Customs Duty
Structure and Policy Tools
Customs duty is a tax levied on goods imported into (or exported from) India under the Customs Act, 1962 and the Customs Tariff Act, 1975. The Basic Customs Duty (BCD) is the primary component; others include the Social Welfare Surcharge (SWS), Integrated GST (IGST), and the Agriculture Infrastructure Development Cess (AIDC). The government uses customs duty as both a revenue tool and an industrial policy instrument — higher duties protect domestic industry; targeted exemptions reduce input costs for manufacturing sectors.
- Governing Acts: Customs Act, 1962 (procedure); Customs Tariff Act, 1975 (duty rates)
- Components: BCD + Social Welfare Surcharge (10% of BCD) + IGST + AIDC (on select items)
- Duty inversions: When duty on raw material > duty on finished product — discourages domestic value addition; Budget 2026 aimed to eliminate such inversions
- Tariff classification: India follows the Harmonised System (HS) of nomenclature — 8-digit classification
- New tariff lines: 148 new lines across 21 chapters proposed to improve specificity
● Tracked since February 02, 2026 · last seen June 11, 2026 · updates as the daily brief publishes
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