How to Calculate Customs Duty on Imports in India: BCD, IGST, Cess Explained

Components of Import Duty in India

When you import goods into India, the total customs duty is not just one rate — it's a combination of multiple components applied in a specific sequence:

1. Assessable Value (AV) — CIF value of goods (Cost + Insurance + Freight) converted to INR
2. Basic Customs Duty (BCD) — Applied on AV, varies by HS code (0% to 150%)
3. Social Welfare Surcharge (SWS) — 10% of BCD
4. IGST — Applied on (AV + BCD + SWS), rate is 5%, 12%, 18%, or 28%
5. Compensation Cess — Only on certain goods (tobacco, luxury cars, aerated beverages)

Step-by-Step Calculation Example

Let's say you're importing electronic components worth $10,000 CIF. Exchange rate: Rs 84/USD.

1. Assessable Value = $10,000 x 84 = Rs 8,40,000
2. BCD (10%) = Rs 8,40,000 x 10% = Rs 84,000
3. SWS (10% of BCD) = Rs 84,000 x 10% = Rs 8,400
4. Value for IGST = Rs 8,40,000 + Rs 84,000 + Rs 8,400 = Rs 9,32,400
5. IGST (18%) = Rs 9,32,400 x 18% = Rs 1,67,832
6. Total Duty = BCD + SWS + IGST = Rs 84,000 + Rs 8,400 + Rs 1,67,832 = Rs 2,60,232
7. Landed Cost = Rs 8,40,000 + Rs 2,60,232 = Rs 11,00,232

Note: IGST paid on imports can be claimed as Input Tax Credit (ITC) in your GST returns, effectively making it a pass-through cost for businesses.

Where to Find BCD Rates

• Customs Tariff Schedule — Available on cbic.gov.in (Central Board of Indirect Taxes & Customs)
• ICEGATE — Online duty calculator at icegate.gov.in
• HS Code lookup tools — Including Eximly's built-in HS code database with duty rates

Special Duty Exemptions

• FTA/CEPA benefits — Reduced BCD for imports from FTA partner countries (ASEAN, UAE, Australia, etc.)
• Advance Authorization — Zero duty on inputs for export production
• EPCG — Zero duty on capital goods for exporters
• SEZ/EOU — Duty exemptions for units in Special Economic Zones or Export Oriented Units
• Notification exemptions — Various customs notifications provide conditional exemptions

Common Mistakes in Duty Calculation

• Using FOB instead of CIF — Customs assessable value is always CIF (includes insurance and freight)
• Wrong HS code — Different HS codes have vastly different BCD rates. A misclassification can cost lakhs
• Ignoring SWS — Many forget the 10% Social Welfare Surcharge on BCD
• Exchange rate — Customs uses the notified exchange rate, not the market rate. Check cbic.gov.in for the applicable rate
• Anti-dumping duty — Some goods from specific countries attract additional anti-dumping duties

How Eximly Simplifies Duty Calculation

Eximly's HS Code tool includes a built-in duty calculator — enter the CIF value and HS code, and get the complete duty breakdown (BCD, SWS, IGST, total landed cost) instantly. Our database covers 500+ commonly traded HS codes with current duty rates. Try it free for 30 days.