Dubai: A large majority of the expat population in the UAE are Indian citizens, some of whom have spent decades in the country and face the prospect of one day having to return to their home country.
When arranging to bring their belongings back to India, expats most often consider either taking high-value hand luggage with them to the airport or shipping expensive items beforehand.
In doing so, it is common to encounter terms such as “customs”, “customs duty” or “taxes on customs duties”. If it is essential to account for this tax in order to be ready in the event of a hard blow, let us first know what it is.
What is a customs duty?
When goods cross international borders, they are subject to a government-imposed tax called a customs duty – a form of indirect tax imposed upon the import and export of goods and services.
When a customs duty is levied in the country of export, it is an export duty. When applied in the importing country, it is called import duty.
What to keep in mind when it comes to customs duties?
Importing and exporting items may incur not one but multiple customs duties, as well as various other charges. These duties and charges, when combined, can add up to a considerable amount in shipping or air freight costs when relocating your expensive household items to India from the UAE.
Indian nationals, foreign nationals, including those of Indian origin, transferring their residence to India or coming to India on the basis of employment, can import their personal effects and household goods into India duty free – under subject to the following conditions:
1. The owner of the goods must have lived abroad for at least two years and must transfer his residence to India. Indian nationals must not have visited India for more than 180 days in the previous two years.
2. Foreign nationals must hold a residence, business, work or entry visa. Goods must also be dispatched within 30 days of the owner’s arrival in India.
3. Cars can be shipped within six months of the owner’s arrival. If there is a delay, the goods can only be cleared if customs tolerates the delay. Each case will be judged on its respective merits.
4. Owner’s presence is required during customs clearance and hence should have arrived in India before the shipment arrives, otherwise holding the container will be quite costly.
Generally, customs tax on goods sent from UAE, which do not fall under duty free, is around 36.05%. This is charged on the market rate of the same products in India.
What should travelers know about customs duties when traveling?
It is also essential for daily travelers from the United Arab Emirates and India to fully understand the applicable customs duties on their hand luggage and how they can calculate them.
So let’s first find out what routine travelers should keep in mind about customs taxes, before we learn how customs duties apply to big-ticket items.
How do travelers declare items to airport customs?
Every traveler entering India must clear customs. The passenger must declare the contents of his baggage in the prescribed Indian customs declaration form provided at the airports.
In order to obtain customs clearance, there is a two-channel system for passengers arriving in India: a “green channel” for those who do not have dutiable goods and a “red channel” for those who have such merchandise.
However, passengers on the “green lane” must submit the customs part of the card to the customs officer at the exit gate before leaving the terminal.
How many currencies should a traveler declare at airport customs?
In the case of air passengers normally residing in India returning from an overseas visit, import of Indian currency up to Rs25,000 (Dh1,225) is permitted.
You can bring foreign currency to India without any limit. If, however, the value of foreign currency in cash exceeds $5,000 (18,365 Dh) or if cash plus travelers checks exceeds $10,000 (36,700 Dh), it must be added to the declaration form of currencies at the airport, upon arrival in India.
You can keep currency up to $2,000 (7,346 Dh) indefinitely, in the form of currency notes or travelers checks for future use. Any cash exchange over this amount must be returned to a bank within 90 days and checks within 180 days of return.
Currencies can be purchased from any bank authorized to carry out foreign exchange transactions or from full-fledged money changers. If the Rupee equivalent exceeds Rs50,000 (Dh2,450), full payment must be made by crossed cheque, bank check or payment order, sight draft only.
People who are new to manual or physical banking must consider the difference between payment order and demand draft, as both serve the same purpose. Here’s what it is, next to what a crossed check is.
What is the difference between a payment order, a sight draft and a crossed cheque?
Payment order is a financial instrument issued by the bank in the name of the customer giving the order to pay a particular amount to a particular person in the same city. Payment orders are non-negotiable and even that thing is spelled out on the instrument.
A demand draft is a method used by an individual to make a transfer from one bank account to another. Sight drafts differ from normal regular checks in that they do not require a signature to be cashed.
A crossed check is any check crossed out with two parallel lines, either across the entire check or in the upper left corner of the check. These checks cannot therefore be immediately cashed by a bank or any other credit institution.
Can a traveler take gold with him as luggage?
An Indian passenger who has been residing abroad for more than one year is allowed to bring jewelry, duty free, in their baggage up to a total value of Rs 50,000 or Dhs 2,500 (in the case of a male passenger) or Rs 100,000 or Dhs 5,000 (in the case of a female passenger).
If an Indian passenger brings more than one kilogram of gold, for this kilogram, he will have to pay 10% of the Indian market price of gold, as a duty, and for the higher amount, he will have to pay a heavy customs duty of 36.05% of the cost of gold according to the Indian market.
Moving to India? What to know when moving bulky items
The rate of duty applicable to several expensive items imported by passengers transferring their residence or returning to India after a stay of 365 days abroad within the previous two years is approximately 15.3%.
When relocating household goods to India, which items are duty free?
Old and used personal effects and household items such as clothes, books, kitchen utensils, furniture, small appliances like blender, juicer, iron, etc. may be imported duty free if shipped.
These items are excluded from customs duty as they fall under preferential customs duty. It applies to the import of goods necessary for the domestic production of goods or the provision of services.
In addition, new items are subject to a 60 percent customs duty.
However, a preferential duty rate of 35 percent is only allowed on the first unit. If the shipping company owns two or more devices, if the combined value of the devices exceeds Rs 150,000 (Dh 7,355), 60% customs duty will be charged on the additional units or value.
What household items are subject to customs duties?
The following 14 major household appliances (only one unit of each) are subject to customs duty of 35% of value subject to a value limit of Rs 150,000 (Dh 7,355) – regardless of use .
The items are television, VCR, washing machine, dishwasher, music system, personal computer, microwave oven, air conditioner, refrigerator, freezer, video camera, stove, word processor and fax machine.
Import duties on alcohol and spirits, etc. are very high in India (about 243 percent) and on beer and wines (about 150 percent).
Will I be charged if I want to transfer my car to India?
Indian nationals coming to India on transfer of residence are allowed to import a vehicle. The import of new and old cars is now allowed.
Payment for the car must be made before arrival or the owner in India. Shipment can be made within six months of arrival. Instead of an automobile, a motorcycle can also be imported.
A two-year “no sale” bond must be posted at the time of importation, which is a document indicating that the person must wait 2 years to sell the vehicle. Duties can now be paid in Indian rupees and not in convertible currencies.
Foreign nationals coming to India for employment can import a car irrespective of the engine capacity of the car. India only allows imports of vintage cars when the vehicle concerned is manufactured on or after January 1, 1950.
Currently, India imposes tariffs of 125% to 165% on fully imported cars with a CIF (cost, insurance and freight) value above $40,000 (Dh146,920) and about half the percentage of duties on those that cost less than the amount.
On average, you can expect to pay around Dhs 6,000-7,000 for one-way door-to-door transportation of a vehicle in a 20ft. single container when shipping to India. This rate is only an average for a medium-sized vehicle and may vary depending on port of destination, company rates, services included, container details, etc.
If I bring my pet with me to India, will I be charged?
Pets can be imported duty free. Health and rabies vaccination certificates are required. However, the owner must be present in India and procedures vary between customs points.
The importation of pets (dog and cat only) up to two numbers per passenger is permitted at a time, subject to providing the required health certificate from the country of origin and examining said pets by the concerned quarantine officer in India.