India GST and Customs Duty Changes: Key Updates and Impacts
India’s GST regime simplified much of the indirect tax system, but customs duty still applies on imports and remains separate from GST. The latest updates also bring major changes for personal imports, manufacturing inputs, and tariff rationalization in 2026.
If you are importing goods into India, the key rule is simple: GST and customs duty are related, but they are not the same tax. Basic Customs Duty, IGST on imports, and selected cess or safeguard levies can all apply together depending on the product and import route.
| Never Use |
Use Instead |
| “GST replaces all import taxes.” |
“GST applies on imports, but Basic Customs Duty still stays in place.” |
| “Customs duty and GST are the same thing.” |
“Customs duty and GST are separate levies that can both apply.” |
| “All imported goods get the same rate.” |
“Rates vary by product, purpose, and notification.” |
| “Gold only attracts GST.” |
“Gold attracts GST plus customs duty.” |
What Changed After GST
GST did not remove customs duty from imports. Instead, the import tax structure shifted so that Countervailing Duty (CVD) and Special Additional Duty (SAD) were replaced by IGST on imports, while Basic Customs Duty (BCD) continued under customs law.
This is why importers still calculate duty in layers rather than as a single flat tax. In practice, the final bill can include BCD, IGST, Social Welfare Surcharge, and in some cases special duties such as anti-dumping or safeguard duty.
Core import taxes
Basic Customs Duty (BCD): Charged under customs law and still payable on many imports.
IGST on imports: Applied to imported goods to align them with domestic GST treatment.
Other duties: Education cess, anti-dumping duty, and safeguard duty may still apply where the law allows.
Latest Customs Duty Updates
The 2026 customs changes focus on easing consumer costs, supporting domestic manufacturing, and improving trade facilitation. One of the biggest consumer-facing changes is the reduction of the tariff rate on dutiable goods imported for personal use from 20% to 10%.
The government has also pushed tariff rationalization, with reported reforms aimed at streamlining duties, expanding faceless assessment, and improving predictability for importers. For businesses, that can mean faster clearance and lower friction at the border.
Personal imports
For personal imports, the headline change is the cut from 20% to 10% on dutiable goods, which lowers the cost of cross-border shopping and travel purchases.
Manufacturing inputs
Budget 2026 also supports local production by reducing or rationalizing duties on selected raw materials and components, including inputs used in EV batteries, solar equipment, and other strategic sectors. That is meant to reduce input costs and strengthen “Make in India.”
Medicines and relief items
Several reports note duty relief for essential cancer-related and rare disease medicines, reflecting a policy push to reduce costs on critical healthcare imports. That matters most for households facing recurring treatment expenses.
GST on Imports
GST continues to apply to imports through IGST, which keeps imported goods taxed in a way that is broadly comparable to domestic supply. This is one reason imports are not exempt from GST just because customs duty still exists.
The current GST structure was also simplified in 2025 to a two-tier system of 5% and 18%, with a 40% rate for select luxury and sin goods. That reform matters for importers because the GST rate on the underlying product can materially change landed cost.
Why it matters
- Check the tariff heading before assuming a rate.
- Separate customs duty from IGST when estimating landed cost.
- Watch for product-specific exemptions or concessional notifications.
- Recheck rates before shipment, because customs notifications can change quickly.
Gold Taxation
Gold remains a special case because it attracts both customs duty and GST. Under the older structure, gold jewellery tax burden was often described as roughly 12.2% before GST, and under GST the 3% GST rate applies alongside the 10% BCD on gold imports.
That means the post-GST system did not eliminate tax on gold; it simply replaced excise and VAT with GST while leaving customs duty intact. State-level and local charges can still affect the final cost in some cases.
Important: Gold duty calculations can change depending on the form of the product, import route, and prevailing customs notifications. Always verify the latest rate before import.
Impact on Businesses
For businesses, the biggest benefit of GST is structural clarity: CVD and SAD are gone, IGST is more standardized, and some dispute areas around intermediary services and post-sale discounts are being clarified. That reduces compliance uncertainty and can improve cash flow planning.
For manufacturers, lower duties on selected inputs can cut production costs and support domestic value addition. For exporters, clearer classification and faster customs processes can help reduce delays and administrative burden.
Pros
- Cleaner tax structure for imports.
- Lower duty on selected personal imports.
- Better support for domestic manufacturing.
- More predictable compliance for businesses.
Cons
- Customs duty still adds cost on many imports.
- Product-specific rules can be hard to track.
- Gold and luxury items remain heavily taxed.
- Notifications may change landed cost quickly.
How to Estimate Import Cost
- Find the correct HS code or tariff heading for the item.
- Check whether BCD applies and at what rate.
- Add IGST on the assessable value plus applicable duties.
- Check whether any surcharge, cess, or special duty applies.
- Confirm the latest exemption or concessional notification before payment.
| Tax type |
Role in import cost |
| BCD |
Base customs levy that still applies on many imports. |
| IGST |
Brings imports into the GST framework. |
| Surcharge / cess |
Can increase the total payable amount. |
| Special duties |
Apply only to selected products or trade remedies. |
Practical Takeaways
For consumers, the 2026 changes make personal imports cheaper, especially for electronics and other dutiable items. For businesses, the policy direction is toward simpler compliance, lower input costs, and a more manufacturing-friendly tariff structure.
For gold buyers and importers, the tax burden remains significant because customs duty and GST both continue to apply. If you are comparing landed cost across product categories, gold and luxury goods will usually remain among the most heavily taxed imports.
FAQ
Has GST replaced customs duty in India?
No. GST has not replaced customs duty in India, because Basic Customs Duty still applies separately, while IGST is charged on imports under the GST framework.
What changed for personal imports in Budget 2026?
The tariff rate on dutiable goods imported for personal use was reduced from 20% to 10%, which lowers the cost for many consumer purchases brought in from abroad.
Is customs duty part of GST?
No. Customs duty is separate from GST, although IGST is levied on imports to align them with the GST system.
What happened to CVD and SAD after GST?
CVD and SAD were replaced by IGST on imports in the GST regime, which simplified the tax structure for imported goods.
Does gold still attract customs duty after GST?
Yes. Gold continues to attract customs duty, and GST is also applied, so the total tax burden remains significant.
Are all imported goods taxed at the same rate?
No. Import taxes depend on the product classification, use case, and current notifications, so rates can differ widely across goods.
Why do import costs change so often?
Import costs change because the government updates customs notifications, GST slabs, and product-specific exemptions to support policy goals such as manufacturing, healthcare relief, or trade facilitation.
GST Council | CBIC | India Budget
