Customs and foreign trade: answers to common questions
IEC registration, customs duty, export incentives, and customs notices and appeals. Each answer gives the short answer first, then the detail and the legal basis.
Imports, exports and customs
Who needs an Importer Exporter Code (IEC), and how is it obtained and kept active?
Anyone importing or exporting goods needs an Importer Exporter Code from DGFT, and so does an exporter of services claiming benefits under the Foreign Trade Policy. It is applied for online on the DGFT portal with the business PAN, for a fee of ₹500, and is issued at once. The IEC must be updated online every year between April and June, even if nothing has changed; otherwise it is deactivated.
Read the full answer · Reviewed 8 November 2026
How is customs duty on imports worked out?
Customs duty is charged on the assessable value, usually the CIF value (cost, insurance and freight) converted at the exchange rate notified by CBIC. On it come basic customs duty at the tariff rate for the 8-digit tariff item, the social welfare surcharge where it applies, and then IGST (and any compensation cess) on the value plus those duties. IGST paid on import can be claimed as input tax credit; basic customs duty cannot.
Read the full answer · Reviewed 8 November 2026
What are RoDTEP and duty drawback for exporters?
Duty drawback refunds customs duty paid on imported inputs used in exports, at all-industry rates or a brand rate. RoDTEP refunds taxes built into export prices that are not refunded otherwise, such as VAT on fuel and electricity duty, as transferable e-scrips. Both are claimed in the shipping bill. RoDTEP now runs to 31 December 2026 for all exporters, including advance authorisation holders, EOUs and SEZs.
Read the full answer · Reviewed 8 November 2026
How do I respond to a customs show cause notice, and how does a customs appeal work?
A customs demand must be raised within two years, or five where there is collusion, wilful misstatement or suppression. Paying duty and interest before the notice closes most non-fraud cases. Appeals go to the Commissioner (Appeals) within 60 days with a 7.5% pre-deposit, and then to CESTAT within three months, with the pre-deposit raised to 10% in all, capped at ₹10 crore at each stage.
Read the full answer · Reviewed 8 November 2026