Import duty

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 April 2012 what is import duty which i have to pay to indian govt if i am importing car(4wheeler) from europe ? cost 1.5 crore

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

07 April 2012 Import of used cars in India is done by many people who either move here or come back from other countries. The Export Import Policy (EXIM) 2001, allows car imports in India- both new cars as well as pre owned cars or used cars. The import rules stipulate that the import of passenger cars / jeep / multi-utility vehicles / motorcycles / scooters / mopeds etc. are restricted items of import to India and can be allowed for importing from other countries only after obtaining an import license. However, individuals coming to India on Transfer of Residence after two years of continuous stay in a foreign country and some other persons may import used cars to India without a license provided they pay import costs in form of customs duty. Before knowing the customs regulations and various customs duties levied on used cars and other vehicles import from various countries into India, it is better to know the categories of people who can import cars to India without an import license.
Car Importers Authorized for Importing Cars Without License

The following persons are entitled for car import in India for non commercial use, on payment of stipulated customs duty, even if they do not have an import license
Individuals coming to India on 'Transfer of Residence' for permanent settlement after two year’s continuous stay abroad;
Resident Indians gifted with a car as an award in any international event/match/ competition;
Legal heirs/successors of deceased relatives residing abroad;
Physically disabled persons;
Companies incorporated in India having foreign equity participation;
Branches/offices of foreign firms;
Charitable/missionary institutions registered with the Ministry of Welfare and the Ministry of Home Affairs, Government of India;
Honorary Consuls of Foreign Countries on the recommendations of the Ministry of External Affairs, Government of India;
Journalists/Correspondents of foreign news agencies having accredition certificate with the Press Information Bureau, Ministry of Information and Broadcasting, Government of India.

All the above categories of car importers can import only one vehicle except two of them- the companies with foreign equity participation and branches/offices of foreign firms- who can import maximum of three vehicles. Physically disabled persons can import only specially designed vehicles suitable for use by disabled. All such vehicle/ car imported are not eligible to be sold for two years. This 'No Sale' condition for 2 years is endorsed by the Customs Authorities on the passport/registration documents at the time of import and by the Regional Transport Authorities when such vehicles are presented for registration in India. All such car imports, except done by the physically disabled persons, shall not involve any foreign exchange remittance from India directly or indirectly. The DGFT may, however, permit relaxation of these conditions or imports by any other category not listed in this Public Notice in special circumstances.

Rules for Importing Second Hand Cars/ Vehicles

The restrictions imposed and conditions placed on import of cars for commercial purposes do not apply in the case of passengers bringing their self used car on Transfer of Residence. However, these car imports should fulfill the following conditions:
The used car or vehicle should have right hand steering and controls (applicable on vehicles other than 2 and 3 wheelers).
Autos with capacity of more than 1600cc should have been owned and used by the importer overseas at least for one year. New or second hand cars with less than 1600cc can be bought prior to arrival.
CIF value of imported cars / vehicles should be calculated for customs duty. CIF stands for Cost of the goods; Insurance; and Freight. Cost in case of new vehicles is the transaction value between the seller and the buyer. In case of old and used vehicles, the cost is calculated by taking the value of the vehicle in the year of manufacture after allowing depreciation at following rate.
Customs Valuation of Used Cars

The value of any car has to be determined for purpose of customs duties. Customs valuation in import duty on cars is determined in the following manner:
Manufacturer's invoice value is accepted wherever such invoice is produced.
When no such invoice is made available, the value is determined according to the world car catalogues available with the department or on the basis of manufacturer's price list, wherever available.
Whenever the value is taken on the basis of World car catalogs, normal trade discounts are allowed to be deducted.
Value of a second hand car is arrived at in the above manner after allowing the deductions for depreciation explained in the table above, subject to maximum of 70%.
Total effective customs duty works out to 101.91%, which includes 35% basic customs duty; 10% surcharge on customs duty; 16% additional duty; 24% special excise duty; 0.125% motor vehicle cess; and 4% special additional duty of customs.
Customs duty payable on cars (in case of completely built unit or CBU) is approximately 111% of the value assessed. It includes 60% on CBU imports plus countervailing duties and other levies. In case of “completely knocked down” or CKD car models which are assembled in country, the custom import tax is only 38 to 48% depending on engine displacement based on EXIM policy and rules framed under it.

Message likes : 1 times