Importing goods from China into India involves several steps to determine the total import duty. The calculation begins with the Cost, Insurance, and Freight (CIF) value of the goods. If the purchase is made on different terms like EXW (Ex Works), FOB (Free on Board), or CFR (Cost and Freight), additional expenses such as freight and insurance must be added to arrive at the CIF equivalent. The CIF value is then converted from the foreign currency to Indian Rupees (INR) using the customs exchange rate.
Next, the Basic Customs Duty (BCD) is calculated based on the Harmonized System of Nomenclature (HSN) code of the imported item. The BCD rate varies depending on the specific product. A Social Welfare Surcharge (SWS) of 10% is then applied to the BCD amount. The CIF value in INR, BCD, and SWS are then added together. Integrated Goods and Services Tax (IGST) is calculated on this sum. The total of BCD, SWS, and IGST represents the effective amount of duties payable.
Beyond these standard duties, it’s crucial to check for any additional levies that might apply. Many products from China are subject to Anti-Dumping Duty (ADD), which is imposed on specific goods, originating from a particular country and supplier, if they are being sold at unfairly low prices. Similarly, Safeguard Duty may also be applicable. Finally, importers should always research available exemption notifications to potentially reduce their duty burden. Given the complexities, consulting with a customs broker or expert is highly recommended for accurate duty calculations and compliance.