The process of import duty on cars in India can be complicated and costly. The government places high restrictions and difficult import duties on cars to protect the local car manufacturing industry. Eximity has detailed the rates and rules regarding car import duties and other factors regarding importation.
Cars and Import Duties in India
Import duties on cars in India are high taxes that the government places on cars that are brought into the country. Tin import duties: besides the customs, there also may be an additional GST placed on the car that goes above its already high valuation.
In India, customs duties on cars can go above 100% of valuation, as per Customs Duty Rates India 2025.
Duties on the importation of cars
There are several duties and taxes in place that combine to form the overall importation duties on cars:
- Basic Customs Duty (BCD) – 60% to 100%
- Integrated GST (IGST) – 28% in most cases
- Social Welfare Surcharge: up to 10% of customs duty
The Compensation Cess also may apply and that is determined by car type and engine
Different car types and duties
The government in India has also placed different duties on cars based on engine size and car value and condition when imported.
Key Categories:
- Cars valued below $40,000 → ~60% duty
- Cars valued above $40,000 → ~100% duty
- Completely Built Units (CBU) → Higher taxes
- Completely Knocked Down (CKD) units → Lower taxes
Key Information:
- used car import tax in india is generally higher due to stricter rules
- Because they are classified as an import duty on European cars in India, import duty on luxury cars in India have a relatively high import tax.
Key Factors Affecting Import Duty
The following are some of the key factors determining the final import duty on cars in India.
- Engine size and type
- Total (Cost + Insurance + Freight) (CIF)
- Type of car (i.e. luxury, electric, etc.)
- Country of manufacture
The import duty on European cars in India means premium cars can also be very expensive in India. The total cost can vary depending on fluctuations in currency exchange rates, which directly impact the final import value. Additionally, there can be extra charges for compliance, including regulatory approvals and certification requirements.
Restrictions on Car Imports to India
Understanding these rules is crucial for businesses involved in the Import Export Business from India. There are certain rules imposed by the government you must follow before you pay the import taxes for cars to India.
- There is a requirement for right-hand-sided vehicles
- There are certain Indian safety and emission regulations.
- Only certain ports allow for imports.
- Cars cannot be more than 3 years old.
Key Information
- There are strict regulations on the import licence.
- Homologation and roadworthiness certifications must be provided.
How to Determine Import Duty
An accurate determination of the total import duty on cars in India requires a proper understanding of all applicable components and cost factors. To estimate the total amount effectively, it is important to first determine the CIF (Cost, Insurance, and Freight) value of the vehicle, as this forms the base for duty calculation. You should also be aware of the different types of duties involved, along with additional taxes and related charges that may apply. Considering all these elements can make the calculation complex, so using a car import duty calculator india is highly recommended, as it provides a simple and reliable way to estimate the overall cost.
Importing Cars: Pros and Cons
Pros:
- Access to unique global models
- Latest innovations
- Ultimate driving pleasure
Cons:
- High import tax on cars in india
- Complicated, lengthy paperwork
- High cost of servicing/repairs
Why Eximity for Import Assistance?
Eximity specialises in services for importing cars to India for businesses and individuals. The team handles all the necessary paperwork and legal steps to facilitate the process and answers all clients’ questions regarding import duty on cars in India.
Frequently Asked Questions
1. What is the import tax on cars in India?
The car import tax in India varies from 60% to more than 100% depending on the type, specifications, and value of the car.
2. Are used cars allowed for import into India?
That’s true. However, the used car tax in India is extremely high. There are also a lot of restrictions such as the age of the car and the compliance.
3. Can import duty be avoided?
Using CKD unit classification and customs duty for imported cars in India under special trade agreements are some options for lowering the used car import tax in India, but the duty is still high.
4. How is the total cost of import determined?
To establish a total import cost, a car import duty calculator india for car import tax in India can be used. Alternatively, total import cost can best be predicted by Eximity experts.
Final Thoughts
Before bringing an import duty on cars in India, you should gather what information you can on the levels of import duties. Taxes on vehicles in India, combined with the various fees and numerous laws, make getting all the details crucial. The duties and details of the regulations will make you aware of all possible costs and help you steer clear of the surprise costs regardless of whether you are importing a vehicle of standard make or an import duty on luxury cars in India. With the help of the professionals of Eximity, you will be able to guide yourself through the process with ease.