How import duty is calculated
- Customs value. Most countries, including India, the UK and the EU, use the CIF value: goods plus freight and insurance to the port. The US, Canada and Australia use FOB.
- Basic duty. The rate for the product's tariff line, or a lower rate if a trade agreement applies and the goods qualify.
- Extra duties and surcharges. For example India's Social Welfare Surcharge, US Section 232 and 301 duties, or anti-dumping duty.
- VAT or GST. Charged on the customs value plus duty in most countries, and usually reclaimable by a registered business.
Example: importing into India
For goods with a CIF value of ₹1,00,000, a 7.5% basic customs duty and 18% IGST:
| Line | How | ₹ |
|---|---|---|
| CIF value | Goods + freight + insurance | 1,00,000 |
| Basic Customs Duty | 7.5% of CIF | 7,500 |
| Social Welfare Surcharge | 10% of BCD | 750 |
| IGST | 18% of (CIF + BCD + SWS) = 18% of 1,08,250 | 19,485 |
| Total duties and taxes | 27,735 |
Of that, the ₹19,485 IGST is usually claimable as input tax credit, so the real cost to a GST-registered importer is ₹8,250.
Common questions
How is import duty calculated?
Customs work out a customs value, usually the CIF value (goods plus freight and insurance to the port), and apply the duty rate for the product's tariff line. Some countries, including the US, Canada and Australia, use the FOB value instead. Surcharges and VAT or GST are then added, and VAT is usually charged on the value including duty.
How is import duty calculated in India?
India charges Basic Customs Duty (BCD) on the CIF value, a Social Welfare Surcharge of 10% of the BCD, and IGST on the total of CIF value, BCD and surcharge. Some goods also attract AIDC, anti-dumping or safeguard duty. Registered businesses can usually claim the IGST back as input tax credit.
Do trade agreements really make duty zero?
Often, yes. For example, under the India–UK CETA in force since 15 July 2026, most Indian goods enter the UK duty-free. The buyer must claim it with a valid proof of origin, and the goods must meet the agreement's rules of origin.
Is VAT a real cost for my buyer?
Usually not for a VAT-registered business, which reclaims import VAT. It is still cash they pay at the border, so it matters for their cash flow, and it is a real cost for consumers and unregistered buyers.
How accurate is this calculator?
It uses the same rules as Corridor Terminal: rates by product group for each lane, trade deals, extra duties such as US Section 232 and 301, and each country's surcharges, checked on the date shown. Your exact tariff line can differ, so confirm it in the official tariff before you quote.
See the whole landed cost
Duty, freight, port charges and delivery for your product and lane, turned into a quote and proforma invoice.
Open the landed cost calculatorFirst shipment guide