What is the import tax on tyres in India?

This elaborate blog provides information about import taxes on tires in India. However, the blog also aims to do so within a reasonable explanation of the taxes. Here are the key points and an overview of the import tax structure on tires in India.

Overview of Import Taxes on Tires in India

India imposes various import taxes on tires, categorised under the Customs Duty structure. These taxes are levied to regulate imports, safeguard domestic industries and create revenue for the government. The import tax structure for tires in India includes:

Basic Customs Duty (BCD)

BCD is the primary import duty applied to goods when they enter India. It is calculated as a percentage of the tire's customs value. As of my last knowledge update in September 2021, the BCD rate on tires typically ranged from 10% to 20%, depending on the type and nature of the tire.

Additional Customs Duty (ACD)

ACD, also known as Countervailing Duty (CVD), is levied on imported goods to counteract any subsidies or financial assistance provided by the exporting country's government. The ACD rate is usually similar to the Goods and Services Tax or GST rate applicable to the same product. As of 2021, the GST rate for tires in India was 28%, so the ACD rate for tires would also be around 28%.

Integrated Goods and Services Tax (IGST)

IGST applies to the value of the imported tire, including BCD and ACD. It is charged at the same rate as the GST applicable to domestically manufactured tires, which was 28% as of my last update.

Anti-Dumping Duty (if applicable)

In some cases, anti-dumping duties may be imposed on tire imports. These duties are designed to prevent the import of tires at prices lower than their fair market value, which could harm domestic tire manufacturers. The imposition of anti-dumping duties is dependent on investigations and recommendations by the Directorate General of Trade Remedies (DGTR) and can vary depending on the specific circumstances.

Safeguard Duty (if applicable)

Safeguard duties are temporary measures imposed to protect domestic industries from a sudden import surge that could cause injury. These duties are also determined through investigations by the DGTR.

Exemptions and Concessions

The government of India may offer certain exemptions or concessions on import duties for specific types of tires, especially those used in specialised industries or essential sectors.

Please note that the rates and regulations regarding import taxes can change over time due to government policies, budget changes, and economic conditions. Therefore, it's important to check with the relevant authorities or a customs expert for the most up-to-date information on import taxes for tires in India.

Additionally, it's crucial to consider other factors that can affect the overall cost of importing tires into India, such as shipping and handling charges, customs clearance fees, and any other applicable surcharges.

In conclusion, the import tax on tires in India primarily consists of Basic Customs Duty, Additional Customs Duty (CVD), and Integrated Goods and Services Tax (IGST). The specific rates can vary based on the type of tire and any additional duties like anti-dumping or safeguard duties that may be applicable. Importers should stay informed about the latest tax rates and regulations to ensure compliance with Indian customs laws and accurately calculate the total cost of importing tires into the country.