping duty, countervailing duty, or safeguard duty on your HS code and origin country. A licensed CHA can confirm the applicable rate before you import.
What is the difference between BCD and IGST on imports?
BCD (Basic Customs Duty) is a pure import tax — not refundable, not creditable, permanent cost. IGST is a consumption tax at the import stage — identical to domestic GST but collected by customs. IGST is fully claimable as Input Tax Credit by GST-registered importers who use the goods for taxable business purposes. The net cost for a GST business is only BCD + SWS; IGST is a cash flow item, not a real cost.