What is EDD in customs?

In customs, EDD stands for Extra Duty Deposit. It is a provisional amount collected by customs authorities when there is doubt about the declared value of imported goods. EDD acts as a temporary safeguard to protect government revenue until the correct valuation is determined. It is imposed under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

EDD is commonly levied when customs suspects undervaluation, related party transactions, or when documentation is incomplete or inconsistent with the declared value. The importer is required to deposit an additional percentage (usually 1%–5%) over and above the duty calculated on the declared value.

This deposit is not a final duty but a precautionary measure. Once customs authorities complete their verification and are satisfied with the valuation, the EDD is either refunded (if the value is accepted) or adjusted against any additional duty payable (if the value is increased).

EDD helps ensure fair trade practices, discourages misdeclaration, and maintains compliance with WTO Customs Valuation norms. It provides the customs department time to investigate without delaying clearance of goods unduly.