Import of Passenger Automobiles to India

Import of Car to India
Passenger automobilies including Cars, Jeeps, Multi-Utility Vehicles and Motor Cycles etc. are restricted items of import and can be imported against an import license. However individuals coming to India on Transfer of Residence after two years continuous stay abroad and other importers as specified in Public Notice No. 3(RE/1997-02) of Directorate General of Foreign Trade, New Delhi, may import these vehicles without a license but on payment of customs duty .

The Imported Vehicle should have right hand steering and controls.

Indian nationals coming to India for permanent settlement:

Used household goods and personal effects, which have been owned and used by the shipper for at least 6 months and are not part of other concessions, up to total value of Rs.75,000

Transfer of Residence Rules are subject to change from time to time

• Import of one passenger car with engine size not exceeding four cylinders and not exceeding 1600 c.c. is permitted, whether the car is new or old. However, if engine size exceeds four cylinders or 1600 c.c., the car should have been in the use of the importer for more than a year prior to his return to India
• The importer has stayed abroad continuously for a period of at least two years prior to his coming to India for permanent settlement.
• The payment for the car is made abroad before his return to India. Custom duty can be paid
• The car should be imported into India within six months of the arrival of the importer in India for permanent settlement.
• If the importer transfers his residence out of India again, he will be entitled to import another car under the policy only after a minimum period of five years from the date of importation of the previous vehicle. Customs authorities shall endorse on the passport of the importer " Transfer of residence with car" at the time of clearance of the car.
• The importer is free to sell the car in the open market after his return to India without any restriction as regards the period of retention of the vehicle.
• Import of one two-wheeler in place of car is also permitted whether the same is new or old subject to fulfillment of the above conditions.
• Import of any other type of automobile vehicle may be permitted by the Director General of Foreign trade,on merits.
• On the import of the vehicle, it should be registered in the name of the importer.

* Special Excise Duty exempted in the case of cars capable of being used by physically handicapped persons

Valuation of Car & Duty Rates

The value of the car is determined in the following manner:

1. Manufacturer's invoice value is accepted wherever such invoice is available.
2. When no such invoice is available, value is determined on the basis of the world car catalogues available with the department or on the basis of manufacturer's price list, where ever available. Normal Trade Discounts are allowed to be deducted where ever the value is taken on the basis of World car catalogues.
3. Value of Second hand car is arrived at in the above manner after allowing the deductions for depreciation as per the schedule below, subject to maximum of 70%
   

Customs Duty for New vehicles

Vehicle Basic Duty Addl. Duty Spl. Addl. Duty Car / Jeep / MUV 60% 32% 4% Motor Cycles / Scooters / Mopeds 30% 16% 4%

Customs Duty for Used vehicles

Vehicle Basic Duty Addl. Duty Spl. Addl. Duty Car / Jeep / MUV 105% 32% 4% Motor Cycles / Scooters / Mopeds 105% 16% 4%

The restrictions/conditions imposed on import of car by importers for commercial purpose shall not be applicable in case of the passengers bringing their own car on Transfer of Residence. However, these imports shall be subject to the condition that, the vehicle should have right hand steering and controls (applicable on vehicles other than 2 and 3 wheelers).

Value of these vehicles for the purpose of levy of customs duty is CIF value, where C stands for the cost of the goods, I is the insurance and F is the freight. Cost in the case of new vehicle is the transaction value between the seller and the buyer, however in the case of old and used vehicles cost is arrived at by taking value of the vehicle in year manufacture and after allowing depreciation at following rates: For every quarter during 1st year - 4% For every quarter during 2nd year - 3% For every quarter during 3rd year - 2.5% For every quarter during 4th year & after - 2% (subject to a maximum depreciation of 70%)

Import Duty on Motor Cars
Motor cars, Motor cycles and scooters whether new or old imported into India are chargeable to duty on the basis of their list price prevailing in the country of the their manufacture on the date on which a bill of entry is presented. However, trade discount and depreciation on the value are deductible from the price list but freight from the country of manufacture and insurance charges are added. The landing charges are also added to this to arrive at the final assessable value.


Homologation:
Homologation is the process of certifying that a particular car is roadworthy and the Pune-based Automotive Research Association of India (ARAI) provide this clearance. According to existing norms, every original car model brought into the country by an individual or a manufacturer must have homologation clearance. Even domestic car manufacturers need a homologation certificate for new models. There are some exclusions as well

• Manufacturers can import left hand drive vehicles only for testing and research purposes.
• Individuals importing top-end cars can waive off the testing — or homologation — requirements. Any individual can import a vehicle priced above Rs 20 lakh without sending it for road-worthiness tests.
• Import of new vehicles is only permitted through Customs ports at Nhava Sheva, Kolkata, Chennai, Delhi Air Cargo and at ICD, Tughlakabad

For Non Residential Indians (NRIs)
Individuals coming to India for permanent settlement after two years of continuous stay abroad can bring in a car provided the vehicle has been in their possession for at least one year abroad. This now ensures that individuals coming to India do not bring in an absolutely new car.


Payment of Custom Duty for Import of cars and vehicles
In case of Indian nationals or foreign nationals of Indian origin returning to India for permanent settlement, custom duty can be paid in rupees derived by sale of foreign exchange or by debit to their NRE/FCNR accounts held in India or out of the funds held in their RFC account. In such cases, the authorized dealers will have to issue a certificate to that effect for submission to the Customs authorities. It will also be in order for the authorized dealers to open and maintain special non-convertible accounts in the name of the above categories of persons with funds derived either by remittances from abroad or by debit to their NRE/FCNR/RFC account in India for the purpose of paying custom duty. The certificates issued by authorized dealers should, however, bear a clear superscription that the same have been issued for submission to the customs authorities for payment of custom duty, after assessment thereof.