We are happy to bring to you a guest post by Tejas Popat, a 2nd year student at the National University of Juridical Sciences (NUJS), Kolkata. In this post, Tejas debunks the myth that the books imported into India are expensive due to a high import duty.
Is the Import of Books into India too ‘Tax’ing? Debunking the Myth
Tejas Popat
It is widely recognized that academic books often need to be imported to make them available in India. A few years back an empirical study by Prof. Basheer and others revealed that, the latest editions of foreign educational books are available in India mostly at prices higher than those charged in the western markets. It noted that “It is obvious that Indian purchasers have to spend a significantly higher percentage of their income to purchase international editions of books, in comparison to buyers in the West”.
Often, one of the justifications given for higher prices of these books in India is the high import or customs duty incurred by the publishers. I shall demonstrate that this belief is mistaken.
When a printed book is imported from a foreign country into India, there is a customs duty of 10% levied on it under the Customs Act, 1962. This is provided for under Tariff Item 4901 10 10 of Section X Chapter 49 of The First Schedule to the Customs Tariff Act, 1975. However, no effective duty is payable. This is due to the exemption provided under Entry No: 272 of General Exemption No: 165. This is a complete exemption. One can see the effect of the exemption here and here. Hence, there is no extra burden of taxation on the importation of books as compared to their printing in India. While there is no excise duty levied on printed books published in India, there is no customs duty effectively payable on imported ones as well.
Therefore, having seen that there is no extra tax burden on publishers importing the books into India, citing it as a justification for high prices of imported books is incorrect.
Image from here
Alas! This position has changed since the Finance Act, 2017 was notified.
I am writing this comment so that others understand the consequences before ordering books from outside India.
Pre-Finance Act 2017 Position: Printed books imported (for personal or business use) fell under Section 49 (4901) of Schedule I of the Customs Tariff Act. Serial 272 of General Exemption No. 183 provided complete exemption of custom duty to printed books (whether for personal or business use). Since no excise was payable on printing books, hence no additional duty was payable on importing printed books.
Post-Finance Act 2017:
Finance Act 2017 amended Note 4 of Chapter 98 of Schedule I of Customs Tariff Act. Earlier, Entry 9804 of Chapter 98 provided for custom duty on import of dutiable items for personal use except in cases of import by courier. After the amendment of the Customs Tariff Act by the Finance Act 2017, the exception of import by courier was removed. Therefore, now all articles which are imported for personal use are subject to custom duty under Chapter 98. Printed books imported for business use will still get the exemption under General Exemption 183 and Notification 2/2017 – Central Tax (Rate) of the CGST.
Chapter 98 states it will apply to any article if all conditions stipulated therein are met notwithstanding that an article is covered under a more specific heading. Therefore, despite Chapter 49 (Entry 4901) being a more specific heading for printed books – the rules of interpretation of Customs Tariff Act states that a more specific heading will apply if an article can be grouped under more than one heading – Chapter 98 will apply because of the rules of interpretation provided under Chapter 98.
Thanks much for the above information! Am I correct then in understanding from the post and comment above that importing books into India (for the purpose of selling them) will not attract any custom/import duty?
You’re welcome! Your understanding is correct. If you have an IEC code and if you’re purchasing items for business needs (for example, law books for lawyers or for wholesale trading) then customs is exempted. If customs is exempted then no “additional duty” (that is, GST) is applicable.
Thanks so much for your response 🙂
It doesn’t seem to make much sense to me to tax on the educational books for personal use (as these books are not legally available for use)?
For books printed in India, there is a GST of 12% on printing. Earlier, the taxes would be 5%. This is nothing but a tax on knowledge.
If I send books from outside of India to a friend in India as a gift, are they subject to duty?