How Do I Calculate Duty Saved Under IGCR?

When you import goods under the IGCR (Import of Goods at Concessional Rate of Duty) Rules, 2017, you pay a reduced or zero customs duty. The “duty saved” is simply the difference between the normal duty payable and the concessional duty actually paid.

Here’s how to calculate it step by step:

Step 1: Determine the Assessable Value (AV)

This is usually the CIF value (Cost + Insurance + Freight) converted to INR.

Example:
CIF value = ₹10,00,000

Step 2: Calculate Normal Duty (Without IGCR)

Apply all applicable duties:

• Basic Customs Duty (BCD)
• SWS (Social Welfare Surcharge)
• IGST
• Any additional duties or cess

Example (Normal rates):

• BCD @10% → ₹1,00,000
• SWS @10% of BCD → ₹10,000
• Subtotal → ₹11,10,000
• IGST @18% on subtotal → ₹1,99,800
• Total Duty Without IGCR: ₹2,09,800

Step 3: Calculate Concessional Duty (Under IGCR)

If BCD is fully exempt under IGCR:

• BCD = ₹0
• SWS = ₹0
• IGST may still apply depending on exemption
• Total Concessional Duty: e.g., ₹0 or ₹1,80,000

Step 4: Calculate “Duty Saved”

Duty Saved = Normal Duty – Duty Paid Under IGCR

If full exemption applies:
₹2,09,800 – ₹0 = ₹2,09,800 saved

Why This Matters

• Duty saved helps calculate bond value
• Used to determine 5% security margin
• Important for returns and compliance

Learn more about IGCR at https://www.jparks.co/services/apply-for-igcr-clearance/