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NRIs relocating to India from the UAE, follow these customs duty tax rules Image Credit: REUTERS

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 having to one day move back to their home country.

When making arrangements to take their belongings back to India, expats would most often either contemplate taking high-value carry-ons with them to the airport or shipping big-ticket items beforehand.

When doing so, it’s common to come across terms like ‘customs’, ‘customs duty’ or ‘customs duty taxes’. While it’s vital to account for this tax so as to be prepared when hit with it, let’s first know what it is.

What is a customs duty?
When goods get across international borders, they attract a government-imposed tax called customs duty - a form of indirect tax imposed at the time of both import and export of goods and services.

When customs duty is levied in the country of export, it is called an export duty. When it is applied in the country of import, it is called an import duty.

What to keep in mind when it comes to customs duty?

The import and export of items can attract not one but multiple customs duties, along with various other charges. These duties and charges, when combined, can add up to a considerable amount in total shipping or airfare costs when relocating your costly household goods back to India from the UAE.

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When making arrangements to take their belongings back to India, expats would most often either contemplate taking high-value carry-ons with them to the airport or shipping big-ticket items beforehand.

Indian nationals, foreign nationals including those of Indian origin, transferring their residence to India or coming to India on employment, can import their personal belongings and household goods into India free of duty – subject to the following conditions:

1. Owner of the goods must have lived overseas for at least two years and must be transferring his or her residence to India. Indian nationals must not have visited India for more than 180 days in the preceding two years.

2. Foreign nationals must have a resident, business, work or an entry visa. Goods also must be shipped out within 30 days of the owner’s arrival into India.

3. Cars can be shipped with six months of the owner’s arrival. If there is a delay then goods can be cleared only if customs condone the delay. Each case will be decided on their respective merits.

4. Presence of the owner is required during customs clearance and therefore he or she should have arrived into India before shipment arrives else container detention will be quite costly.

Generally put, the customs tax on goods sent from the UAE, that don’t fall under the duty-free allowance, is around 36.05 per cent. This is charged on the market rate of the same products in India.

What travellers need to know about customs duties while travelling?

What travellers need to know about customs duties while travelling?

It is also essential for everyday UAE-India travellers to fully understand the customs duties applicable on their carry-ons and how they can calculate them.

So let’s first find out what routine travellers need to keep in mind on customs duty taxes, before knowing how customs duties apply to big-ticket items.

How do travellers declare items at customs at the airport?

Every traveller entering India has to pass through a customs check. The passenger has to declare the contents of his baggage in the prescribed Indian customs declaration form provided at the airports.

In order to get customs clearance, there is a two channel system for passengers arriving in India: A ‘Green Channel’ for those without any dutiable goods, and a ‘Red Channel’ for those having such goods.

However, the ‘Green Channel’ passengers must deposit the customs portion of the card to the customs official at the exit gate before leaving the terminal.

How much currency would a traveller have to declare at airport customs?

In the case of airline passengers normally resident in India who are returning from a visit abroad, import of the Indian currency up to Rs25,000 (Dh1,225) is allowed.

You can bring foreign exchange into India without any limit. If, however, the value of foreign currency in cash exceeds $5,000 (Dh18,365) or the cash plus travellers’ cheques exceed $10,000 (Dh36,700) it should be added to the currency declaration form at the airport, on arrival in India.

How much currency would a traveller have to declare at airport customs?

You can indefinitely retain foreign exchange up to $2,000 (Dh7,346), in the form of foreign currency notes or travellers' cheques for future use. Any foreign exchange in cash in excess of this sum, is required to be surrendered to a bank within 90 days and cheques within 180 days of return.

Foreign exchange can be purchased from any bank which is authorised to deal in foreign exchange or full-fledged moneychangers. If the rupee equivalent exceeds Rs50,000 (Dh2,450), the entire payment has to be made by way of a crossed cheque, banker's cheque or pay order, demand draft only.

Individuals who are new to the manual or physical banking must be wondering the difference between pay order and demand draft as both serve the same purpose. Here’s what those are, alongside what a crossed cheque is.

What is the difference between a pay order, demand draft and a crossed cheque?
Pay order is a financial instrument that is issued by the bank on the customer's behalf giving an order to pay a particular amount to a particular person in the same city. Payment orders are not negotiable and even this thing is printed in words on the instrument.

A demand draft is a method used by an individual to make a transfer payment from one bank account to another. Demand drafts differ from regular normal checks in that they do not require signatures to be cashed.

A crossed check is any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. Therefore, such checks cannot be immediately cashed by a bank or by any other credit institution.

Can a traveller bring gold along with him or her as baggage?

An Indian passenger who has been residing abroad for over one year is allowed to bring jewellery, free of duty in his baggage up to an aggregate value of Rs50,000 or Dh2,500 (in the case of a male passenger) or Rs100,000 or Dh5,000 (in the case of a female passenger).

If an Indian passenger brings more than 1 kilogram of gold then for the 1 kilogram he or she will have to pay 10 per cent of the price of gold in Indian market, as duty, and for the amount exceeding that, he or she will have to pay a heavy customs duty of 36.05 per cent of the cost of gold as per the Indian market.

Can a traveller bring gold along with him or her as baggage?

Relocating to India? What to know when moving big-ticket items

The rate of duty applicable to several big-ticket items imported by passengers transferring their residence or returning to India after a stay of 365 days abroad in the preceding two years is about 15.3 per cent.

When relocating household goods to India what items are duty free?
Old and used personal effects and household goods such as clothes, books, kitchenware, furniture small appliances like mixer, juicer, iron, etc. are allowed to be imported free of duty if these are shipped.

These items are excluded from customs duty because it falls under concessional customs duty. It applies to the import of goods required for domestic production of goods or providing services.

Also, new articles are charged duty at the rate of 60 per cent.

However, concessional duty rate of 35 per cent is allowed only on the first unit. If the shipping company has two or more of any appliance, of the combined value of the appliances exceeds Rs150,000 (Dh7,355) duty at 60 per cent will be charged on the additional units or value.

What household goods are levied customs duty?

The following 14 major appliances (single unit of each) are charged duty of 35 per cent of the value subject to a value limit of Rs150,000 (Dh7,355) – regardless of usage.

The items are television, VCR, washing machine, dishwasher, music system, personal computer, microwave oven, air conditioner, refrigerator, deep freezer, video camera, cooking range, word processor and fax machine.

Import duties on alcohol and spirits etc. are very high in India (approximately 243 per cent) and on beer and wines (approximately 150 per cent).

What household goods are levied customs duty?

Will I be charged if I want to shift my car to India?

Indian nationals coming to India on transfer of residence are allowed to import one vehicle. Import of both new as well as old cars is now allowed.

Payment for the car must be made prior to arrival or owner in India. Shipment can be effected within six months of arrival. Instead of a motorcar, one motorcycle can also be imported.

A ‘no-sale’ bond for two years has to be filed at the time of import, which is a document stating that the person should wait for 2 years in order to sell the vehicle. Duty can now be paid in Indian rupees and not in convertible foreign exchange.

Foreign nationals coming to India on employment can import one car regardless of the car's engine capacity. India allows vintage car imports only when the concerned vehicle is manufactured on or after January 1, 1950.

Currently, India imposes 125 per cent to 165 per cent duty on fully imported cars with CIF (Cost, Insurance and Freight) value more than $40,000 (Dh146,920) and roughly half the duty percentage on those costing less than the amount.

On an average, you can expect to pay around Dh6,000 to Dh7000 for one-way door-to-door transport of a vehicle in a 20-ft. single container when shipping to India. This rate is just an average for a mid-sized vehicle and can vary based on destination port, company rates, included services, container details etc.

If take my pet along with me to India – will I be charged?

Domestic pets may be imported duty free. Health and rabies vaccination certificates are required. However, the owner must be present in India and procedures vary at different customs points.

Import of pets (dog and cat only) up to two numbers per passenger are allowed at one time, subject to providing required health certificate from country of origin and examination of the said pets by the concerned quarantine officer in India.