Types of Custom Duty in India you need to consider as an online seller

New Delhi: India's economy and people are growing, making the country a more appealing place for businesses to sell their goods. The International Monetary Fund (IMF) thinks India's GDP will hit US$5 trillion by 2027. This would make it one of the most promising emerging markets for companies that want to grow.

India has trade policies, and you should know about the customs duties and papers that may be needed for your goods before you ship them there to ensure that your business follows the rules. This piece will give you an overview of the types of custom duty and taxes companies that send goods to India should know about.

Import duties and taxes levied in India

India charges customs duty on all goods that come into the country. The duty is calculated based on the type of goods being brought in. Value-added tax (VAT), excise duty, and service tax are some of the other taxes that goods have to pay to the government. Both the Customs Act 1962 and the Customs Tariff Act 1975 set the rules for these taxes in India.

Duty and tax rates on goods entering India may differ depending on the type of goods being sent there. These rates may be set or based on the value of the dispatched goods. The following types of custom duty are put on imports by the Indian government.

Basic Customs Duty

Basic Customs Duty, or BCD, is the major tax on all goods that come into the country. The amount owed is based on several factors, including the goods' place of origin and type (for example, whether they are finished goods or raw materials). 

The product's HS code is used to calculate its BCD, and how it is charged depends on several factors. For example, India could get a lower BCD rate on goods made in countries with which it has a preferential trade deal. In the same way, raw materials or goods considered necessary for manufacturing in India usually have a smaller BCD rate.

Goods and Services Tax

All goods brought into India are taxed by the Goods and Services Tax (GST) on top of the BCD. GST is a tax on the sale of goods and services based on how much they are used. What kind of goods are being brought affects the GST rate. 

In India, the goods and services tax (GST) law says that goods brought into the country are thought to be traded between states and, therefore, subject to the IGST. When things are brought into the country, the IGST rate is 5%, 12%, 18%, or 28%. Not only do goods have to pay IGST, but they also have to pay essential customs duty and cess, a duty added to the GST rate. The sum of all these taxes is the tax that must be paid on an import.

Countervailing Duty

The Countervailing Duty (CVD) is meant to be the same as the Central Excise Duty that is put on things made in the country. It is set on goods that are brought in from other countries that have lower tax rates in the place where they were made. These taxes keep prices fair between locally produced and imported goods by stopping companies from lowering prices by buying goods from countries with lower production costs. The CVD can be anywhere from 0% to 12%, based on the product type and where it comes from.

Special Additional Duty

An additional tax called the Special Additional Duty (SAD) is imposed on goods brought in from other countries to make them the same as goods made in the country. The goal of the SAD is to ensure that foreign goods don't get an unfair edge over local goods. Standard SAD is charged at a rate of 4% if it fits. Ad valorem is also used to calculate the SAD.

Anti-Dumping Duty

It is against the law for foreign goods to be sold in India for less than their actual value. Local companies often can't compete with this dumping of goods, and some even have to close. The anti-dumping duty protects local companies and industries by making imported goods more expensive and less competitive. The amount of anti-dumping duty charged varies depending on the goods brought in and where they come from.

Safeguard Duty

The Safeguard Duty is another duty similar to the anti-dumping duty. Its main goal is to help local industries. The government can impose protective duties if it thinks that more foreign goods are hurting local businesses. This tax changes based on the goods being brought in and their worth.

Social Welfare Surcharge

A 10% surcharge for social welfare is added to all customs, taxes, and cesses that are collected under Section 12 of the Customs Act, 1962. This is called the Social Welfare Surcharge (SWS). All things that come into India are subject to the SWS, which is used to pay for social welfare programs.

Why do such taxes matter for businesses?

As we already said, things brought into or sold out of India are subject to several taxes and duties. If you are starting up, it’s necessary to know about these taxes for a transparent and stress-free selling experience. Here, platforms like Amazon can be of great help as their network across 80+ countries can make selling your products across borders effortless. Modern sellers need to know not only about the taxes and fees on imported goods but also ensure they follow all the rules and laws that apply to imports. If you don't follow the rules, like not paying the customs clearance fees, you could be fined, making doing business even more expensive.

Conclusion

If you own a business or are planning to start one, there's a simple way to sell your products to customers across the globe. With international e-commerce platforms now available, it's easier than ever to showcase and sell “Made in India” goods in multiple countries through just a few streamlined steps. This kind of global selling program supports sellers with every stage of the export journey — from handling paperwork and regulatory licenses to managing logistics, payments, and advertising.

Once registered, sellers can choose to manage the shipping process themselves (commonly known as merchant-fulfilled shipping) or opt for a fulfillment service where the platform takes care of everything from packaging and delivery to customer returns. Global e-commerce selling allows businesses to simplify cross-border shipping, navigate international tax requirements, and connect with a large global customer base.