Custom Duty India: Rules You Must Know Before Shipping to India

Customs regulations are where most people lose their sleep in the shipping process. This is one hurdle that can make or break your shipment, causing a profound impact on your business. Paying custom duty in India is not an easy process, and even a small error can cause delay or unforeseen costs.

Indian customs duty will vary depending on the value, purpose and type of item to be sent, whether it is gifts, personal belongings, or an eCommerce shipment. Being familiar with the right customs rules in India will allow you to evade fines and penalties and provide easy delivery.

Key Takeaways

Before you ship, you have to be aware of the functioning of custom duty in India and how the end charges are determined. Below are the main aspects that will assist you in planning and prevent problems with customs.

• Custom duty in India is based on the type of product, value and the nature of shipment.
• There are different Indian customs regulations on personal and commercial shipments.
• Exempts on duties are limited and situation-specific.
• Inaccurate records lead to customs fees in India.

These basics in mind, let us discuss the rules in detail.

Custom Duty India Rules for Shipping to India

In India, the Customs Act, 1962 regulates customs duty, and the implementation of customs duty is done by the Indian Customs through ports, airports and courier hubs. All imports into the country are checked in terms of duty, taxes and compliance.

Shipments made to India are assessed in terms of stated value, goods category and application. A review of the duty or inspection can be done in case your declaration is not in line with the Indian customs rules.

For Personal Shipments

In cases where you are shipping personal goods to India, the customs duty in  India is determined on behalf of the receiver, and not the sender. Individual shipments include gifts, used household goods, documents and shipments to family or friends to be used non-commercially.

As a sender, you have to properly state on the invoice the description and value of the items, as well as the purpose of shipment. Under-declarations and vague descriptions of items will raise the risk of customs checks and unnecessary customs charges in India.

On the part of the receiver, Indian customs demands KYC documents since the receiver is the legal party to clear import and pay customs duties. Personal items in India may attract customs duty after the exemption limits are exceeded, even in cases where the items are used.

Other key aspects to keep in mind:

• On second-hand goods, the duty is not usually duty-free.
• The gifts exceeding Rupees 5,000 are normally subject to customs duty.
• Clearance requires KYC documents.

For Commercial & eCommerce Shipments

The rules regarding commercial and e-commerce shipments are more strict as per custom duty India regulations, and a higher compliance rate is required. Such shipments consist of goods imported to be resold, used in business or fulfil an online order.

On the side of the sender, you will be required to give out a correct commercial invoice with proper HS codes, product value, and country of origin. Misclassification or under-evaluation may lead to re-examination and penalty provisions as per the Indian customs regulation.

The receiver is fully responsible since clearance of customs is done on behalf of the business on the side of the receiver. IGST and India customs duty have to be calculated using the value declared, and valid import credentials are required.

Some of the major duties are:

Sender: Issue commercial invoice, HS codes and proper valuation.

Receiver: Enter PAN, IEC (Importer Exporter Code) and business address as evidence.

Receiver: Pay custom duty, IGST, as well as any cess.

Since customs duty is connected with the credentials of the receiver, any lack or misdirected documents invariably lead to shipment holds.

Documents Required for Indian Customs Clearance

Proper documentation is vital to define custom duty in India and also ensure clearance speed. The lack of documents or wrong documents often leads to questions from the side of customs, and the inability to answer these questions will further complicate the issue.

Indian trade demands paperwork, which expressly states the value of the shipment, the contents and its purpose. This is applicable when dealing with both personal imports and commercial imports.

Commonly required documents are:

• Proforma Invoice or Commercial Invoice.
• Packing List
• KYC document (Aadhaar, PAN, Passport).
• IEC (for business shipments)

Proper documentation helps in avoiding time-wasting and re-evaluation.

Custom Duty India & Tax Rules

The customs dutyin  India is computed over the assessable value, which comprises the cost of goods, freight and insurance of the goods. Various rates can be applied, including Basic Customs Duty and IGST.

In case you are wondering, do I have to pay import duty on personal items? The answer is yes for most of the courier shipments. The customs duty in India is imposed even on used goods after the exemption is surpassed.

Key duty considerations:

• Gifts more than Rupees 5,000 are subject to customs duty.
• Electronics attract a higher India custom duty.
• The exemptions on courier imports are normally restricted.

Knowing these regulations will enable you to know the approximate customs charges in India.

Restricted & Prohibited Items Under Custom Duty India Rules

Not every good can be freely imported into India. There are those items that are restricted and need approvals, and some are fully banned by the Indian customs rules. This is one area in which you should have extensive knowledge before starting shipping to India.

In case restricted goods are shipped without the necessary permission from the authorities, then the customs may either seize the goods or impose penalties. This is irrespective of the value of the shipment.

Typical restricted or forbidden substances are:

• Narcotics and drugs
• Counterfeit goods
• Certain communication equipment.
• Commodities that contravene the laws or regulations of India.

Check the eligibility of your items as per the Indian customs regulations before dispatching.

Why Shipments Get Stuck in Indian Customs

Delays in shipments are common as a result of wrong declaration of value or as a result of errors in the documentation. Indian customs make thorough checks for the shipment of goods, with inconsistencies in the calculation of customs duty in India.

The other secondary reason is the absence of KYC or improper HS codes. Such problems provoke inspections and reviews. Other common reasons include:

• Declared shipment value is less than the actual shipment value.
• Lack of or misplaced documents.
• Unauthorised restricted items.
• HS code mismatches

It is possible to avoid these errors, which will guarantee quicker clearance.

How Long Does Customs Clearance Take in India?

Customs clearance in India timelines vary based on the type of shipment and the accuracy of the documentation. Clearance normally requires 1 to 5 working days.

Personal shipments can be processed more quickly if the documents are completed. Commercial shipments are delayed because of the computation of duties and the checking of compliance with a large number of goods.

Delays are also experienced when customs raises valuation or classification inquiries.

Shipping to India with No Customs Issues with iSend

With iSend, you receive professional services support for dealing with customs duty in India. The iSend is specifically useful for dropshippers or small e-commerce vendors with shipments to deliver to India.

iSend assists you in computing the correct India custom duty, drafting proper documents and avoiding typical clearance problems. This minimises time wastage and surprises. Additionally, the automation features of the software allow you to handle a large number of orders at the same time.

Even though Isend is an advanced software platform, human support will be provided throughout the process, making it easy for anyone to access the services. Check out the iSend platform and ship to India with confidence, while fulfilling all compliance with iSend.

FAQs About Custom Duty India

Do gifts attract customs duty in India?

Yes, gifts are subject to customs dutyin  India when the value stated on gifts is more than the exemption threshold. The duty is based on the value of the goods.

Is KYC mandatory for all shipments?

Yes, both personal and commercial shipments require KYC from the receiver as per Indian customs regulations.

Can customs open parcels in India?

Yes, Indian customs have the legal powers to open and inspect parcels if they are not satisfied with the declarations on the documents.

What items are not allowed to ship to India?

Prohibited items include drugs, pirated goods, and certain electronics. Checking Indian customs regulations is important before shipping.

How do I speed up customs clearance?

The best way to accelerate clearance is to make sure you provide correct invoices, correct values, and full KYC documentation. You can also speed up the process by partnering with a trusted logistics provider like iSend.

How much is customs duty in India for electronic goods?

Customer duty in India for electronics is determined by the product type and HS code. Electronics tend to attract more duty as well as IGST.