GST did not replace customs duty in India. A purchase shipped from abroad can attract Basic Customs Duty, Social Welfare Surcharge and import IGST. Goods carried by an arriving passenger follow separate baggage provisions.
The main updates relevant in 2026 include the revised GST structure introduced in September 2025, new passenger baggage rules from February 2026, and a reduction in the heading 9804 personal-import tariff rate from April 2026. A headline saying “customs duty reduced to 10%” does not mean your total import tax is only 10%.
Last reviewed: 12 November 2026. This guide focuses on what the changes mean for travellers, overseas shoppers and people receiving personal parcels in India.
On this page
- Key changes and effective dates
- GST rates: 5%, 18%, 40% and exemptions
- Latest GST developments and 2027 questions
- What the 10% personal-import tariff means
- Example: how 10% becomes 30.98%
- Passenger baggage versus parcels
- Gold, jewellery and electronics
- Medicines and selected customs relief
- Commercial imports and tax credit
- Checking your final import cost
- Frequently asked questions
What Changed—and When?
| Date | Development | What it means |
|---|---|---|
| 22 September 2025 | Major GST rate restructuring | A framework centred on 5% and 18%, with a special 40% rate and separate exemptions and special-rate categories. |
| 1 February 2026 | Revised treatment for specified tobacco and pan masala products | These products did not all switch rates with the initial September changes. |
| 2 February 2026 | Baggage Rules, 2026 and revised passenger procedures | Updated allowances and arrangements for declarations, laptops, jewellery and temporary carriage. |
| 1 April 2026 | Heading 9804 personal-import tariff reduced from 20% to 10% | The basic tariff changed; surcharge and import IGST still need to be considered. |
| 8 October 2026 | 57th GST Council recommendations | Primarily process reforms and classification clarifications; implementation depends on the relevant legal instruments. |
Do not treat a Budget announcement, a GST Council recommendation and an effective notification as interchangeable. The operative provision and its commencement date determine the treatment of a transaction.
What Are India’s GST Rates in 2026?
The revised framework has two main rates—5% and 18%—and a special 40% rate for selected supplies. Nil-rated and exempt supplies also exist, along with special rates for certain categories. “0%, 5%, 18% and 40%” is a convenient headline, not a complete classification guide.
The government’s 2026 GST overview describes the main structure. The major restructuring began in September 2025, rather than being an entirely new system introduced in 2026.
Has 18% GST been removed?
No. The 18% standard rate remains. Some products moved into it from higher rates, while others moved to lower rates or exemption. An individual product’s treatment depends on its classification and the applicable notification.
Which items attract 40% GST?
Examples include motorcycles with an engine capacity exceeding 350cc, specified larger cars and certain aerated, sweetened or caffeinated beverages. Product definitions matter: a price tag or a seller describing something as “luxury” does not establish the rate.
The official GST reform FAQ distinguishes motorcycles up to and including 350cc from those exceeding 350cc.
The GST Council’s December 2025 newsletter also records the February 2026 change placing specified tobacco and pan masala products at 40%, while bidis moved to 18%. Other product-specific levies may still matter.
What goods and services became exempt?
Examples from the reforms include UHT milk and pre-packaged and labelled paneer or chena. Specified Indian breads also received nil-rate treatment. These examples do not mean that all food, all dairy products or every restaurant bill is tax-free.
See the government’s food-sector GST update.
Individual life and individual health insurance policies also received exemption from 22 September 2025. Do not extend that statement automatically to every group, business or travel-insurance product. Check the policy’s classification. The Department of Financial Services explains the individual-policy change.
Exempt does not mean zero-rated: GST distinguishes exempt or nil-rated supplies from zero-rated supplies such as qualifying exports. The distinction matters particularly for businesses and input tax credit.
What Is the Latest GST News—and Is GST Increasing in 2027?
The 57th GST Council meeting on 8 October 2026 concentrated on registration, returns, refunds, adjudication and other procedural reforms, alongside clarifications on particular supplies.
A recommended reform is not automatically effective law. Some measures require amendments, notifications or changes to the GST portal. Businesses should check the implementation document before changing their filing or invoicing practices.
As of this review, the official material checked does not establish a blanket GST increase for 2027. A headline about reforms starting in 2027 should not be interpreted as proof that the standard rate is increasing.
Read the 57th GST Council recommendations for the scope of those proposals.
What Does the 10% Customs Tariff for Personal Imports Mean?
The 2026 Budget customs documents specify a reduction in the tariff rate for dutiable personal-use goods under heading 9804, from 20% to 10%, effective 1 April 2026. They also address Social Welfare Surcharge on that heading.
See the official Customs Reforms FAQ.
Two distinctions are important:
- Tariff rate versus effective rate: A concession may already have given a particular transaction a lower effective rate before the tariff amendment.
- Basic duty versus total import charges: Reducing BCD does not automatically remove IGST, surcharge or clearance charges.
Therefore, it would be misleading to say that every personal parcel’s final tax bill was halved. Personal-use purchases were already described at a 10% effective BCD rate in some earlier Customs guidance.
Also, “personal use” in a conversation does not itself establish heading 9804 treatment. Passenger baggage has a separate framework, and restricted goods still need the appropriate permissions.
How Can 10% Basic Duty Become 30.98% Total Import Tax?
Mumbai Customs’ personal-import guidance describes a common combination of 10% BCD, surcharge equal to 10% of BCD, and 18% IGST.
For an illustrative assessable value of ₹10,000, the calculation is:
| Component | Calculation | Amount |
|---|---|---|
| Assessable value | Value accepted for customs assessment | ₹10,000 |
| Basic Customs Duty | 10% of ₹10,000 | ₹1,000 |
| Social Welfare Surcharge | 10% of ₹1,000 | ₹100 |
| IGST base | ₹10,000 + ₹1,000 + ₹100 | ₹11,100 |
| IGST | 18% of ₹11,100 | ₹1,998 |
| Total import tax | ₹1,000 + ₹100 + ₹1,998 | ₹3,098 |
The tax equals 30.98% of the assessable value in this example. It is not a universal rate for every shipment. Exemptions, classification and other levies can change the assessment.
The assessable value may differ from the advertised product price because customs valuation can include freight, insurance and other required adjustments. Courier handling, storage or clearance fees can add further costs.
Passenger Baggage Is Not the Same as a Courier Parcel
| Situation | What to check |
|---|---|
| You arrive with purchases in your suitcase | Baggage eligibility, allowances, exclusions and declaration requirements. |
| An overseas store sends you a purchase | Personal-import classification, valuation, import taxes and courier fees. |
| A relative posts you a gift | Gift-import provisions and applicable duties; “gift” does not mean tax-free. |
| You import stock for resale | Commercial classification, import policy, licences and business documentation. |
What changed for arriving passengers in 2026?
The Baggage Rules, 2026 replaced the previous framework. For qualifying arrivals other than by land, the general free allowance includes ₹75,000 for eligible residents and tourists of Indian origin, and ₹25,000 for tourists of foreign origin, subject to the definitions, exclusions and conditions.
There is also a specific provision for one new laptop for a passenger aged 18 or above, other than crew. Do not treat these brief examples as the full rules for infants, crew, land arrivals or every visa category.
Consult the official 2026 passenger FAQ and our India duty-free allowance guide.
Can you use your baggage allowance for a posted purchase?
No—not simply because the parcel belongs to you. The general passenger allowance is not a shopping credit that can be applied to unrelated international deliveries. Separately shipped goods need assessment under the provisions applicable to that shipment.
Does writing “gift” remove the duty?
No. Customs can examine the actual transaction and supporting documents. Use an accurate description and value. Mumbai Customs’ postal guidance addresses personal imports and gifts, including the April 2026 BCD change.
See India Post Customs Declarations: CN22 and CN23.
Gold, Jewellery and Electronics Need Their Own Checks
Gold and silver
A domestic GST rate for gold is not the same as the customs charge for bringing gold into India. Jewellery, bars and coins can fall under different provisions, and passenger eligibility matters.
Do not apply the ordinary-parcel example above to gold bullion or assume a duty-free airport purchase has tax-free entry into India. Check the weight, form, ownership, intended use and relevant declaration requirements.
- Gold and Silver: India Customs Rules
- Can You Bring a Costco Gold Bar to India?
- Wedding Jewellery: Planning Its Return Journey
Phones, laptops and other electronics
The domestic GST rate on an electronic product does not answer whether a traveller owes baggage duty. Similarly, a laptop exemption for eligible passenger baggage does not automatically cover a laptop ordered from abroad and delivered by courier.
Opening a box does not create a tax exemption. Keep the invoice and explain the device’s ownership and purpose accurately.
- Bought an iPhone Abroad? Why Customs May Ask for Duty
- Traveling to India With Laptops
- Traveling to India With a MacBook
What Customs Relief Was Announced for Medicines?
The 2026 customs changes extended BCD exemption to 17 specified drugs and medicines, including cancer treatments. Seven additional rare diseases were added to provisions covering qualifying personal imports of medicines and food for special medical purposes.
The Budget’s customs explanatory document identifies the products, amendments and effective dates.
This is not an exemption for every medicine or every medical parcel. Confirm the exact product, applicable notification and required medical documentation before shipping. A BCD exemption alone should not be assumed to remove every other charge or regulatory requirement.
Read Travelling With Medicines to India.
Commercial Imports and Input Tax Credit
GST brought many imports into the IGST framework, but Basic Customs Duty continues. Other customs levies can apply depending on the goods, origin and notification.
For an eligible GST-registered business, import IGST may qualify for input tax credit, subject to the statutory conditions and supporting documents. BCD is not GST input tax credit. A private consumer does not obtain business tax credit simply by receiving an invoice.
The CBIC introduction to GST on imports explains this underlying distinction; current rates must be checked separately.
Business shipments may require an IEC, product approvals, origin documentation and other compliance. Do not describe goods intended for resale as personal-use baggage to obtain a different treatment.
How to Check Your Final Import Cost
- Identify the route: Passenger baggage, personal parcel, gift, postal shipment or business import.
- Describe the product precisely: Include its model, composition, quantity and intended use.
- Confirm classification: Ask which tariff heading and notification support the assessment.
- Check effective dates: Old articles may describe an earlier tariff or an expired concession.
- Confirm the value: Retain the invoice, payment proof and shipping costs.
- Request an itemised estimate: Separate BCD, surcharge, IGST and any other levy from the courier’s own charges.
- Check restrictions: Paying tax does not override a licence requirement or import prohibition.
- Keep the assessment and receipt: These help explain the amount paid and support any permitted review or business credit claim.
For a costly or regulated shipment, obtain advice before dispatch. Returning a parcel after arrival may involve additional charges and does not guarantee a full refund.
Frequently Asked Questions
Did GST replace customs duty?
No. Basic Customs Duty remains separate. Import IGST is one component of the border-tax framework.
Are 5% and 18% the only GST rates?
No. They are the main rates, but the framework also includes 40%, exemptions and special rates for specified categories.
Is 40% GST charged on all expensive products?
No. It applies to specified classifications. A product’s price alone does not determine the GST rate.
Does a 10% customs tariff mean I pay only 10%?
No. Ask for the complete assessment, including surcharge, import IGST and other applicable charges.
Do imported goods always use the same GST rate as a local retail purchase?
Do not assume so. Import classification, including special headings for particular import situations, and exemptions must be checked.
Can I combine my baggage allowance with a family member’s allowance?
The passenger free allowance cannot be pooled to clear one expensive article. Check each passenger’s entitlement separately.
Does GST exemption make an item legal to import?
No. Tax treatment and import permission are separate. Restricted goods can still need licences or approvals.
Are more GST changes possible in 2027?
Yes, future changes are possible, but they should not be presented as confirmed until the relevant decisions and implementation documents are available.
Official Sources and Related Guides
- GST Council: Recommendations and Notifications
- CBIC Tax Information Portal
- ICEGATE Customs Portal
- Importing Into India: Customs, Duties and Permits
- Red Channel versus Green Channel
- Paying Customs Duty at Indian Airports
- India Customs Documentation
- GST on Flight Tickets and Input Tax Credit
- What to Declare at Indian Customs


