Import Process & Customs Duty

Key facts

• Import flow: order and shipment → shipping line/airline files the import manifest → bill of entry filed on ICEGATE (ideally before arrival) → assessment and duty payment → examination if selected → out of charge → delivery.
• Assessable value is the CIF value (cost + insurance + freight) converted at the customs exchange rate notified for the date.
• Duty is built up as: Basic Customs Duty (BCD) on assessable value, Social Welfare Surcharge (usually 10% of BCD), then IGST on (assessable value + BCD + SWS), plus any cess or anti-dumping duty.
• IGST paid on imports is available as input tax credit in GSTR-3B (via GSTR-2B/ICEGATE data); BCD and SWS are costs.
• Filing the bill of entry late (after the prescribed time) attracts late charges, and delays at the port lead to demurrage and detention charges.
• Duty rates depend on the 8-digit HS code (ITC-HS) and on any trade agreement; claiming FTA concessions needs a valid certificate of origin.

Common questions

How is customs duty calculated on imports?

1. Assessable value = CIF value in rupees. 2) BCD = rate × assessable value. 3) SWS = usually 10% of BCD. 4) IGST = rate × (assessable value + BCD + SWS). Add any cess or anti-dumping duty. Example: ₹1,00,000 value, 10% BCD, 18% IGST → BCD ₹10,000, SWS ₹1,000, IGST ₹19,980, total ₹30,980.

Can I claim input tax credit on import IGST?

Yes. IGST paid on the bill of entry is available as ITC once it appears in GSTR-2B (through ICEGATE data). Basic customs duty and SWS are not creditable and go into the cost of goods.

What is a bill of entry?

The customs declaration for imported goods, filed on ICEGATE by the importer or customs broker. It shows the goods, HS codes, value and duty. It can be filed in advance, before the goods arrive, to speed up clearance.

What is demurrage?

Charges by the port, terminal or shipping line when imported containers stay beyond the free period. Filing the bill of entry in advance and paying duty quickly avoids it.

Sources

• Customs Tariff Act, 1975 (basic customs duty, IGST on imports under s.3(7))