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Import duty is the tax Indian Customs charges on all goods entering India from foreign countries. It is governed by the Customs Act, 1962 and administered by the Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance.

In most cases, import duty is applied to all goods unless they qualify for a specific exemption, and is calculated on the product's CIF value, which stands for Cost, Insurance, and Freight.

For example, if a product costs Rs. 1,000 with Rs. 100 in transportation (Freight) and Rs. 50 in insurance, the assessable value becomes Rs. 1,150, and import duty is charged on this total amount.

<a></a>What Are the Types of Import Duties in India?

There are different types of import duties, such as BCD, IGST, Social Welfare Surcharge (SWS), Anti-Dumping Duty, Safeguard Duty, and Countervailing Duty. The purpose and applicability of each duty are explained below:

Note: Anti-Dumping and Safeguard duties apply only to some products and specific countries. These are temporary duties that happen only when certain conditions are met.

<a></a>What Determines Import Duty Rates in India?

Import duty rate in India is determined based on factors such as government notifications issued by the CBIC, applicable trade agreements, the importing country’s origin, and product classification under the Customs Tariff system.

Import duty is calculated by applying the applicable duties, such as BCD, IGST, and other duty rates, to the CIF value of imported goods. Assume you are importing a personal computer from China with the HSN code 84713010 and a CIF value of $500.

You can calculate the import duty by following the manual calculation steps provided below:

<a></a>How to Pay Import Duty Online via ICEGATE?

Import duty can be paid online through the ICEGATE portal by logging in and making an e-payment against the Bill of Entry.

Step 1: Go to the <a href="https://www.icegate.gov.in/">ICEGATE</a> website and click on services, then e-payment and select the top-up payment option.

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Step 2: Now, enter your credentials and log in to the website.

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Step 3: This will take you to your dashboard. From there, select Services, then e-Payment, and finally click on Duty Payment to proceed with the payment process.&nbsp;

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Step 4: Enter the required details, including the document type and any other requested information, then review the entries and click “Proceed” to continue.&nbsp;

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Step 5: This will take you to the Unpaid Challan page, where you can select the challan you want to pay and proceed with the payment.

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Step 6: You can choose to pay through net banking, NEFT/RTGS, or ECL Wallet, as per your convenience.

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Step 7: Once payment is completed, you will promptly receive a receipt. Imported goods will be released after the duty clearance process is done. However, if payment is delayed, a 15% yearly penalty rate will apply to the outstanding balance due.

Note: As of March 2026, under <a href="https://www.caalley.com/cus26/Circular-No-13-2026.pdf">CBIC Circular No. 13/2026 (dated 24 March 2026)</a>, ICEGATE now lets you pay customs duty via UPI, debit card, and credit card through its new Payment Aggregator mode, in addition to net banking and NEFT/RTGS.

<a></a>Which Import Duty Exemptions Apply Today?

Exemptions from import duty in India have strict compliance requirements. All needed documents and criteria must be met to avail this exemption. In case of failure to provide valid documentation, full duty is charged, and clearance may be delayed.

<a></a>Import Duty vs Tariff vs Import Tax: What's the Difference?

The terms import duty, tariff, and import tax are often used interchangeably because they all refer to charges imposed on imported goods. However, there are subtle differences between them. Let's define each term to better understand what they mean and how they are used.

A tariff is the schedule of rates prescribed by the government under the Customs Tariff Act, 1975. It specifies the rate of duty applicable to each category of goods according to its classification. A tariff therefore establishes the rate but does not itself represent the sum payable. A reference to a 20% tariff on a product denotes the rate set out in this schedule.

Import duty is the amount payable to customs when goods enter India. It represents the tariff rate as applied to a specific consignment and collected at the point of import. Where the applicable tariff is 20% and the goods are valued at ₹1,00,000, the import duty payable is ₹20,000.

Import tax is a collective term encompassing all charges levied on imported goods. In addition to basic customs duty, this includes the Integrated Goods and Services Tax (IGST), the Social Welfare Surcharge, and any applicable cess. It does not denote a single levy with a fixed rate, but rather the aggregate of charges imposed on an import.

The three terms describe the same framework at different stages: the tariff is the prescribed rate, the import duty is the amount levied on a given consignment, and import tax is the collective term for the full range of charges applied to imported goods.

Many businesses that import inputs, raw materials, or components also export their finished products. If your business does both, the exchange rate costs you manage on the import side apply in reverse when your overseas clients pay you. Traditional banks often apply high exchange rate markups on these incoming payments, increasing overall transaction costs. Skydo can help address this through the following features:

Through <a href="https://www.skydo.com/">Skydo</a>, businesses that export as well as import can reduce currency losses, improve transparency, and gain greater control over their international payments.

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Export duty is a tax imposed by a government on goods exported from India.

The government applies these taxes for two primary reasons: First, they function as a revenue source for the state treasury. Second, they regulate the export of specific raw materials so that the domestic supply and market prices remain stable for local factories and buyers.

Take iron ore, for example. The Indian government uses export duties as a price stabilization lever to keep enough material inside the country for local steel production. The government took a decision along these lines in August 2022 as it increased the export duty on iron ore to 50% to prioritize affordable housing projects, like<a href="https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1849949&amp;reg=48&amp;lang=2"> Pradhan Mantri Awaz Yojana Urban (PMAY-U)</a>.

Export duty rates vary based on the type of goods being sent abroad. Many manufactured items receive a full exemption to stay competitive in global markets.

Under the customs framework, every product has a specific classification called the Harmonized System Nomenclature (HSN). This 8-digit international coding system groups items by their description and use, and the<a href="https://www.skydo.com/blog/hsn-full-form-explained/"> HSN code</a> decides the exact tax rate applied at the port.

Any exporter, whether an Indian entity or an individual, must pay export duty in India. And they must complete the payment before customs clearance at the port.

However, there is a caveat. Only exporters of physical goods listed under the<a href="https://content.dgft.gov.in/Website/dgftprod/64c14faa-53ac-4387-bcf3-d355fee40bc8/Schedule%202%20-%20Export%20Policy%20New.pdf"> Second Schedule</a> of the Customs Tariff Act, 1975, must pay export duty. Goods not in the Second Schedule are duty-free at the port of origin.

Service exporters do not pay export duty. This includes sectors like IT, consulting, design, and freelance work. Instead of duties, service exporters deal with zero-rated taxation rules under the IGST Act and RBI rules for inward remittances.

<a></a>Table comparing goods and service exporters on key factors:

<a></a>What Are the Different Types of Export Duties in India?

There are three types of export duties in India: Ad valorem duty, specific duty, and compound duty.

Ad valorem duty is a flat percentage of the Free On Board (FOB) value of the exported goods. If the FOB value is ₹20,00,000 and the ad valorem rate is 10%, then the export duty is ₹2,00,000.

Specific duty relies on a fixed monetary amount charged per unit, like weight or volume, instead of the value. For example, the government might charge ₹1,000 per tonne of a specific material regardless of its value. By fixing a set tax amount per metric tonne, the government secures a predictable revenue stream and stops exporters from under-invoicing their shipments.

Compound duty is a mix of ad valorem and specific duty. An exporter might pay a 5% ad valorem rate plus a fixed ₹200 per kilogram on the same shipment.

The type of export duty applicable to a product depends on the HSN code. For example, for rough blocks of granites (HSN 2516), the ad valorem rate is 15%, while for processed granite (HSN 6802), like tiles, there is no export duty.

<a></a>Which Goods Attract Export Duty in India?

Export duty applies only to items listed in the Second Schedule; all other goods are exported duty-free. The government chooses specific goods to protect domestic supply chains and discourage bulk extraction.

<a></a>Example of goods where export duty applies:

Iron ore lumps and fines with an iron content of 58% and above face a 30% ad valorem tax. If the iron content is below 58%, the rate is 0%. Chrome ore and concentrates also face a 30% tax rate.

On May 1, 2025, the government of India imposed a uniform 20% export duty on various parboiled and GI-recognized rice varieties. The goal was to stabilize domestic availability. Similarly, to address the West Asia crisis, the government introduced export levies on petroleum products effective ‌March 27, 2026. For the fortnight starting ‌June 1, 2026, rates are set at ₹1.5 per litre for petrol, ₹13.5 per litre for diesel, and ₹9.5 per litre for aviation turbine fuel (ATF). The rates are revised every fortnight.

Standard manufactured items like cars, textiles, and processed foods are not in the Second Schedule. Software and digital services also carry a 0% rate. These items pass through customs with a zero tax rate.

You can find the exact export duty rate by checking your product HSN code in the <a href="https://upload.indiacode.nic.in/schedulefile?aid=AC_CEN_2_2_00039_197551_1554713855359&amp;rid=791">Second Schedule.</a>

Export duty is calculated by applying the rate listed in the Second Schedule of the Customs Tariff Act to your product's FOB (Free on Board) value. For an ad valorem rate, you multiply the FOB value by the duty percentage; for a specific rate, you multiply the quantity or weight by the fixed amount per unit. The FOB value is the basis, not the CIF value, so overseas freight and insurance are excluded. Follow these steps to calculate the export duty on your products:

Commodity: Iron ore (Fe content 60%) , Duty rate: 30%&nbsp; ad valorem , FOB amount: ₹15,00,000 , Duty payable: ₹15,00,000 x 30% = ₹4,50,000

Commodity: Readymade garments , Duty rate: Nil , FOB amount: ₹ 10,00,000 , Duty payable: 0

Exporting services from India? <a href="http://www.skydo.com">Skydo</a> helps you receive international payments at the best rates — with zero hidden fees.

<a></a>How To Pay Export Duty on ICEGATE?

You must pay export duty online through the<a href="https://www.icegate.gov.in/"> ICEGATE portal</a>. The e-payment gateway allows exporters to settle their dues 24/7 using authorized bank accounts.

Remember: Only after the tax is fully paid will the customs officer grant the Let Export Order (LEO) under Section 51. Without the LEO, the cargo cannot be loaded onto the outgoing vessel.

You can also use the E-Cash Ledger to create a virtual account on the ICEGATE website. This account allows exporters to deposit advance funds and instructs the customs system to deduct the exact duty amount upon shipping bill assessment.

Here are the steps to pay export duty on ICEGATE:

Visit <a href="http://icegate.gov.in">icegate.gov.in</a>

Click on Services, and then E-Payment from the drop-down list

Log in to your ICEGATE account using ICEGATE ID and password\

You will see the following screen, asking for four additional details before proceeding forward. Choose the document type as Central Excise/Service Tax, Document type as CE (Central Excise), your port location, and then your Identification number (IEC code)

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After you click Submit, you will see a list of unpaid challans

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Click on the checkbox/checkboxes to make payment for a challan(s). You can select a maximum of 10 challans at a time. After you have chosen the challan(s), click on the Confirm Challan button

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On the next screen, you will see the selected challan (s) and a Pay Now button; click on it to generate the mandate form

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You will see the total duty amount at the top. Click on your preferred mode of payment on the left side, then click the Generate Mandate Form button

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You will see the mandate form details on your screen. It will include the account number, account name, and IFSC code.&nbsp;

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Click on the Print/Save button. Based on the mandate details, you can pay export duty online or visit your nearest bank branch, and pay it offline

<a></a>Are There Exemptions or Refunds on Export Duty?

Some goods qualify for lower tax rates or full waivers under specific government notifications. These waivers are for specific industries that need to compete in difficult global markets.

Trade agreements between India and other countries can also reduce the tax on products. For example, in the <a href="https://law.asia/india-uk-ceta/">India-UK Comprehensive Economic and Trade Agreement (CETA), 2025</a>, the Indian government waived ‌the 18% export duty on Indian Original Equipment Manufacturers (OEMs) to improve the price competitiveness of Indian vehicles in the UK market. Always check the latest CBIC circulars to see if your cargo qualifies for these benefits.

Export duty is not refundable after the goods leave India. The government does not have a standard drawback system for outbound taxes like it does for imports.

Refunds apply if the goods are returned to India within one year of being sent. They also apply if the goods never left the port despite the tax having been paid. Exporters must file a refund application on the ICEGATE portal with proof of the return or short-shipment.

<a></a>What Are the Latest Export Duty Amendments in Budget 2026?

Budget 2026 did not add additional export duties to the Second Schedule. Instead, it focused on making operations easier and lowering costs for manufacturers.

Here are the latest export duty changes in Budget 2026:

<a></a>How Does Skydo Assist Indian Exporters With Cross-Border Payments?

After paying export duty, goods exporters lose money on hidden charges for receiving international payments. Service exporters do not pay export duty but risk losing as much as 5% to banks or payment platforms like PayPal.

Skydo removes hidden fees entirely. There is a flat fee system: $19 for payments under $2,000, $29 for payments between $2,000 and $10,000, and 0.3% for $10,000+.

Traditional banks do not always issue RBI-mandated compliance documents. Skydo issues an <a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide/">FIRC</a> automatically for every transaction, so keeping an audit trail of your export proceeds gets a lot easier.

You get real-time visibility of your payments as they’re settled into your bank account within 24 hours. You don’t have to call your client or bank relationship manager to get an update on the payment status.

It only takes 15-minutes to create a virtual account in USD, SGP, AUD, GBP, or EUR. If you’re an exporter, freelancer, or an Amazon global seller, Skydo is a perfect payment platform to grow your business.

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Duty drawback status shows the current stage of a duty drawback refund claim. It helps exporters track whether their claim is under processing, requires additional information, has been approved or has been credited to their bank account.

For instance, if a garment shipment from India to the USA is subject to duty drawback, the exporter can use the shipping bill number to check the duty drawback status. When the status appears as ‘drawback paid,’ it indicates that the refund amount has been successfully credited.

<a></a>Who is Eligible to Claim Duty Drawback?

The minimal eligibility criteria for handling drawback claims are:

In addition, here are the eligible goods for the duty drawback status:

Checking your duty drawback status helps you track the progress of your refund claim and identify any issues that may delay payment. It aids in the reimbursement of customs and excise taxes paid by exporters on imported or local inputs used in the production of export goods.

For exporters, the status fulfils several vital functions:

<a></a>What are the Different Types of Duty Drawback Claims?

In India, there are 3 main types of duty drawback claims. These are:

How to Check Drawback Status with Shipping Bill on ICEGATE?

Checking your drawback status with the shipping bill is important for maintaining financial transparency and ensuring your company takes advantage of the rebates it is eligible for. To check your duty drawback status on ICEGATE, follow these steps:

Go to the ICEGATE portal and login with your credentials.&nbsp;

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To access the drawback status area, select ‘Icegate Inquiry Service’ under the ‘Services’ section. Depending on the details you need, choose ‘Drawback Inquiry’, ‘Drawback Disbursement Status’ or ‘Monthwise Drawback Enquiry’ to track the status of your drawback claim.

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After selecting ‘Drawback Enquiry’, enter the relevant date range in the ‘Date From’ and ‘Date To’ fields. Next, choose the port location for which you want to check the drawback status.

Select ‘Drawback Pending Status’ to view a list of shipping bills whose duty drawback claims are still being processed during the specified period.

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Select ‘Drawback Sanctioned Status’ to see the shipping bills for which the duty drawback has already been processed and approved.

For hassle-free processing, verify that your <a href="https://www.skydo.com/blog/iec-code-full-form-importance-fees">IEC</a>, shipping bill number, and bank details are correct before submitting the enquiry.

While you track your drawback status, don’t let delays in refunds slow down your business. With <a href="https://www.skydo.com/">Skydo</a>, exporters can receive international payments faster with zero hidden forex markup, helping you keep your working capital flowing even when claims are pending.

<a></a>Meaning of Different Duty Drawback Status Messages

The ICEGATE portal displays different status messages, such as ‘EGM Not Filed’, ‘Query Raised’, and ‘Scroll Generated’. These indicate the progress of a duty drawback claim and highlight any issues that may require action.

Here is a detailed overview of some of the most common status messages and what they mean:

When checking your status, you may see ‘EGM Not Filed’ or ‘EGM Mismatch’, even though your products were shipped two weeks ago. This is one of the most common causes of delays.

Until the shipping line or airline files an accurately completed Export General Manifest (EGM), the drawback engine cannot process the claim. The solution is to compare the EGM submitted with the rotation number and container details on your Bill of Lading. The operation will end even if there is a single character discrepancy (CNTR123 vs CNTR1234).

The status ‘Query Raised’, with the remark ‘Substantiate classification under DBK Schedule’, appears when the item description in the shipping bill does not accurately match the drawback schedule description, or when the declared value appears unusually high. In such cases, the automated system or a customs officer may flag the claim for clarification.

To solve this, you must log in and provide technical documentation or a certificate from a chartered engineer attesting to the product's composition matching the stated HS Code.

Even if the bank account has not yet been credited, the status may show that a scroll has been generated. In many cases, the ‘Temporary Scroll’ or ‘Permanent Scroll’ is released by customs within 24 to 48 hours.

If the delay persists beyond this period, it may indicate a Public Financial Management System (PFMS) issue, often caused by a character-to-character mismatch between the bank account name and the IEC name.

<a></a>Common Reasons for Duty Drawback Claims Rejection

Here are the common reasons and solutions for duty drawback claims rejection:

Cause: The exporter's IEC is not connected to ICEGATE.

Solution: Use your new contact and bank information to register and validate IEC.

Cause: Customs officers either received the shipping bill at a non-EDI port or have not yet processed it.

Solution: Make sure the port is compatible with ICEGATE or wait for an EDI upgrade.

<a></a>Incorrect or Unlinked Bank Details

Cause: Your financial information and ICEGATE records do not match.

Solution: Use ICEGATE's registration module to update bank information.

Cause: An audit, a document inconsistency or a customs objection.

Solution: Either escalate by written representation or pursue it through the responsible official.

<a></a>How Skydo Helps Exporters Stay Compliance-Ready?

Managing international payments can be challenging for exporters. From unexpected charges and payment delays to repeated follow-ups and complex paperwork, every step can take up valuable time.

Thus, Skydo is built to simplify some of these challenges and make cross-border transactions smoother.

It helps exporters handle international payments with greater ease while keeping every transaction aligned with central bank guidelines. With automated documentation and a compliance-focused approach, Skydo reduces manual work and removes unnecessary complications.

This allows exporters to spend less time managing payment processes and more time building their global business.