Q&A

Customs duty is levied by the central government on the import and export of goods from India. The rate of customs duty applied to imported and exported products depends on its classification under the Customs Tariff Act. (CTA). In case of exports from India, duty is levied only on a very limited list of goods. The Customs Tariff is aligned with the internationally recognized Harmonized Commodity Description and Coding System of Tariff Nomenclature promulgated by the World Customs Organization. The Indian central government has the power to exempt any specified goods from the whole or part of the customs duties.

In addition, preferential/concessional rates of customs duty are available under the various bilateral and multilateral trade agreements entered into by India. Customs duty is levied on the transaction value of the imported or exported goods. Under the Customs Act 1962, transaction value is the sole basis of valuation for the purposes of import and export. Although India has adopted general principles of valuation for goods that are in accordance with the World Trade Organization’s agreement on customs valuation, the central government has established independent Customs Valuation Rules applicable to the import and export of goods. India has no uniform rate of customs duty, thus duty applicable to any product is based on a number of components.