Custom Duty vs. Import Tax in India: What’s the Difference?

The words import tax and custom duty are frequently confusing to importers in international trade.  Despite their apparent similarities, they reflect distinct facets of import taxes.  Understanding the distinction is crucial for precise cost planning and maintaining compliance with Indian import laws; it goes beyond simple words. 

Describe custom duty.  

A charge known as custom duty is applied to commodities that are imported into or exported from India.  Under the 1962 Customs Act, the Indian government charges it with the following main duties:  

• Controlling the flow of goods across borders 
• Safeguarding local industries from global competition 
• Contributing to national revenue 

There are various kinds of customs duties, such as:  

• Customs Duty Basic (BCD)  
• Duty of Countervailing (CVD)  
• Duty Against Dumping  
• Protective Obligation  

Custom Duty in India explained here — Check current rates and duty structures on Cybex Exim Solutions. 

What is Import Tax?  

Custom duty and other additional taxes levied on imported goods are included in the more general term "import tax". 

• Integrated GST (IGST)  
• Social Welfare Surcharge (SWS)  
• GST Compensation Cass (for specific items)  

In essence:  

 Import Tax = Custom Duty + Other Applicable Taxes  

 Key Differences: Custom Duty vs. Import Tax  

 

Criteria	Custom Duty	Import Tax
Definition	Tax on imports/exports	Total tax burden on imports
Includes	Only customs-related charges	Customs + IGST + Surcharge + Cass
Authority	Customs Department (CBIC)	CBIC + GST Council
Calculation Base	CIF (Cost, Insurance, Freight) value	CIF + Customs + SWS + Other applicable taxes

 

 Why Does This Matter to You?  

 Understanding the full scope of import costs helps you:  

•  Avoid financial surprises  
•  Price products correctly  
•  Stay compliant with government regulations  
•  Plan better for procurement and logistics  

 Miscalculating taxes could result in penalties or shipment delays.  

 How to Calculate Custom Duty & Import Tax Easily  

 Instead of manually going through government portals, you can use tools like Cybex.in, where you can:  

• Search using HS Codes  
• View live duty and tax rates  
• Stay up to date with trade compliance norms   

Conclusion  

Although Custom Duty is a part of Import Tax, the two are not interchangeable. Having a clear understanding of both helps you manage costs and stay compliant with Indian laws. Platforms like Cybex Exim Solutions simplify this process by offering real-time duty and tax data tailored to your product and import category.