How is customs duty calculated on goods imported into India?

The assessable value starts from the CIF (Cost, Insurance, Freight) value of the shipment, adjusted for certain additions like royalty or license fees connected to the imported goods where applicable. Basic Customs Duty (BCD) is then applied at the rate specified for that product's HS code under the customs tariff schedule, which can range from 0% for many raw materials and capital goods to significantly higher rates for finished consumer goods.

On top of BCD, Integrated GST (IGST) is charged on the value plus BCD, effectively taxing the import the same way a domestic sale would be taxed, and this IGST is available as input tax credit against the importer's GST liability. Certain products also attract a Social Welfare Surcharge and, for specific categories like electronics or automobiles, additional cesses. Getting the HS classification right matters more than most importers expect, since a misclassification can mean paying the wrong duty rate or facing penalties on audit — pre-shipment classification review is worth doing for any new product line.