Rules regarding Import of Cars/ Vehicles in India
Indian nationals coming to India
for permanent settlement:
- Import of one passenger car with engine size not
exceeding four cylinders and not exceeding 1600
c.c. is permitted, whether the car is new or old.
However, if engine size exceeds four cylinders or
1600 c.c., the car should have been in the use of
the importer for more than a year prior to his
return to India
- The importer has stayed abroad continuously for
a period of at least two years prior to his coming
to India for permanent settlement.
- The payment for the car is made abroad before
his return to India. Custom duty can be paid
- The car should be imported into India within six
months of the arrival of the importer in India for
permanent settlement.
- If the importer transfers his residence out of
India again, he will be entitled to import another
car under the policy only after a minimum period
of five years from the date of importation of the
previous vehicle. Customs authorities shall
endorse on the passport of the importer "
Transfer of residence with car" at the time
of clearance of the car.
- The importer is free to sell the car in the open
market after his return to India without any
restriction as regards the period of retention of
the vehicle.
- Import of one two-wheeler in place of car is
also permitted whether the same is new or old
subject to fulfillment of the above conditions.
- Import of any other type of automobile vehicle
may be permitted by the Director General of
Foreign trade,on merits.
- On the import of the vehicle, it should be
registered in the name of the importer.
Payment of Custom
Duty in free foreign exchange for Import of cars and
vehicles
In case of Indian nationals or
foreign nationals of Indian origin returning to India
for permanent settlement or foreign born wives of
Indian nationals bringing vehicles into India, custom
duty can be paid in rupees derived by sale of foreign
exchange or by debit to their NRE/FCNR accounts held
in India or out of the funds held in their RFC
account. In such cases, the authorized dealers will
have to issue a certificate to that effect for
submission to the Customs authorities. It will also be
in order for the authorized dealers to open and
maintain special non-convertible accounts in the name
of the above categories of persons with funds derived
either by remittances from abroad or by debit to their
NRE/FCNR/RFC account in India for the purpose of
paying custom duty. The certificates issued by
authorized dealers should, however, bear a clear
superscription that the same have been issued for
submission to the customs authorities for payment of
custom duty, after assessment thereof.
Import Duty on Motor Cars
Motor cars, Motor cycles and
scooters whether new or old imported into India are
chargeable to duty under Tariff Headings 87.03 and
87.11 on the basis of their list price prevailing in
the country of the their manufacture on the date on
which a bill of entry is presented. However, trade
discount and depreciation on the value are deductible
from the price list but freight from the country of
manufacture and insurance charges are added. The
landing charges are also added to this to arrive at
the final assessable value.
Freight is calculated from the
country of manufacture to the first port of landing in
India. It is worked out on the basis of rate fixed on
the volume of the car normally supplied by the
Shipping Corporation of India. Insurance is normally
1.125% of the F.O.B. value. Landing cost is 1% of
C.I.F. value. Cess is to be taken @ 1/8% as valorem or
0.125% under the IDR Act, 1951.
CUSTOMS DUTY RATE W.E.F.
13.6.1998
|
Vehicle
|
Basic Duty
|
Special. Duty
|
Additional Duty
|
Sp. Additional Duty
|
Total Duty ad valorem
|
|
Saloon Car
|
40%
|
5%
|
40%
|
4%
|
111.12%
|
|
Motor Cycle/Scooters/Mopeds
of engine capacity not exceeding 75 CC
|
40%
|
5%
|
15%
|
4%
|
73.42%
|
|
Motor Cycle/Scooters/Mopeds
of engine capacity exceeding 75 CC
|
40%
|
5%
|
25%
|
4%
|
88.5%
|
How to calculate Additional Duty
and Special additional Duty
Additional Duty (AD) is calculated
as a percentage of the aggregate of CIF value plus
basic duty and special duty.
Special Additional Duty is
calculated as a percentage of the aggregate of CIF
value plus basic duty, special duty and CVD.
Value for standard accessories
fitted in cars will form part of the assessable value
of the car. Extra accessories, air-conditioners, radio
etc are chargeable to further duty.
The rate of exchange would be as on
the date on which bill of entry for clearance is
presented to the Customs and not one at the time of
paying the price of car in foreign country.
Depreciation
Depreciation for second hand or
used cars is allowed at the prescribed scale. Extent
of depreciation is counted from the date of
registration thereof to the date of actual shipment of
the vehicle or the date of departure of the owner from
the foreign country, whichever is earlier.
In order to avoid possible disputes
on the allowability of depreciation on motor vehicles
which are more than 4 years old, the Board has revised
the scale of depreciation w.e.f. 26.5.1993, as
under:"
- for every quarter during Ist year 4%
- for every quarter during 2nd year 3%
- for every quarter during 3rd year 2-1/2%
- for every quarter during 4th year and thereafter
2%. Subject to an overall ceiling of 70%
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