Custom Duty in India

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The customs duty rates of India have been changed in the 2011-12 budget in an effort to rationalize the whole structure. The rates of 2 and 3 percent have now been unified to form a median rate of 2.5%. This implies that the goods which
were subjected to a customs duty of 3 percent and 2 percent previously, will now attract a basic customs duty will be 2.5%.

Changes to Customs Duties in India

The recent changes to customs duties in India have been mentioned as below:
  • The basic customs duty for Live SPF L. Vannamei has been brought down to 10 percent from 30%.
  • For pistachios the BCD has been reduced from 30 percent to 10%.
  • The basic customs duty for sun-dried dark seedless raisin is now 30 percent. The previous rate was 100%.
  • Bamboo, being used for making agarbattis, would now have a BCD of 10 percent compared to the previous rate of 30%.
  • The new basic customs duty for lactose being used for making homeopathic medicines is 10 percent. Previously the rate was 25%.
  • In case of cranberry products the BCD has been brought down to 10 percent from 30%.
  • De-oiled rice bran cakes will now be exempted from basic customs duties but these products will attract an export duty of 10 percent.
  • Fin fish seeds have also been exempted from BCD.
  • Mineral gypsum will now have a basic customs duty of 2.5 percent compared to the previous rate of 5%.
  • The BCD for all ores and concentrates has been taken up to 2.5 percent from the previous rate of 2%.
  • Silver and gold content in copper concentrates will now be exempted from basic customs duties.
  • In case of iron ore, the export duty on both lumps and fines will attract a uniform BCD of 20 percent. This will not include the pellets that have now been exempted from customs duties.
  • As per the section 3 (5) of the Customs Tariff Act, complete exemption from additional customs duty will be given to copper dross, brass dross, copper residues, zinc ash, and copper oxide mill scale.
  • Carbon black feed stock will now attract a basic customs duty of 2.5% compared to the previous rate of 5 percent.
  • The BCD for petroleum coke has also been reduced from 5 percent to 2.5%.
  • Exemption from basic customs duty will now be provided to bio-based asphalt sealer and preservation agents, sprayer systems for bio-based asphalt, millings removers and crack fillers, asphalt removers and corrosion protectants that are used for the construction of bio-based asphalt roads.
  • The new BCD for Acrylonitrile is 2.5 percent. The previous rate was 5%.
  • The basic customs duty on Diphenylmethane 4 and 4-diisocyanate (MDI) has been brought down to 5 percent from 7.5%. However, the deduction will be provided depending on the condition of the user.
  • Caprolactam will now attract a BCD of 7.5 percent from the previous rate of 10%.
  • Crude Palm Stearin being imported for making laundry soaps will now be exempted from basic customs duty. The previous rate was 20%. The reduction will only be provided on the basis of the actual user condition.
  • The BCD for Sodium Polyacrylate will be brought down to 5 percent from 7.5%.
  • Polytetrametylene ether glycol will now attract a basic customs duty of 5 percent. The previous rate was 7.5% and the reduction will be applicable on the basis of actual user condition.
  • The BCD for nylon chips has been brought down to 7.5 percent from 10%.
  • Retreaded and pneumatic tires that are used in aircraft have a new basic customs duty of 2.5 percent. The previous rate was 3%.
  • The BCD for rayon grade wood pulp has been brought down to 2.5 percent from 5%. There has been a similar reduction in case of waste paper.
  • Exemption from basic customs duty in case of printed books will now be provided only to tariff items 4901 10 10, 49019900, and 49019100.
  • The BCD for raw silk of every grade has been brought down to 5 percent.
  • Cotton waste has been exempted from basic customs duty. Previously the rate was 10 percent.
  • The new BCD for nylon fiber is 7.5 percent while the previous rate was 10 percent.
  • Stainless steel scrap has been granted full exemption from basic customs duties.
  • BCD for Ferro-nickel has been brought down to 2.5 percent from 5%.
  • Agricultural machinery like paddy transplanters, straw or fodder balers, laser land levelers, sugarcane harvesters, cotton pickers, tracks used for making track-type combine harvesters, and reaper-cum- binders will now attract a basic customs duty of 2.5 percent compared to the previous rate of 5%. The components and parts required for making these machines will have a duty of 2.5%. The previous rate was 7.5%.
  • Tunnel boring machines that are used for highway development projects and the components and parts to be used for assembling them will now be exempted from BCD and the additional duty.
  • For laser jet and inkjet printer parts that are imported by actual manufacturers CVD/Excise duty has been brought down to 5 percent. These will also be exempted from SAD.
  • High speed machines that have a printing speed of 70 thousand copies per hour are provided concessional rates of 5% BCD, 5% excise duty/CVD and total exemption from SAD. This facility will also be provided to mailroom equipment such as overhead conveyor grippers, strappers, stackers, inserters, wrappers, delivery conveyors, and labelers that have been made specifically to be used in these machines. However, in order for the reduction to be effective the machines must be imported by a newspaper that is recognized by the Registrar of Newspapers of India.
  • Excise duty/CVD on parts of optical disc drives such as DVD writers and drives, combo drives, and CD drives will be brought down to 5 percent. They will also be exempted from SAD on the basis of actual user condition.
  • Cash dispensers and parts used to make such machines will be exempted from basic customs duty. However, in case of the latter, the exemption will be provided based on actual user condition.
  • Mobile handsets such as cellular phones are presently exempted from basic customs duty and the additional duty that is equal to excise duty. This facility will also cover components and sub-components used to make PC connectivity cables, hands-free headphones and battery chargers of mobile handsets.
  • Battery packs, AC/DC electric motors, battery chargers, and motor controllers will now be fully exempted from basic customs duty and SAD and they will be required to pay a CVD of 5 percent.
  • Spare battery packs will be provided total exemption from Special CVD and basic customs duty and see a concessional CVD rate of 5 percent. These facilities will only be provided to importers who are registered with the Indian Renewal Energy Development Agency and other State Nodal agencies that are part of the Ministry of Non-Conventional and Renewable Energy's Central Financial Assistance program.
  • Aircraft imported for non-scheduled operations will now need to pay a BCD of 2.5 percent. However, they will be exempted from SAD and CVD.
  • Aircraft that are classified under Sections 8802 20 00, 8802 40 00, and 8802 30 00 will be subjected to education cess, and secondary and higher secondary education cess.
  • Ship owners of ocean going vessels registered in India will now be provided total exemption for importing consumables and spares that are needed to repair such vessels.
  • Polypropylene, stainless steel capillary tubes, and stainless steel strips used for making syringes, catheters, needles, and cannulae will see a new BCD of 5 percent from the previous rate of 10%. There will be a similar reduction in case of CVD as well and they will be completely exempted from Special CVD.
  • There will be a full exemption of BCD in case of endovascular stents.


Last Updated on 2/13/2012

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