Customs duty: BCD, SWS, IGST and AIDC

When goods enter India, customs collects several amounts on one bill of entry. They are worked out one after another, each on a base that includes the ones before it. The starting point is the assessable value: usually the CIF value converted into rupees.

• Basic customs duty (BCD): the main duty, set for each 8-digit code in the Customs Tariff.
• Social Welfare Surcharge (SWS): worked out on the customs duty, not on the value of the goods.
• AIDC: a cess charged only on a short list of goods.
• IGST: GST on imports, worked out last, on the value plus the customs duties.
• On some goods, often only from named countries, also anti-dumping duty, countervailing duty or safeguard duty.

1. 1Assessable value (AV): the CIF value in rupees, at the customs exchange rate.
2. 2BCD = AV × the BCD rate. Most rates are a percentage; some are an amount per unit, or whichever of the two is higher.
3. 3SWS: CBIC's Circular 03/2022-Customs says SWS is 10% of the total customs duties payable, not of the value. If those duties are nil because of an exemption, SWS is nil too. Some goods are exempt from SWS.
4. 4IGST: under section 3(8) of the Customs Tariff Act, IGST is charged on AV plus BCD, SWS and any other customs duty on the goods. IGST itself is not part of that base.
5. 5Total to pay = BCD + SWS + any other customs duties + IGST.

The rate printed in the tariff is the statutory rate. Section 25 of the Customs Act lets the government lower it, wholly or partly, by an exemption notification, sometimes only if you meet conditions. Since 1 November 2025, many general exemptions sit in one notification, 45/2025-Customs, which replaced 31 older ones, including 50/2017-Customs. It sets effective rates of customs duty and IGST for many goods.

AIDC works the same way. When it began in 2021, the Budget cut BCD on most of the goods it covered so that the total stayed about the same, and a separate notification sets AIDC's effective rates.

If India has a trade agreement with the country your goods come from, a preferential rate may be lower than the normal MFN rate. Under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, you claim it in the bill of entry: you declare that the goods qualify, name the tariff notification for each item and produce a certificate of origin.

You must also hold information showing how the goods meet the agreement's rules of origin, and keep it for five years. Customs can refuse the claim without further checks if the certificate is incomplete, altered without authentication, or out of date.

IGST paid on imports is GST. A GST-registered importer can usually claim it as input tax credit: rule 36 of the CGST Rules lets you take credit on the basis of the bill of entry. BCD, SWS and AIDC are customs duties, not GST, so they stay part of your cost.

So importers who sell in India look at two numbers: the cash they must pay at the port, and the cost that stays with them after the credit.