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Environmental and Sustainability Aspects of Scrap Metal Import

Understanding Customs Duties and Tariffs on Metal Scrap Imports into India

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Customs Duties and Tariffs on Metal Scrap Imports

Metal scrap plays a crucial role in India’s industrial landscape, serving as a valuable raw material for various sectors such as manufacturing, construction, and infrastructure development. However, importing metal scrap into India involves navigating a complex web of customs duties and tariffs. This blog aims to provide an overview of the customs duties and tariffs applicable to metal scrap imports into India.

Customs Duties on Metal Scrap Imports

Customs duties are taxes levied on goods when they are imported into a country. In India, the Customs Act 1962 governs the imposition of customs duties. The applicable customs duties on metal scrap imports into India are primarily classified into essential customs duty (BCD), integrated goods and services tax or IGST, and additional customs duty, commonly known as countervailing duty (CVD).

Basic Customs Duty (BCD)

BCD is the primary duty levied on imported goods and is determined as a percentage of the assessable value of the imported item. The rates for BCD on metal scrap imports may vary depending on the specific type of metal and its classification under the Harmonised System of Nomenclature (HSN) code. As of my knowledge cutoff in January 2022, the BCD rates for various metal scraps typically ranged from 2.5% to 10%.

It’s crucial for importers to correctly identify the HSN code for the specific metal scrap they are importing to guarantee an accurate assessment of BCD.

Integrated Goods and Services Tax (IGST)

IGST is a comprehensive tax that subsumes various indirect taxes and is applicable to the value of imported goods, including the BCD. The IGST rates are determined based on the HSN code and are typically higher than the BCD rates. Importers need to factor in both BCD and IGST when calculating the total customs duties payable on metal scrap imports.

Countervailing Duty (CVD)

CVD, also known as additional customs duty, is imposed to counteract any subsidy provided by the exporting country. It is calculated on the same basis as the excise duty on similar goods manufactured in India. The CVD is levied on the assessable value, including BCD and other applicable duties. The rates for CVD can vary based on the specific metal and its HSN code.

Exemptions and Concessions

Certain exemptions and concessions may apply to metal scrap imports into India based on the government’s trade policies and agreements. Importers should stay informed about any notifications or updates from the Directorate General of Foreign Trade (DGFT) regarding duty exemptions or changes in duty rates.

Documentation and Compliance

Importers must adhere to the documentation requirements prescribed by the Customs authorities. This includes providing accurate details about the imported metal scrap, such as the HSN code, quantity, and value. Additionally, compliance with environmental regulations and quality standards is essential to facilitate the smooth clearance of goods through customs.

Conclusion

Navigating the customs duties and tariffs on metal scrap imports into India requires a thorough understanding of the Customs Act, HSN codes, and prevailing duty rates. Importers must stay updated on changes in duty rates and regulations to ensure compliance and optimize their cost structures. By staying informed and adhering to the prescribed procedures, businesses can leverage the import of metal scrap to contribute to India’s industrial growth while remaining compliant with customs regulations.

Diksha Khiatani

A writer by day and a reader at night. Emerging from an Engineering background, Diksha has completed her M. Tech in Computer Science field. Being passionate about writing, she started her career as a Writer. She finds it interesting and always grabs time to research and write about Environmental laws and compliances. With extensive knowledge on content writing, she has been delivering high-quality write-ups. Besides, you will often find her with a novel and a cuppa!