How is customs duty calculated in India?

Total duty = BCD + Social Welfare Surcharge (10% of BCD) + IGST on (CIF + BCD + SWS). IGST rate mirrors the domestic GST rate for that HSN heading. Most manufactured goods attract 18% IGST.

What is the Social Welfare Surcharge on imports?

SWS is 10% levied on the aggregate of BCD and any other customs duties (excluding IGST and Compensation Cess). Introduced in Budget 2018 to fund social welfare schemes. No ITC allowed on SWS.

Can I claim ITC on IGST paid at import?

Yes. IGST paid at the time of import is fully available as Input Tax Credit under Section 20 of the IGST Act. BCD and SWS are not creditable and become part of the landed cost.

How can I reduce customs duty legally?

Main routes: (1) FTA/CEPA benefits — India has FTAs with ASEAN, Japan, South Korea, UAE, Mauritius. File Form B-17 for preferential duty. (2) Exemption notifications under Section 25 of Customs Act. (3) Advance Authorisation Scheme for inputs used in exports. (4) Correct HSN classification — some sub-headings attract lower BCD.

Import Duty Calculator India 2026 — BCD, IGST, SWS

Every import into India attracts a stack of levies — Basic Customs Duty, Social Welfare Surcharge, and IGST — calculated on a cascading basis. Understanding the formula prevents costly surprises at the port and helps you optimise landed cost.

The Calculation Formula

India's import duty is not a single flat rate. Three charges stack on top of each other:

Assessable Value (AV) = CIF value (Cost + Insurance + Freight) in INR at the CBIC exchange rate for the import date
Basic Customs Duty (BCD) = BCD% × AV
Social Welfare Surcharge (SWS) = 10% × BCD (not on IGST)
IGST Base = AV + BCD + SWS
IGST = IGST% × (AV + BCD + SWS)
Total duty paid at port = BCD + SWS + IGST

💡 ITC on IGST IGST paid at import is 100% creditable as Input Tax Credit under Section 20 of the IGST Act — it offsets your GST output liability. BCD and SWS become part of cost of goods (no ITC).

Interactive Calculator

🧮 Calculate Your Landed Cost

CIF Value (₹)

Basic Customs Duty (%)

IGST Rate (%)

FTA / Concessional BCD (%)

Assessable Value (CIF)—

Basic Customs Duty (BCD)—

Social Welfare Surcharge (SWS)—

IGST Base Value—

IGST Amount—

Total Duty at Port—

Effective Duty % on CIF—

Landed Cost (CIF + Duty)—

Common BCD Rates by Category (Budget 2026)

Category	HSN Chapter(s)	BCD	IGST	Note
Mobile phones	8517	20%	12%	PLI protection
Laptops / computers	8471	0%	18%	ITA bound
Lithium-ion batteries (EV)	8507.60.10	5%	18%	FAME concession
Lithium-ion batteries (other)	8507.60.00	15%	18%	—
Solar cells / panels	8541.40	40%	12%	Safeguard duty
Steel (flat products)	7208–7212	7.5–12.5%	18%	AD duty may apply
Crude petroleum	2709	0%	Nil	Excise applies domestically
Gold (bars)	7108	15%	3%	+ Agriculture Infra Cess 5%
Cotton (raw)	5201	0%	5%	—
Machinery (general)	8428–8479	7.5%	18%	EPCG eligible

⚠ Rates change annually BCD rates are amended each year via the Finance Act (Union Budget). Always verify against the current First Schedule before filing. CustomsAI's corpus is updated after each Budget notification.

FTAs That Can Reduce Your Duty

India has signed Free Trade Agreements with several major trading partners. To claim FTA preferential duty, you must present a valid Certificate of Origin (COO) and file Form B-17 with the Bill of Entry.

ASEAN–India FTA (AIFTA) — covers Thailand, Vietnam, Indonesia, Malaysia, Singapore, Philippines, Myanmar, Cambodia, Laos, Brunei. Most manufactured goods: 0–5% BCD on originating goods.
India–Japan CEPA — significant reductions on machinery, auto parts, electronics.
India–South Korea CEPA — steel, chemicals, textiles.
India–UAE CEPA (2022) — gold, aluminium, petrochemicals at 0% BCD.
India–Australia ECTA (2022) — coal, wool, copper, aluminium.
India–Mauritius CECPA — pharmaceuticals, textiles.

💡 FTA Rule of Origin Most Indian FTAs require the goods to meet a 35% Value Addition criterion in the partner country, or a Change in Tariff Classification (CTC) rule at the 4-digit heading level. Goods assembled in a third country and merely transshipped through an FTA partner don't qualify.

Duty-Free and Concessional Schemes

Advance Authorisation (AA)

Exporters can import inputs duty-free under Advance Authorisation if the inputs are used in the exported product. The scheme is governed by the Foreign Trade Policy (FTP) 2023–28. The SION (Standard Input Output Norms) defines how much input is permitted per unit of output.

EPCG (Export Promotion Capital Goods)

Import capital goods at 0% BCD (IGST applies at 5%) on a commitment to export 6× the duty saved over 6 years. Widely used in textiles, pharmaceuticals, and engineering.

SEZ Imports

Units in Special Economic Zones are treated as foreign territory. Imports into SEZ attract no customs duty. Domestic procurement into SEZ is treated as deemed export (IGST refund available).

Finding the Right HSN Code to Minimise Duty

Several products can legitimately be classified under more than one heading with different BCD rates. Using CustomsAI's classifier, you can identify the most defensible heading — not just the lowest-duty one, but one backed by CBIC circulars and CESTAT judgments. This matters if Customs challenges your classification: you need citations, not just a lower rate.

Classify First, Then Calculate Duty

Get the right HSN code, then use this calculator. Wrong code = wrong duty = demand notice.

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