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Customs duty components: BCD, SWS, IGST & cess

Customs duty is a stack, not a single rate. Here's what each layer is, why it exists, and which ones you can recover.

By the Launch My Office team · Updated 2026-06-22 · 6 min read

When you import goods, several duties apply together. Knowing each one helps you price products correctly and avoid nasty surprises at the port. Use the Import Duty Calculator to see them combine in real time.

Basic Customs Duty (BCD)

BCD is the foundation duty, set as a percentage of the assessable (CIF) value and determined by the product's HSN code. It is not creditable under GST, so it's a permanent cost in your margin.

Social Welfare Surcharge (SWS)

SWS is generally 10% of the BCD amount. It funds social welfare schemes and, like BCD, is not available as input tax credit.

Integrated GST (IGST)

IGST is charged at the product's GST rate on the value including BCD and SWS. The big advantage: GST-registered importers can claim it back as input tax credit.

Compensation Cess

Cess applies only to specific goods (such as certain automobiles, tobacco and aerated drinks). Most e-commerce categories don't attract it, but check your HSN code to be sure.

ComponentBased onCreditable?
BCDAssessable valueNo
SWSBCDNo
IGSTAV + BCD + SWSYes (ITC)
CessAV + BCD (select goods)Yes, against cess only
Your true cost of importing is mainly BCD + SWS. IGST is a cash-flow item you recover as ITC, so factor financing — not loss — for that portion.

Put it together

Find your HSN and rates with the HSN Code Finder, then model the full stack with the Import Duty Calculator before placing an order.

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Frequently asked questions

Is BCD refundable or creditable?

No. BCD and SWS are costs you cannot claim as input tax credit.

How is IGST on imports calculated?

At the product's GST rate on the sum of assessable value, BCD and SWS.

Does compensation cess apply to most products?

No. It applies only to specific notified goods. Most common e-commerce categories don't attract cess.

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