Updates on Customs Tariff and AIDC Rates Changes under India

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Dated: 01.04.2026

Updates on Customs Tariff and AIDC Rates Changes under India – UAE CEPA

The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification (F. No. CBIC-190354/31/2023-TRU) detailing changes to customs tariff rates and Agriculture Infrastructure and Development Cess (AIDC) rates for various goods. These changes, outlined in the notification, will come into effect on April 1, 2026. Below is a detailed overview of the key updates and their implications.

Overview of the Notification

The notification amends the principal notification No. 22/2022-Customs dated April 30, 2022, which was last updated by notification No. 25/2025-Customs on April 30, 2025. The new tariff rates aim to streamline customs duties and AIDC rates for a wide range of goods, including agricultural products, motor vehicles, chemicals, and metals.

Key Highlights of the Notification

1. Basic Customs Duty (BCD) and AIDC Rates 

The notification provides a comprehensive list of tariff items, their descriptions, and the updated Basic Customs Duty (BCD) and Agriculture Infrastructure and Development Cess (AIDC) rates. Here are some notable changes:

Agricultural Products:
- Tariff items such as 15071000 (All Goods) will continue to have a BCD rate of 0% and an AIDC rate of 0%.
- Tariff item 15111000 (All Goods) will have a BCD rate of 0% and an AIDC rate of 5%.
Alcoholic Beverages:
- Several tariff items under the category of alcoholic beverages (e.g., 22041000, 22042110, 22042120) will have a BCD rate of 0% and an AIDC rate of 80%.
Motor Vehicles:
- For motor vehicles imported as Completely Knocked Down (CKD) kits, the BCD rate will vary based on the assembly condition:
  - 7.5% for kits with the engine, gearbox, and transmission mechanism not pre-assembled.
  - 12.5% for kits with the engine, gearbox, and transmission mechanism pre-assembled but not mounted on a chassis or body assembly.
- For motor vehicles imported in other forms, the BCD rate will be 12% and the AIDC rate will be 8%.
Electrically Operated Vehicles:
- For incomplete or unfinished electrically operated vehicles imported as CKD kits:
  - 7.5% BCD for kits with components not interconnected or mounted on a chassis.
  - 12.5% BCD for kits with components interconnected but not mounted on a chassis.
- For other forms of electrically operated vehicles, the BCD rate will be 12% and the AIDC rate will be 8%.
Motorcycles and Cycles with Auxiliary Motors:
- For CKD kits:
  - 7.5% BCD for kits with the engine, gearbox, and transmission mechanism not pre-assembled.
  - 12.5% BCD for kits with the engine, gearbox, and transmission mechanism pre-assembled but not mounted on a body assembly.
- For other forms, the BCD rate will be 25%.
Refrigerated Motor Vehicles:
- Tariff items such as 87041010, 87041090, and others will have a BCD rate of 0% and an AIDC rate of 0%.

2. Tariff Rate Quota (TRQ) System 

The notification introduces a Tariff Rate Quota (TRQ) system for specific goods, allowing imports within a specified quantity at reduced tariff rates. Key TRQ items include:

Polyethylene (Tariff Items: 39011010, 39011020, 39011090):
- TRQ Quantity: 67,500 MT for all goods combined.
- In-quota tariff rate: 3.75%.
- In-quota AIDC rate: 0%.
Polypropylene (Tariff Item: 39021000):
- TRQ Quantity: 100,000 MT.
- In-quota tariff rate: 3.75%.
- In-quota AIDC rate: 0%.
Gold (Tariff Items: 71081100, 71081210, 71081290, etc.):
- TRQ Quantity: 200 tonnes for all goods combined.
- In-quota tariff rate: 4%.
- In-quota AIDC rate: 1%.
Copper (Tariff Items: 74081110, 74081190):
- TRQ Quantity: 125,000 MT for all goods combined.
- In-quota tariff rate: 0%.
- In-quota AIDC rate: 0%.

Implications of the Notification

Encouraging Domestic Manufacturing: The reduced BCD rates for CKD kits of motor vehicles and electrically operated vehicles aim to promote local assembly and manufacturing, aligning with the “Make in India” initiative.
Boosting Agricultural Infrastructure: The introduction of AIDC rates for certain agricultural products is intended to generate revenue for the development of agricultural infrastructure.
Facilitating Trade: The TRQ system provides an opportunity for businesses to import specific goods at reduced tariff rates, encouraging trade while maintaining control over import volumes.
Promoting Green Mobility: The differentiated tariff structure for electrically operated vehicles reflects the government’s focus on promoting eco-friendly transportation.

Effective Date

The changes outlined in this notification will be implemented starting April 1, 2026. Businesses and importers are advised to review the updated tariff rates and TRQ conditions to ensure compliance and optimize their import strategies.

Conclusion

The CBIC’s notification introduces significant changes to customs tariff rates and AIDC rates, with a focus on promoting domestic manufacturing, supporting agricultural infrastructure, and encouraging sustainable practices. Stakeholders should prepare for these changes to align their operations with the updated regulations. For further details, refer to the official notification published in the Gazette of India.

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Source: CBIC, Ministry of Finance, Govt. of India

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