Does Custom Duty Apply to Gifts?
With a bunch of festivals right around the corner, who doesn’t wish to bombard their loved ones with some gifts? And, so do your relatives living in a foreign land. But, crossing international borders with gifts isn’t free; it comes with appropriate custom duty payment. In fact, each product is listed under a specific type of tax and is subject to charges accordingly.
In this blog, we’ll learn about why customs are important, some new updates in the rates, and how you can reduce the tax on your gifts.
What is Custom Duty Payment?
Custom duty payment is the tax imposed on goods that are transported across international borders. The amount is determined by the nature, size and weight of the goods. Plus, where the goods were made and what they are made of also decides the tax amount. These taxes are levied to safeguard the country’s economy, jobs, market, etc. Any item you bring into the country has to be reported to customs, such as gifts or souvenirs. You can visit the branch or choose to pay your custom duty online through your bank.
Objectives of Customs Duty:
- Protecting domestic industries from cheap imports.
- Encouraging the consumption of locally made goods.
- Generating government revenue through import taxation.
- Regulating trade balance.
- Ensuring the import of safe, quality goods.
Changes in Custom Duty Payment on Budget 2025
There were some major rate changes in a variety of items and types of taxes. We have listed a few of them here:
| Item | Previous Duty Rate | Revised Duty Rate |
| Mobile phones, mobile PCBAs, and chargers | 20% | Reduced to 15% BCD |
| Gold and silver | 15% | Reduced to 6% |
| Platinum | 15.40% | Reduced to 6.4% |
| Broodstock, polychaete worms, shrimp, and fish feed | 10%, 30%, and 15% respectively | Reduced to 5% BCD uniformly |
| Alkali/alkaline earth metals and 25 rare earth minerals (e.g., lithium) | 5% | Fully exempted |
| Capital goods for solar panel manufacturing | 7.5% | Fully exempted |
| Cancer drugs (e.g., Trastuzumab Deruxtecan, Osimertinib, Durvalumab) | 10% | Fully exempted |
| Ferro nickel and blister copper | 2.5% | Nil BCD |
| Ammonium nitrate | 7.5% | Increased to 10% |
Key Tips to Ensure a Smooth Gift Through Customs
From packaging to delivery, there are a lot of steps to ensure that your gift is transported to India with zero hassle:
Proper Documentation
Having detailed and proper documentation is crucial for gift transportation. This will help reduce any hassle during customs clearance. Some key documents you must include are:
- Commercial Invoice: Offer a detailed description of each gift item. Mention their price, weight, type and size.
- Sender and Receiver Details: Mention the address, contact number and other necessary information regarding both parties. This will keep the customs in the loop, and they can contact you in case of any issues.
Safe Packaging
It goes without saying that items like food, ceramic or any other perishable goods should be packed with utmost care and proper cushioning. You can use bubble wrap and sturdy boxes to protect them during transit.
Avoid Prohibited Items
Stay clear of the forbidden items list, including alcohol, perfumes, electronics, etc. Check the guidelines for the eligible items for each country to stay out of trouble.
Choose a Reliable Courier Service
Pick the most reliable service to make sure your gifts get delivered without any hassle. The authorised services can contact the customs and perform all the legal formalities, and let you handle the cheque.
The ICEGATE or the Indian Customs Electronic Gateway allows authorised individuals and firms to pay the custom duty online. This is a government portal and can help keep track of your shipping bills and other documentation. Plus, most banks are associated with this and allow you to pay online using your bank account.
Wrapping Up
Sharing gifts is an intimate tradition that is cherished by all of us Indians. But, for the safety and proper legal framework, it is necessary to pay the appropriate customs and follow the protocol. With online bank services, courier firms and ICEGATE, you can send your gift to your loved ones with just a few clicks.
https://cleartax.in/s/customs-duty-india
https://www.oddee.com/a-guide-to-shipping-gifts-to-india-customs-regulations-and-tax-implications-72276/
https://www.kotak.com/en/business/taxes/customs-duty.html
