The next time you choose free or EMS shipping method for delivery of products into India (from abroad) think again. Use free shipping or EMS only for products that are priced at under $30 this includes CIF – Cost, Insurance and Freight.

There are many users who order products from international websites and get them delivered at their home or office in India. Almost all international sites offer free shipping on most items. Opt for free or EMS shipping only if the product value that includes (Cost, Insurance and Freight) is not more than $30 or ₹2000.

I guess many of you might have imported a smartphone via ordinary post / EMS that was definitely priced over $30, the idea was to avoid paying custom duty. Almost everyone you ask will tell you that they were doing it for two reasons, low cost / free shipping and to avoid paying custom duty. There are however honest people who use EMS / free shipping for saving on shipping but attach a proper genuine invoice.

What many don’t know and what custom officials will never tell you is that EMS / free shipping has value limit of ₹2000 or $30 and anything above that will attract custom duty, fine, penalty etc, etc.

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The rule says Dutiable articles intended for personal use, imported by post or air are restricted to value limit of ₹2000 (CIF). If value is more the product are liable for confiscation or importer under section 111 (d) of the customs act 1962 will be liable to pay fine & penalty under section 112 (a) (i) & section 125 of the customs Act 1962 respectively.

India EMS custom duty letter

To better understand here are some Examples (I am sure many of you might have experienced this).

1) A person imports a $100 product and opts for EMS / free shipping with Invoice of $25 – now say the person gets lucky and gets the products delivered free of cost.

2) The same person imports a $100 product next time and opts for EMS / free shipping with Invoice of $25 – This time not so lucky, custom officials cross checks. They will send a letter stating that the product has been detained, The person will need to visit the custom office. A lot of his time will be wasted there. There they will come to a conclusion that the product price is $100. So the person ends up paying custom duty, fine, penalty, total value includes total cost with shipping + shipping again + other charges etc, in all it comes to $100 – the person ends up paying $100 as legal custom duty + fine + penalty etc. So in all for a $100 product the person ends up paying $200.

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3) The same person imports a $100 product again and this time also opts for EMS / free shipping but with proper invoice value i.e. $100. Because he thinks that the last time he had to pay the fine was because of undervalued invoice, so this time he tries to be honest. Unfortunately even this time the person will end up paying $100 as legal custom duty + fine + penalty etc – so for $100 product the person end up paying $200.

Hence avoid using EMS for products that are priced over $30. The other option is to use DHL or Fedex for high value products – now these shipping options cost extra money, you will need to pay custom duty (handled by the DHL guys) and there are some extra charges too, still much cheaper than using EMS. You will need to pay the custom duty to the DHL / Fedex guy at the time of delivery.

Since these express services (DHL/Fedex) cost anywhere from $20 and over depending on the product weight, it makes sense to use it only for high value products.

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By Rajeev Rana

Founder and Chief Editor - gogi.in