Fees for Importing Used Cars to India

July 2, 2012

India is a wonderful country, but some of its laws can be confusing for people who aren't familiar with them, especially on how to import used cars. Economically, the country is also poised to take over the Asian market with China in tow, in terms of sales and manufacturing. But for avid Indian car fans there is a drawback of not being able to use foreign cars. There are several reasons for this, as the Indian car market aims to improve Indian companies rather than bringing in imports. However personal imports of used foreign cars are still allowed in the country. If you are planning to get a used foreign car into India, it is time to familiarize yourself with India Car tax rules and the custom duty applicable on imported cars.

Rules that Govern the Import of Cars by NRIs or Non-Resident Indians

The person who is importing the car should be based abroad for at least two years or more to be eligible to import used cars. Once the NRI imports the car, he cannot do so for five years or more. The car should be paid for with foreign exchange and spare parts will require a separate license. Each car is charged customs and depreciation based on the car model.

Rules for Import of Used Cars

The used car should conform to the Motor and Vehicles Act that was established in 1988 and follow every rule that was added to it after that. The used car should also have a roadworthiness of five years from the import date. These cars are supposed to be only for personal use and should have a right hand drive. The car should have been used for at least a year or more abroad. Each car also has to undergo homologation to ensure it complies with Indian standards of emission, fuel quality and road safety. This is only carried out by the Pune-based Automotive Research Association of India (ARAI) or the Vehicle Research and Development Establishment (VRDE). Importing of used or new cars is also possible only through Nhava Sheva Port, Mumbai, India.

The Basic Customs Duty is Expensive

The usual customs duty that has to be paid on the used car based on CIF where C is the cost of the car, I is form insurance and F stands for the freight value of getting the car. The actual valuation can be further broken down into: Customs duty is where you have to pay the tariff on used cars ranging anywhere from 12.3% to about 10%. The Central Sales Tax is also added to the forming an additional 4%. Excise duty that is indirectly levied and can come to about 24% for new and used cars.

Reduction in Price for Used Cars?

But when you import used cars, depreciation is added to the cost of the car. This will reduce the overall amount you have to pay and it works out like this:

Every quarter of the 1st year- 4%
Every quarter of the 2nd year- 3%
Every quarter of the 3rd year- 2.5%
Every quarter of the 4th year- 2%
Every quarter of the remaining years ranging to a maximum depreciation of 70%

Overall you will end up paying more than the car costs ranging up to 110% of the car value. But get in touch with official websites here at CBEC and at the Department of Heavy Industry, which will update you on the latest rules regarding the import of used cars in to India.

Related Questions and Answers

Are Car Insurance Rates Higher for New Imported Cars?

Car insurance for imported cars can be higher for some of the more exotic new imports, like the Fiskars 200 mph street legal electric car or the BMW 750 series. They are a hot series right now. If you look at the numbers, though, you will likely find that at least two Audis, the Q5 and Q7, are also right up there when it comes to insurance cost. As are models like the Mercedes-Benz C55. You'll find these are in the stratosphere of car insurance rates if you put one on the road. You may end up spending as much on your insurance as some people do on their entire years' worth of car payments.

What are the Top 5 Biggest Import Cars?

Although this is a list of the biggest top import cars, some people still think the world's first imported hybrid was the Toyota Prius. The first imported vehicle was the Honda Insight, and while it never did sell in the numbers of the Prius, which is largely the top imported hybrid, Honda still holds the distinction of having the first imported hybrid. Another of the top 5 imports, says Associated Content, is the Mazda 5 Van, while the Hyundai Elantra is in the top import list as well. Rounding out this list is Subaru's Forester, and some think the Volkswagen Golf GTI is the fifth vehicle. It is more likely that some Scion models may easily fit this bill, as do some models from Volvo.

Are Vehicles at Imported Car Dealers Usually More Expensive?

Imported car dealer's products are not generally more expensive than the brands that are manufactured in the U.S. Indeed, some models that are "manufactured in the U.S." are actually imported into this country. There are some Honda models that are actually built in Canada, that have to make the trip across the border and pay customs duties. Many import companies built factories here in the 1970s and 1980s to take advantage of the fact that they would be considered domestic, not imported.

Can I Keep the Original License Plate after I Import My Car?

If you are asking officials "Can I keep the original license plate after I import my Car?". The answer is no, you cannot keep the original license plate and run it on the roads in this country. You must not only have your vehicle approved by the National Highway Traffic Safety Administration (NHTSA) as meeting all safety regulations, but also the Environmental Protection Agency (EPA), that it meets all emissions standards. Each state also has its own licensing requirements, and you must make sure that car also meets those standards. This includes ensuring the vehicle has the correct number of plates on it from your state.

Where Can I Look Up Import Regulations from India?

Import regulations for India are available on a weekly basis from the U.S. Customs Service. The Customs Service has created a Customs Automated Commercial System (ACS) that facilitates the automatic imports of goods and services from India. The system cuts the time needed as imports from India come to this country. The automated system has, in some cases, taken what would have taken days, and has turned the process of getting goods from India into this country very quickly. In some cases, the Department of Commerce estimates the process is now down the to the hours range or, it may only take a few minutes.

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