Expats who have an employment visa are allowed to import one vehicle. New cars must have an engine capacity under 1600cc; there is no limit on the engine capacity if you have owned your car for more than one year. Most expats find it cheaper to simply buy or lease a car, as customs duties are huge, at approximately 181% of the value assessed.
Cars in India hold their value fairly well compared to other countries. Depreciation for used cars is calculated as follows:
- 1st year – 16%
- 2nd year – 12%
- 3rd year – 10%
- 4th year – 8%
- 5th year – 8%
- 6th year – 8%
- 7th year – 8%
By and large the ex-factory price on the date of original purchase is taken into account when assessing the duty on a motor vehicle. Customs duty has to be paid in convertible foreign exchange.
Breakdown of Customs Duty:
- Basic Customs Duty 40%
- Special Customs Duty 5%
- Additional Duty 40%
- M.V. Cess 0.125%
- Special Additional duty of Customs 4%
This is subject to an overall limit of 70%
Procedure/rules for importing your car to India
- The vehicle to be imported must conform to the provisions of the Motor Vehicles Act, 1988 and the rules made thereunder, as applicable, on the date of import.
- The import of new vehicles is permitted only through the Customs port at Nhava Sheva (Mumbai), Calcutta and Chennai. Import of second hand vehicles is allowed only through the customs port at Mumbai.
- The second hand or used vehicles imported into India should have a minimum roadworthiness for a period of 5 years from the date of importation into India with assurance for providing service facilities within the country during the five year period.
- The vehicle has to be submitted for testing to Vehicle Research and Development Establishment (VRDE), Ahmednagar, of the Ministry of Defense or the Automotive Research Association of India, Pune or the Central Farm and Machinery Training and Testing Institute, Budni, Madhya Pradesh, and such other agencies as may be specified by the Central Government, for granting a certificate by that agency as to the compliance of the provisions of the Motor Vehicles Act, 1988 and any rules made thereunder.
On import of the vehicle into the country, it should be registered in the name of the importer. The importer may also be required to execute a bond for an amount equal to the customs assessed value of the vehicle.
It’s easiest to go through an agency rather than trying to sort the bureaucratic process out yourself. Some companies that provide car import facilities into India are: