Budget 2025 Update: The move did not impact import duties on new cars and SUVs priced above USD 40,000, which remains unchanged despite revisions in the duty structure as announced in Budget 2025. That said, the effective duty on motorcycles has come down.Customs Duty on basic reduced from 125 percent to 70 percent40 percent agricultural cess has been added Social Welfare Surcharge 10 percent fully abolished
In the Union Budget 2025 this year, the duty on BCD (Basic customs duty) on vehicles (trucks also) greater than USD 40,000 was decreased from 125% to 70%. Additionally, these vehicles are not being charged SWS (Social Welfare Surcharge) of 10 percent when imported. Although this should bring a little bit of happiness to new car buyers, the bad news is, it actually doesn’t as the Government of India has placed AIDC (Agriculture and Development Cess) in the duty structure of the cars, nullifying the benefits of SWS exemption.
A year or two back, AIDC had been proposed in the Union Budget to develop agricultural infra. From the customs side, AIDC was first implemented on gold, silver, alcoholic beverages and crude palm oil. Vehicles previously did not have AIDC; however, now the effective duty rate calculation needs to be ascertained after considering the AIDC.
It was also a sort of structural adjustment in terms of taxation aimed at increasing the revenue of the central government. BCD is a concurrent subject between the centre and the states. But the AID is a central government charge: one that is entirely pocketed by the centre.
At the same time, effective duty on motorcycles has been cut. As far as cars are concerned, the BCD of up to 30% on import of motorcycles including complete built units (CBUs), semi-knocked down (SKD) and completely knocked down (CKD) units has been cut. Meanwhile, AIDC is not applicable on the import of motorcycles, unlike cars.