Estimate only. Indian Customs assesses on the Bill of Entry using the CBIC exchange rate, and some rates here (the 60% band at or below US$40,000, EV bands and the 1% landing charge) should be confirmed with a customs broker before you commit.
Freight defaults to 20% of FOB if left blank
Insurance defaults to 1.125% of FOB if left blank
Customs uses the CBIC-notified rate, which differs slightly from this market rate
IGST slab depends on length and engine: petrol/hybrid up to 1,200 cc or diesel up to 1,500 cc and under 4 m get 18%; everything else 40%.
Estimate only. Final assessment is made by Indian Customs on the Bill of Entry.
Duties stack in a fixed order: Basic Customs Duty (BCD) and AIDC apply to assessable value, then IGST applies to value plus those duties. The Social Welfare Surcharge no longer applies to passenger cars of heading 8703.
BCD
60–70%
of assessable value, by band
AIDC
40–67.5%
top-band new and used cars
IGST
5 / 18 / 40%
of value + BCD + AIDC
Cess
Nil
compensation cess ended 22 Sep 2025
Take a new 2.0-litre petrol SUV, over US$40,000, with an assessable value of ₹50,00,000 (landing charge switched off for simplicity).
BCD at 70% is ₹35,00,000 and AIDC at 40% is ₹20,00,000. IGST at 40% applies to ₹1,05,00,000 (value + BCD + AIDC), which is ₹42,00,000. Total duty and tax is ₹97,00,000, so the duty-paid landed cost is ₹1,47,00,000, an effective rate of 194% on the assessable value.
New: must be built outside India, unregistered and imported from the country of manufacture. Top band is 70% BCD plus 40% AIDC; cars at or below US$40,000 with smaller engines are in the lower band.
Used: 70% BCD plus 67.5% AIDC (about 137.5%), no more than three years old, right-hand drive. Transfer of Residence importers need two years abroad, import within six months of arrival and cannot sell for two years.
State road tax varies widely, so it is an optional manual input. Anti-dumping or other special duties, the India–EU deal and quota rates beyond UK year one are not modelled. Valuation disputes can raise the assessed value above the invoice.
Customs starts with the assessable value, which is the CIF value: the price of the car plus freight and insurance to the Indian port. If you only know the free-on-board price, customs adds freight and insurance, and where actual figures are missing it applies notional charges. Many assessments also add a 1% landing charge, although sources disagree on whether that is applied in every case, so the calculator lets you switch it off.
Basic Customs Duty is calculated on the assessable value. The Agriculture Infrastructure and Development Cess, introduced in the 2025 Budget for top-band cars, is charged on the same base. Only then is IGST calculated, on assessable value plus BCD plus AIDC. Because tax is charged on tax, a large SUV can end up paying roughly twice its assessable value in duties.
The Social Welfare Surcharge used to add 10% of the duty, but it has been exempted for passenger cars of heading 8703, and the GST compensation cess ended on 22 September 2025. That is why the stack in this calculator has only three lines: BCD, AIDC and IGST.
From 22 September 2025 India replaced the old 28% rate plus cess with simpler slabs. Petrol and petrol-hybrid cars up to 1,200 cc and diesel cars up to 1,500 cc that are under four metres long are charged 18%. Larger cars and SUVs are charged 40%. Electric vehicles are charged 5%.
Length and engine size must both be met for the 18% slab, so a 1,000 cc car longer than four metres still pays 40%. Be wary of older articles that quote 28% plus up to 22% cess; they describe the system before the reform.
The India–UK Comprehensive Economic and Trade Agreement came into force on 15 July 2026. For UK-origin cars it creates a tariff-rate quota: within the quota, a large petrol car over 3,000 cc or diesel car over 2,500 cc pays about 30% customs duty in the first year instead of roughly 110%, falling toward 10% over time. Imports above the quota pay the normal rate, and the quota must be applied for through DGFT.
The first allocation, announced in September 2026, approved only a small number of cars, so treat the concessional rate as scarce. A deal with the European Union announced in January 2026 points to a similar quota structure, but it is not modelled here because it has not been confirmed as in force.
For a new fully built car priced above US$40,000 CIF, or with an engine above 3,000 cc petrol or 2,500 cc diesel, customs duty is 70% BCD plus 40% AIDC, about 110% of assessable value, before IGST. IGST (40% for large cars) is charged on value plus those duties. The total typically lands near 190% of the assessable value for a large SUV.
From 2 February 2025, BCD on the top band was cut from 125% (or 100%) to 70%, the 10% Social Welfare Surcharge was exempted, and a 40% Agriculture Infrastructure and Development Cess was added. For new luxury cars the headline BCD fell but the effective customs duty stayed about 110%. Second-hand cars moved to 70% BCD plus 67.5% AIDC, about 137.5%.
Since 22 September 2025 there is no compensation cess on cars. IGST is 18% for petrol or petrol-hybrid cars up to 1,200 cc and diesel up to 1,500 cc that are under 4 metres long, 40% for larger cars and SUVs, and 5% for electric vehicles. IGST is charged on assessable value plus BCD and AIDC. Many older blog posts still show 28% plus cess, which is outdated.
Used cars are tightly restricted. They must generally be no more than three years from the date of manufacture, right-hand drive with a speedometer in kilometres, and meet Indian motor-vehicle rules. Individuals returning to settle (Transfer of Residence) can bring one car under special conditions, including a two-year no-sale period, but still pay full customs duty. Check the current DGFT policy before shipping.
The India–UK CETA came into force on 15 July 2026. UK-origin cars get a concessional duty only inside a yearly tariff-rate quota that must be applied for through DGFT. In year one, petrol cars over 3,000 cc and diesel over 2,500 cc fall from about 110% to 30% duty within the quota, with rates falling toward 10% over time. Imports above the quota pay the normal rate. The first allocation in September 2026 covered just 642 cars.
A deal announced in January 2026 would lower duty on EU-made cars above roughly €15,000 to about 40% initially, falling toward 10% under an annual quota. This calculator does not model it because it is not confirmed to be in force.
Many customs assessments still add a 1% landing charge to CIF, but sources disagree on whether it still applies to all imports. The calculator includes a toggle so you can switch it off if your customs broker confirms it does not apply.
Reviewed by Joshua Victor, Founder. Sources: Union Budget 2025 customs notifications, CBIC GST 2.0 notifications, DGFT India–UK CETA notices. Last verified October 2026.