Indian Customs regulates the import and export of goods to and from India. When travelers arrive in India or send goods from abroad, they must follow specific rules regarding customs duty and duty-free allowances. Understanding these regulations can help avoid fines, delays, or confiscation of goods.
What is Custom Duty?
Custom duty is a tax that governments impose on imported or exported goods. The government of India uses this tax to regulate trade, protect local industries, and generate revenue. They calculate the duty based on factors such as the item’s type, value, and quantity.
Types of Custom Duty in India
Here are five types of custom duty in India:
- Basic Customs Duty (BCD) is a standard tax imposed on imported goods. The rate varies depending on the product category.
- Countervailing Duty (CVD) is imposed on imported goods to equalize the price difference between domestic and imported products.
- Additional Customs Duty (ACD) is also known as a special additional duty, this is levied to counterbalance taxes like GST in India.
- Safeguard Duty is imposed on certain goods to protect domestic industries from excessive imports.
- Anti-Dumping Duty is applied when goods are imported at a lower price than their normal value, affecting local manufacturers.
How is Custom Duty Calculated?
The authorities determine customs duty based on the following factors:
- The assessable value of goods (declared price + insurance + freight)
- The Harmonized System of Nomenclature (HSN) code of the item
- The tax rate applicable to the item
- Additional levies such as cess and surcharges
Duty-Free Allowance for Travelers
Travelers arriving in India can bring certain goods without paying customs duty. The limits depend on the mode of travel and the traveler’s duration of stay abroad.
Duty-Free Allowance for International Travelers
- Passengers coming from the USA, UK, UAE, etc.
- Personal belongings such as clothes, shoes, and toiletries – No duty applicable
- Duty-free allowance of goods worth ₹50,000 (for Indian residents or foreigners of Indian origin)
- For children below 10 years – Allowance of ₹15,000
- Passengers coming from Nepal, Bhutan, Myanmar.
- Allowance of ₹15,000
- Passengers coming via Land Route.
- Allowance of ₹15,000
- Duty-Free Alcohol and Tobacco Limits
- Alcohol – 2 liters
- Cigarettes – 100 sticks
- Cigars – 25 pieces
- Tobacco – 125 grams
What Happens if You Exceed the Duty-Free Limit?
If travelers bring goods beyond the allowed limit, they must pay customs duty on the excess amount. The general customs duty rate is 35% plus an additional 10% social welfare surcharge, effectively 38.5% on excess items.
Prohibited & Restricted Items
India strictly prohibits certain items or requires special permission for their import. These include:
- Narcotic drugs and psychotropic substances
- Wildlife products (like ivory, endangered species)
- Firearms and ammunition
- Counterfeit currency
- Explosives and chemicals
- Pornographic materials
Declaration Process at Indian Airports
Indian Customs has two channels for passengers:
- Green Channel is for passengers with nothing to declare and is within the duty-free limit.
- Red Channel is for passengers carrying dutiable or prohibited goods that must be declared.
Travelers must fill out the Customs Declaration Form if they are carrying:
- Foreign currency exceeding $5,000 (or equivalent)
- Aggregate foreign currency exceeding $10,000 (cash + travelers’ cheques)
- Items over the duty-free limit
Customs Duty on Import of Goods via Courier
If you are importing goods through courier services like FedEx, DHL, or India Post, customs duty is applicable based on the item’s value.
- Gifts below ₹10,000: No duty applicable
- Commercial goods: Standard duty rates apply
- Electronic items, watches, perfumes, etc. attract higher duty rates
How to Pay Customs Duty?
Custom duty can be paid:
- At the airport: If you exceed the duty-free allowance, pay at the customs counter.
- Online: Through the ICEGATE (Indian Customs EDI Gateway) portal.
- At the post office/courier office: If goods arrive via shipping.
Tips to Avoid Customs Issues
- Always check the duty-free limits before traveling.
- Declare any expensive goods if required.
- Keep purchase receipts for valuation proof.
- Avoid bringing restricted or banned items.
- Use the Red Channel if you are unsure about duty charges.
Conclusion
Understanding Indian customs rules helps travelers and importers avoid penalties and unnecessary hassle. By staying informed about duty-free allowances and custom duty charges, one can ensure a smooth travel experience and import process.