Customs Duty and GST on Imports by Sea to India (2025 Guide)

Updated: October 2025

Importing goods by sea to India is the backbone of the country’s international trade. From consumer electronics and machinery to textiles and chemicals, most imported goods enter India through major ports like Nhava Sheva (JNPT), Mundra, and Chennai. However, navigating customs duty and Goods and Services Tax (GST) on these imports can be complex. In 2025, with CBIC and ICEGATE digitalization, the process is faster and more transparent, but importers still need to understand the cost structure and compliance rules to avoid penalties or overpayment. This guide explains how customs duty and GST apply to sea imports, includes sample duty calculations, and shows how importers can streamline compliance using Cogoport’s tools.

What it is

What are Customs Duty and GST on Imports

When goods arrive in India by sea, importers must pay Customs Duty and Integrated GST (IGST) to legally clear them from the port. Customs Duty includes various components such as Basic Customs Duty (BCD), Social Welfare Surcharge (SWS), and Anti-Dumping Duty (if applicable). GST, on the other hand, is levied as IGST under the Goods and Services Tax Act on imported goods. Together, these taxes form the total import duty paid at the time of customs clearance. The importer later claims the IGST as input credit under GST, reducing their overall tax liability.

Difference between Customs Duty and GST

Customs Duty is governed by the Customs Act, 1962, while GST is regulated under the GST Act, 2017. Customs Duty applies to all goods imported into India, while GST ensures tax parity between imported and domestically produced goods. Customs Duty increases the CIF (Cost, Insurance, and Freight) value of goods, while IGST is calculated on the total of CIF + BCD + SWS. Essentially, Customs Duty is a protection tax for the economy, while IGST ensures seamless credit flow for importers.

2025 Updates and Regulations

Recent CBIC and ICEGATE changes for importers

In 2025, CBIC has enhanced ICEGATE’s automation features to simplify Bill of Entry filing and duty payment. Importers can now log into the ICEGATE portal, upload required documents digitally through e-Sanchit, and pay customs duties online through net banking or NEFT. The risk management system (RMS) also uses AI to assess low-risk consignments, reducing examination time. These upgrades make clearance faster—reducing average port dwell time by up to 15% at JNPT and Mundra.

New 2025 GST rules for imported goods

The GST Council’s 2025 update introduced simplified IGST refund rules for importers. Businesses can now claim input credit for IGST paid at customs directly via their GSTR-2B auto-populated form, provided the Bill of Entry number is correctly filed. Additionally, the CBIC has clarified that GST on ocean freight (for CIF imports) is not payable separately by the importer—removing earlier confusion from earlier rulings.

Cost Structure & Calculations

How to calculate Customs Duty (BCD + SWS + IGST)

The total import duty is calculated on the CIF value (Cost + Insurance + Freight) of goods. Basic Customs Duty is charged on the CIF, followed by Social Welfare Surcharge (10% of BCD). IGST is then applied on the cumulative amount (CIF + BCD + SWS). The formula for calculating total duty is:

Total Duty = BCD + SWS + IGST

Sample Import Calculation

Let’s assume an importer brings electronics worth ₹1,00,000 (CIF value) into India. The applicable rates are: BCD 10%, SWS 10% of BCD, and IGST 18%. Here’s how the total landed cost is calculated:

Therefore, the importer pays ₹30,980 as total taxes at clearance but can claim ₹19,980 as IGST input credit later.

Documentation & Compliance Flow

Required Documents

Importers must submit key documents including Commercial Invoice, Packing List, Bill of Lading, Bill of Entry, Importer Exporter Code (IEC), and Insurance Certificate. These documents are uploaded via e-Sanchit on ICEGATE. The Bill of Entry is then assessed by Customs electronically through the RMS system. Once verified, the importer pays the applicable duties online and receives a digital Out of Charge (OOC) message, allowing cargo release.

Role of ICEGATE and Online Duty Payment

ICEGATE (Indian Customs Electronic Gateway) serves as the single window interface for customs clearance. Importers can log in, check duty calculation, and make payments directly through authorized banks. Once the payment is successful, ICEGATE generates a Challan Identification Number (CIN) for records. Using platforms like Cogoport, importers can also track shipment status, customs assessment progress, and estimated clearance time—all on one dashboard.

GST Input Credit and Refunds

How Importers Claim IGST Input Tax Credit

The IGST paid during customs clearance can be claimed as an Input Tax Credit (ITC) under the GST Act. The amount automatically reflects in GSTR-2B after filing the Bill of Entry. Businesses can use this ITC to offset GST payable on sales or claim refunds in case of exports. Importers must ensure the GSTIN on the Bill of Entry matches the one on their GST returns to avoid rejections.

Common Mistakes that Delay Refunds

Some common issues include mismatched GSTIN, delayed filing of GSTR-3B, or incorrect declaration of HSN codes. Importers should verify all documents before submission. CBIC has also launched a centralized refund processing system in 2025, reducing refund timelines from 60 to 30 days.

Examples

Case Study: Importer of Machinery via Mundra Port

An engineering company importing machinery worth ₹10 crore through Mundra Port used Cogoport’s platform to manage customs and freight in one place. By using automated duty calculators, they ensured accurate cost estimation and timely IGST credit claims. This reduced their working capital blockage by ₹45 lakh compared to the previous year when manual filing delays caused credit mismatches.

Case Study: SME Claiming IGST Credit through GSTN

A textile SME in Surat importing dyes and chemicals faced frequent issues with IGST refunds due to documentation errors. After integrating ICEGATE with their GSTN profile and using digital documentation through Cogoport, refunds started reflecting within 25 days instead of 60. Automated reconciliation between Bill of Entry and GSTR-2B eliminated manual errors entirely.

FAQs

What is the customs duty rate for sea imports in 2025?

Customs Duty rates vary by HS code. On average, Basic Customs Duty ranges between 7.5% and 10%. You can find applicable rates using the CBIC Tariff Lookup or by using Cogoport’s duty calculator for quick estimation.

Is GST applicable on import freight charges?

No. As per CBIC’s 2025 clarification, importers are not required to pay separate GST on ocean freight for CIF imports. The IGST paid at customs includes this component.

How to pay customs duty online in India?

Importers can log into ICEGATE and pay customs duties using net banking, NEFT, or authorized banks. The system automatically updates the clearance status once payment is confirmed.

Can importers claim GST input credit on imports?

Yes. The IGST paid during import clearance is fully claimable as ITC, provided it reflects in the GSTR-2B and is reconciled properly. This helps importers reduce tax liability or claim refunds on export sales.

What is the difference between BCD and IGST?

BCD (Basic Customs Duty) is a traditional customs charge that cannot be claimed as credit, while IGST is a GST component that is credit-eligible. Both are calculated at the import stage, but only IGST contributes to GST input tax credit.

Conclusion / Next Steps

Understanding customs duty and GST on imports by sea to India is essential for managing landed costs and maintaining compliance. With 2025’s digital reforms by CBIC and ICEGATE, importers now have the tools to simplify the process. Platforms like Cogoport allow users to calculate duties, get freight quotes, and manage customs clearance all in one place—saving time and money. Whether you are an SME or a large enterprise, embracing digital customs management is key to reducing costs and staying compliant in India’s growing trade landscape.