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Are you trying to source steel from steel producers outside India? To import steel to India, companies need to pay import duty on steel. Section 17 of the Customs Act, 1962 states that an importer entering any imported goods shall self-assess the duty. This means that if you want to import steel, you will have to calculate the import duty for the products yourself.
Import duty is commonly known as customs duty. According to Customs Tariff Act 1975, customs duty rates (Tariff) are also called the ‘Indian Customs Tariff’ or ‘Tariff Schedule’.
What is the import duty on steel?
Calculating import duty on steel in India is very easy. It depends on the type of steel product that is being imported. Classification of imported goods is governed by the Customs Tariff Act, 1975 which contains two schedules. The first schedule specifies a numeric code that is based on the Harmonised Commodity Description and Coding System generally referred to as ‘Harmonised System’ or ‘HS’. The second Schedule contains a description of goods chargeable to customs duty.
Given below is an example of the two schedules that indicates the a few steel items and its codes which determines the customs duty on steel import in India.
| HS Code | Item description |
| 7205 | Import duty on granules and powders of steel |
| 7206 | Import duty on non-alloy steel in ingots and other primary forms |
| 7208 | Import duty on flat-rolled products of non-alloy steel of a width of 600 mm or more, hot-rolled, not clad, plated or coated |
| 7213 | Import duty on bars and rods, hot-rolled, in irregularly wound coils, of non-alloy steel |
There is a full list of steel products (i.e., different types of TMT steel, galvanized steel, steel coils, steel sheets, etc.) that are assigned an HS code on the CBIC website. Depending on the HS Code the customs duty varies.
How to calculate import duty?
Import duty must be paid while you submit the Bill of Entry to seek permission to receive imports from another country. Before learning how to calculate tariffs, you need to know about CIF value. CIF value or Cost Insurance Freight value is the sum of cost of shipment, freight charges and the insurance money that is to be paid to exporter. The Customs Act applies the Customs rate to the CIF value to find out total customs duty of commodities imported.
Given below is an example of how to calculate the customs duty for steel bars:
| Particulars | Custom duty rates | Amount (₹) |
| CIF Value | 50000000 | |
| Assessable Value (AV)
CIF Value + Landing charges (@1% of CIF Value) |
50500000 | |
| Basic Duty of Customs (%)
(AV x BD rate)/100 |
10% | 5050000 |
| Basic Duty Pref (%)
(AV x BD Pref rate) / 100 |
0% | 0 |
| Additional Duty of Customs (CVD) (%)
(AV + BD. Amt.) x CVD rate / 100 |
0% | 0 |
| Central Excise Education Cess (%)
(CVD Amt.) x Central Excise Edu. Cess Rate / 100 |
0%
|
0 |
| Social Welfare Surcharge
(BD Amt. + CVD Amt. + Edu. Cess. Amt.) x Custom Edu. Cess Rate / 100 |
10% | 505000 |
| Special Additional Duty of Customs(Spl.CVD) (if any) (%)
(AV + BD Amt. + CVD Amt. + Edu. Cess. Amt. + Custom Edu. Cess Amt.) x Spl. CVD Rate/ 100 |
0% | 0 |
| IGST
(AV + BD Amt. + Edu. Cess. Amt.) x IGST/ 100 |
18% | 10089900 |
| Total Customs Duty | 15644900 | |
To make it convenient to calculate import duty, even the CBIC has created a new option on their website called the Customs duty calculator.
It is easy to find the answer to how much is the import duty in India simply by finding the HS code of commodity you want to import and its CIF value. With these figures you can go to CBIC’s customs duty calculator or any other import duty calculators online to determine the total tariff. Using this method you can find import duty on stainless steel, pig iron, coking coal, etc.
India is one of the largest producers of steel in the world. It has a highly developed steel manufacturing sector that produces crude steel to value added steel products. Some of the most commonly used steel types in India are galvanised steel, stainless steel, etc. Despite such high domestic steel production, steel imports to India are rising. This is because steel made overseas is less expensive compared to domestically produced steel.
If you want to source the best steel at reasonable prices for your production facility head to Tata nexarc’s Procurement to get in touch with trusted sellers from India offering high quality steel.
Also Know: Latest Steel price in India Today
Priyanka is a seasoned content marketing professional with more than 6 years of experience crafting various forms of business and technology sector content. Her insightful writing tackles critical issues faced by small-scale manufacturing businesses. Priyanka’s clear and concise communication empowers businesses to make informed decisions and thrive in today’s dynamic business environment.
