- Total import duty is made up of several components:
- Basic Customs Duty (BCD): The standard duty imposed on imported goods, typically based on the product’s Harmonized System (HSN) code.
- Integrated Goods and Services Tax (IGST): Applied on the value of the imported goods, including BCD and other applicable duties.
- Social Welfare Surcharge (SWS): A surcharge on BCD, typically 10%.
- Anti-dumping duty or safeguard duty (if applicable): Imposed on certain products to protect domestic industries.
- Compensation Cess (if applicable): Applied to specific goods, such as luxury or demerit items.
2. Gather the Necessary Information
To calculate import duty, you need:
- HSN Code of the product: Determines the duty rate for that particular item.
- Assessable Value (CIF): cost, insurance, and freight value of the goods, calculated as: CIF = Cost of Goods + Insurance + Freight
3. Steps to Calculate Import Dutylets break it down
- BCD = CIF × BCD?Rate?(as?per?HSN?code)
- Add Social Welfare Surcharge (SWS): SWS= BCD ×10%
- Add other applicable duties (if any): Check for anti-dumping duties or safeguard duties applicable to your product.
- Calculate IGST: IGST is applied to the total value, which includes: IGST Base Value = CIF + BCD + SWS + Other Duties IGST= (IGST?Base?Value) × IGST?Rate
4. Add Compensation Cess (if applicable): For luxury or specific items, calculate compensation cess on the IGST base value.
5. Total import duty payable: Combine all the above components: Total?Import?Duty = BCD+ SWS+ IGST+ Compensation?Cess
