Rates of Customs Duty
Whenever an individual or a business entity imports some goods in India, they have to pay a certain amount of duty and some additional taxes. The value of goods on which the rate of duty is applicable is based on the total cost of imported goods, cost of insurance, and cost of freight. These elements together constitute the shipping value.
Apart from the duty, other taxes are also applicable to import goods. These taxes include lading charges, countervailing duty, true countervailing duty, education cess, etc. The duty rates in India range from 0% to 150%. No sales tax is applicable for imported items in India.
The rates of taxes are as follows:
- Lading charges – 1% CIF (Cost, Insurance, and Freight)
- Basic Duty on the assessable value
- Countervailing duty (CVD) – 0%, 6% or 12% on the Assessable value + basic duty. CESS (Education + Higher Education) – 3% (Duty + Countervailing duty)
- Additional CVD: 4% on (Assessable value+ all duties + CESS)
As mentioned earlier, the Tariff Schedule is divided into 21 sections and 98 chapters and each chapter contains a list of items with the rate of duty applicable. Let us have a brief look at the first schedule and the chapters that are included in it.
The classification as given in the first schedule of Customs Tariff Act, 1975 is as follows:
SECTION-I: Live animals; animal products
Chapter 1: Live Animals
Chapter 2: Meat and edible meat offal
Chapter 3: Fish and crustaceans, molluscs and other aquatic invertebrates
Chapter 4: Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included
Chapter 5: Products of animal origin, not elsewhere specified or included
SECTION-II: Vegetable products
Chapter 6: Live trees and other plants; bulbs, roots and the like; cut flowers & ornamental foliage
Chapter 7: Edible vegetables and certain roots and tubers
Chapter 8: Edible fruit and nuts; peel of citrus fruit or melons
Chapter 9: Coffee, tea, mate and spices
Chapter 10: Cereals
Chapter 11: Products of the milling industry; malt; starches; inulin; wheat gluten
Chapter 12: Oil seeds and oleaginous fruits, miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder
Chapter 13: Lac; gums; resins and other vegetable saps and extracts
Chapter 14: Vegetable plaiting materials; vegetable products, not elsewhere specified or included
SECTION-III: Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes.
Chapter 15: Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes
SECTION-IV: Prepared foodstuffs; beverages and vinegar; tobacco and manufactured tobacco substitutes
Chapter 16: Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates
Chapter 17: Sugar and sugar confectionery.
Chapter 18: Cocoa and cocoa preparations
Chapter 19: Preparations of cereals, flour, starch or milk; pastrycooks’ products
Chapter 20: Preparations of vegetables, fruit, nuts or other parts of plants.
Chapter 21: Miscellaneous edible preparations
Chapter 22: Beverages, vinegar and spirits
Chapter 23: Residues and wastes from the food industries; prepared animal fodder
Chapter 24: Tobacco and manufactured tobacco substitutes
SECTION-V: Mineral products
Chapter 25: Salt; sulphur; earths and stone; plastering materials, lime and cement
Chapter 26: Ores, slag and ash
Chapter 27: Mineral fuels, mineral oils and products of their distillation; bituminous substances, mineral waxes
SECTION-VI: Products of the chemical or allied industries
Chapter 28: Inorganic chemicals; organic or inorganic compounds of precious metals, of rare earth metals, of radioactive elements or of isotopes
Chapter 29: Organic chemicals
Chapter 30: Pharmaceutical products
Chapter 31: Fertilizers
Chapter 32: Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks
Chapter 33: Essential oils and resinoids; perfumery, cosmetics or toilet preparations
Chapter 34: Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, dental waxes and dental preparations with a basis of plaster
Chapter 35: Aluminoidal substances; modified starches; glues; enzymes
Chapter 36: Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations
Chapter 37: Photographic or cinematographic goods
Chapter 38: Miscellaneous chemical products
SECTION-VII: Plastics and articles thereof, rubber and articles thereof
Chapter 39: Plastics and articles thereof
Chapter 40: Rubber and articles thereof
SECTION-VIII: Raw hides and skins, leather, fur skins and articles thereof; saddler and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk – worm gut)
Chapter 41: Raw Hides and Skins (other than Furskins) and Leather
Chapter 42: Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut)
Chapter 43: Furskins and artificial fur; manufacturers thereof
SECTION-IX: Wood and articles of wood; wood charcoal; cork and articles of cork; manufactures of straw, of esparto or of other plaiting materials; basket ware and wickerwork
Chapter 44: Wood and articles of wood, wood charcoal
Chapter 45: Cork and articles of cork
Chapter 46: Manufactures of straw, of esparto or of other plaiting materials; Basket-ware and wickerwork
SECTION-X: Pulp of wood or of other fibrouscellulosic material; recovered (wasteandscrap) paper or paper- board; paper and paper-board and articles thereof
Chapter 47: Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard
Chapter 48: Paper and paperboard; articles of paper pulp, of paper or of paperboard
Chapter 49: Printed books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans
SECTION-XI: Textiles and textile articles
Chapter 50: Silk
Chapter 51: Wool, fine or coarse animal hair; horsehair yarn and woven fabric
Chapter 52: Cotton
Chapter 53: Other vegetable textile fibres; paper yarn and woven fabrics of paper yarns
Chapter 54: Man-made filaments; strip the like of man-made textile materials
Chapter 55: Man-made staple fibres
Chapter 56: Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof
Chapter 57: Carpets and other textile floor coverings
Chapter 58: Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery
Chapter 59: Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use
Chapter 60: Knitted or crocheted fabrics
Chapter 61: Articles of apparel and clothing accessories, knitted or crocheted
Chapter 62: Articles of apparel and clothing accessories, not knitted or crocheted
Chapter 63: Other made up textile articles, sets, worn clothing and worn textile articles; rags
SECTION-XII: Footwear, headgear, umbrellas, sun umbrellas, walkingsticks, seat-sticks, whips, riding – crops and parts thereof, prepared feathers and articles made therewith; artificial flowers, articles of human hair
Chapter 64: Footwear gaiters and the like; parts of such articles
Chapter 65: Headgear and parts thereof
Chapter 66: Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof
Chapter 67: Prepared feathers and down and articles made of feather or of down – artificial flowers; articles of human hair
SECTION-XIII: Articles of stone, plaster, cement, asbestos, mica or similar materials: ceramic products: glass and glassware
Chapter 68: Articles of stone, plaster, cement, asbestos, mica or similar material
Chapter 69: Ceramic products
Chapter 70: Glass and glassware
SECTION-XIV: Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof: imitation jewellery; coin
Chapter 71: Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin.
SECTION-XV: Base metals and articles of base metal
Chapter 72: Iron and steel
Chapter 73: Articles of iron or steel
Chapter 74: Copper and articles thereof
Chapter 75: Nickel and articles thereof
Chapter 76: Aluminium and articles thereof
Chapter 77: Blank
Chapter 78: Lead and articles thereof
Chapter 79: Zinc and articles thereof
Chapter 80: Tin and articles thereof
Chapter 81: Other base metals; cermets; articles thereof
Chapter 82: Tools, implements, cutlery, spoons and forks of base metal; parts thereof of base metal
Chapter 83: Miscellaneous articles of base metal
SECTION-XVI: Machinery and mechanical appliances, electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
Chapter 84: Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
Chapter 85: Electrical machinery and equipment and parts thereof; sound recorders and re-producers, television image and sound recorders and reproducers, and parts and accessories of such articles
SECTION-XVII: Vehicles, aircraft, vessels and associated transport equipment
Chapter 86: Railway or tramway locomotives, rolling-stocks and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds
Chapter 87: Vehicles other than railway or tramway rolling-stocks, and parts and accessories thereof
Chapter 88: Aircraft; spacecraft and parts thereof
Chapter 89: Ships, boats and floating structures
SECTION-XVIII: Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; clocks and watches; musical instruments; parts and accessories thereof
Chapter 90: Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof
Chapter 91: Clocks and watches and parts thereof
Chapter 92: Musical instruments; parts and accessories of such articles
SECTION-XIX: Arms and ammunition, parts and accessories thereof
Chapter 93: Arms and ammunition; parts and accessories thereof
SECTION-XX: Miscellaneous manufactured articles
Chapter 94: Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like; prefabricated buildings
Chapter 95: Toys, games and sports requisites; parts and accessories thereof
Chapter 96: Miscellaneous manufactured articles
SECTION XXI: works of art, collectors’ pieces and antiques
Chapter 97: Works of art, collectors’ pieces and antiques
Chapter 98: Project imports, Laboratory chemicals, passenger’s baggage, personal importation by air or post; ship stores
Although the list of duty rates is quite exhaustive, a part of the list is illustrated below. Figure shows how the rates are arranged in the tariff schedule (here, the use of four digit, six-digit and eight-digit codes should be noted):
