How Indian import duty compounds
Indian import duty is not a single percentage. It is a stack in which each layer is calculated on the layers beneath it, which is why classification errors cost far more than their headline difference.
The layers, in order
Start with the assessable value: the transaction value, plus freight and insurance to the Indian port.
Basic Customs Duty is charged on that, at a rate set by the goods’ HS classification.
Social Welfare Surcharge is 10% of the BCD amount — a tax on the tax.
IGST is then charged on the assessable value plus BCD plus surcharge. It is creditable against your output GST, so it is a cash-flow cost rather than a true cost for a registered business.
On $10,000 of goods at 10% BCD and 18% IGST, the total is not $2,800. It is $2,998, because IGST sits on top of the duty and surcharge.
Why classification matters more than the rate
Two plausible headings for the same product can differ by twenty percentage points of BCD, and because IGST compounds on top, the real gap is wider still.
Getting it wrong in your favour invites reassessment, penalty and interest. Getting it wrong against yourself is money you will never notice losing.
Demurrage is the avoidable cost
Free days at the port are finite and begin on arrival, not on clearance. Every day beyond them accrues storage and container detention.
The fix is filing the Bill of Entry when the manifest appears rather than when the vessel berths. That single change is usually worth more than any duty optimisation.
What to check before you order
Confirm the HS heading and the current BCD rate. Check whether an anti-dumping or safeguard duty applies to your origin. Confirm whether a trade agreement gives you a preferential rate and what certificate of origin it requires.
Model the landed cost before committing, not after the container is on the water.
In short
- The stack is BCD, then 10% surcharge on BCD, then IGST on the total.
- Classification errors compound through every layer above them.
- Free days start on arrival — file the Bill of Entry early.
- Check anti-dumping duties and FTA preference before ordering.
Put this to use
A free Indian address takes under a minute and costs nothing until something ships.