To calculate import duty in India, add Basic Customs Duty (BCD) + Social Welfare Surcharge (SWS, 10% of BCD) + IGST on the cumulative value of CIF + BCD + SWS + Countervailing Duty (CVD) where applicable. The core formula is BCD + SWS + IGST + CVD. If anti-dumping duty or compensation cess applies, those go on top. Your starting point is always the CIF value (Cost + Insurance + Freight), converted to INR at the customs exchange rate CBIC notifies every fortnight.
Most importers get the formula right in theory but trip up on the sequencing. Each duty layer builds on the one before it, not on the original CIF value alone. Below is every component, the exact calculation sequence, and what changed in Budget 2026.
How do I calculate import duty in India?
Five steps, applied in this order:
Step 1: Determine the assessable value Take your CIF value (cost of goods + insurance + freight to Indian port) and convert it to INR using the exchange rate CBIC publishes every two weeks. This rate is fixed for a fortnight regardless of daily forex fluctuations. Check the latest rates at CBIC Exchange Rates.
Step 2: Calculate Basic Customs Duty (BCD) Look up your product's HS code in the First Schedule of the Customs Tariff Act, 1975. The BCD rate varies by product, anywhere from 0% to over 100%. Check whether an exemption notification applies, because the effective rate is often lower than the tariff rate.
Step 3: Calculate Social Welfare Surcharge (SWS) SWS is 10% of the BCD amount you just calculated. If BCD is ₹50,000, SWS is ₹5,000. From April 2026, SWS also applies to goods under heading 9804 (goods imported by post or courier for personal use), which was previously exempt.
Step 4: Calculate IGST IGST applies on the cumulative value: CIF + BCD + SWS. The IGST rate depends on the GST schedule for your product, either 5%, 12%, 18%, or 28%.
Step 5: Add anti-dumping duty, safeguard duty, or compensation cess (if applicable) These apply only to specific products notified by DGTR or the government. Anti-dumping duty is calculated on the CIF value. Compensation cess is calculated on CIF + BCD + SWS.
Worked example
Say you're importing electronic components worth USD 10,000 CIF, and the CBIC exchange rate is ₹90/USD.
| Step | Calculation | Amount (₹) |
|---|---|---|
| Assessable value | USD 10,000 × ₹90 | 9,00,000 |
| BCD (10%) | 9,00,000 × 10% | 90,000 |
| SWS (10% of BCD) | 90,000 × 10% | 9,000 |
| IGST (18%) | (9,00,000 + 90,000 + 9,000) × 18% | 1,79,820 |
| Total duty | 2,78,820 |
Total landed cost: ₹9,00,000 + ₹2,78,820 = ₹11,78,820.
What components make up the total import duty?
Here's every duty component, what rate it carries, and what it's calculated on:
| Duty Component | Rate / Basis | Applied On |
|---|---|---|
| Basic Customs Duty (BCD) | Varies by HS code (0%–100%+) | CIF value (assessable value) |
| Social Welfare Surcharge (SWS) | 10% of BCD | BCD amount |
| IGST | 5% / 12% / 18% / 28% per GST schedule | CIF + BCD + SWS |
| Anti-Dumping Duty | Per DGTR notification | CIF value |
| Safeguard Duty | Per government notification | CIF value |
| Compensation Cess | Per notification | CIF + BCD + SWS |
A few things to keep in mind:
• BCD is the variable that matters most. Get the HS code wrong, and every number downstream is wrong too. A product classified at 7.5% BCD versus 10% BCD on a ₹1 crore shipment means a ₹2.5 lakh difference in BCD alone, and SWS and IGST compound the gap further.
• SWS is 10% of BCD as the statutory rate. However, certain CBIC exemption notifications (such as Notification No. 11/2018-Customs and its amendments) partially or fully waive SWS on specific goods. Always check whether an exemption applies to your product.
• IGST is recoverable as input tax credit under GST, but only if you're a registered taxpayer importing for business use. For personal imports, IGST is a final cost.
How do I find the correct duty rate for my product?
This is where most errors happen. The process:
1. Identify the HS code. Every product imported into India needs a classification under the Harmonized System. India uses an 8-digit code (ITC-HS). Start with the product description and work through the General Rules of Interpretation (GRI), beginning with Rule 1, which says you classify by the terms of the headings and section notes.
1. Check the Customs Tariff Schedule. Once you have the HS code, look up the corresponding BCD rate in the First Schedule of the Customs Tariff Act. This gives you the base tariff rate.
1. Check for exemption notifications. Many products have reduced effective rates through CBIC exemption notifications. For example, certain capital goods for infrastructure projects may have a 0% or reduced BCD rate under a specific notification. The effective rate is the one you actually pay.
1. Determine the IGST rate. Cross-reference the HS code with the GST rate schedule. Most industrial goods fall under 18%, but rates vary.
1. Check for anti-dumping or safeguard duties. Search DGTR notifications for your specific product and country of origin. These change frequently.
Getting the HS code right matters more than any other step. One wrong digit can shift you from a 5% duty rate to a 25% rate, or put you in a heading that requires a BIS or FSSAI license you don't have.
What changed in Budget 2026 for import duties?
Three changes that affect duty calculations directly:
Deferred duty payment expanded. AEO (Authorized Economic Operator) Tier 2 and Tier 3 certified importers can now defer customs duty payment by 30 days from the date of Bill of Entry assessment. Previously, both Tier 2 and Tier 3 had a 15-day deferral window. Budget 2026 extended this to 30 days for both tiers. The total duty amount stays the same, but the cash flow impact is real for high-volume importers.
Advance ruling validity extended to 5 years. Customs advance rulings on classification and duty rates are now valid for 5 years, up from 3 years. This gives importers longer certainty on their HS code classification before needing to reapply.
SWS extended to heading 9804. Personal imports via post or courier (classified under heading 9804) now attract SWS from April 2026. Budget 2026 also reduced BCD on heading 9804 from 20% to 10%, bringing total duty on personal imports down from roughly 20% to about 11% of assessable value.
How can Eximoz help calculate import duties automatically?
Manual duty calculation is fine when you're doing a handful of shipments. It breaks down at volume, and the formula itself isn't the problem. The mistakes come from the inputs: a wrong HS code, an exemption notification you didn't know about, or a duty rate that changed last quarter.
Eximoz automates the full cycle. The system classifies your product to the correct HS code using shipment data and multi-model AI, then calculates total landed cost (BCD, SWS, IGST, anti-dumping duty, compensation cess) in one step. It checks for applicable exemption notifications automatically, so you're always working with the effective rate, not the base tariff rate.
Customs brokers processing hundreds of Bills of Entry a week spend hours on manual lookups and calculations that Eximoz handles in seconds. Compliance teams at manufacturers get duty estimates on new product lines without turning every new import into a research project.
Frequently Asked Questions
What is the formula for calculating customs duty in India?
Total Duty = BCD + SWS (10% of BCD) + IGST (on CIF + BCD + SWS). If anti-dumping or safeguard duties apply to your product, those are added separately based on DGTR notifications. Compensation cess, where applicable, is calculated on CIF + BCD + SWS.
What is Social Welfare Surcharge?
SWS is a 10% surcharge on the BCD amount. It applies to most imports and funds social welfare programs. From April 2026, it extends to goods imported under heading 9804 (personal imports by post or courier), which were previously exempt.
How do I find the BCD rate for my product?
Look up your product's HS code in the First Schedule of the Customs Tariff Act, 1975, available on the CBIC website. Then check current exemption notifications. The effective BCD rate after exemptions is what you actually pay at assessment.
What is the assessable value for customs duty?
Assessable value is the CIF value (Cost + Insurance + Freight) of your goods, converted to Indian Rupees at the customs exchange rate notified by CBIC. This rate is updated every two weeks and published on the CBIC exchange rates page. The assessable value is the base on which BCD is calculated.
Can I defer import duty payment?
Yes. Under the Deferred Duty Payment scheme, importers with AEO Tier 2 or Tier 3 certification can defer customs duty payment by 30 days from the date of assessment. Budget 2026 extended the deferral period from 15 days to 30 days for both AEO Tier 2 and Tier 3 importers. You still pay the same total duty; the deferral helps with cash flow on large or frequent shipments.