When you are a car aficionado, you are likely to fall in love with a model that is amazing but not found in India. And if you are not constrained by a budget, you can bring such a car home too. However, importing cars to India can be a time-consuming and expensive process. Which is why, you need to be financially sound and more, to be able to import your dream car, given the regulatory hurdles and hoops along the way. And of course, you will need comprehensive car insurancefor the same, strengthened further with add-ons, for holistic protection against unforeseen events.
Now, here’s what you must know when importing a car to India:
1. Fundamental rules
- The car must be a right-hand drive. Left-hand drive cars are until recently banned from entering the country except for consulates, embassies, and other special cases. Now, you can import left-handed cars for testing and research purposes, given that left-hand drive is the norm in technologically advanced countries.
- The engine capacity of the car needs to be under 1000cc or over 2500cc, eliminating a large chunk of the market. Cars with engines under 1000cc will be low-cost, low-feature ones in their respective market, but become expensive if you consider import duty. On the other hand, cars with above 2500cc engines will be relatively high-end and expensive to begin with. If you add import duty to that, it will nearly double the cost.
- Newer cars must be imported only via the naval ports of Mumbai, Kolkata, and Chennai. Used cars, not older than three years from the date of manufacturing, can be imported via Mumbai only.
- The speedometer must display values in kilometres, not miles.
- The car can only be imported from the country of manufacturing. And it must be assembled or manufactured outside India.
2. Import duty
In cars where the CIF value exceeds USD 40,000 can attract an import duty of 100%. New cars of value less than USD 40,000 attract a 60% import duty. Used cars have an import duty of 125%. The import duty for completely knocked down cars can range from 15-30%, depending on the body assembly.
3. Transfer of residence
Non-resident Indians (NRIs) are allowed to import one vehicle when moving back to India permanently. You must have lived in the foreign country for at least two years to undergo the ‘transfer of residence’ process. Also, this process should not have been initiated for at least three years prior to the current initiation. The vehicle cannot be sold for at least two years after the import.
4. Who can import a commercial vehicle?
- Foreign nationals (married to an Indian)/NRIs who have not resided in India for 2 years, and have registered the car for at least a year
- The legal heir of the deceased person, to whom the car has been bequeathed
- Physically challenged persons
- Business entities in India that also have foreign equity participation and vice versa
- Charitable, religious, or missionary trusts registered in India
- Any journalist accredited to the Press Information Bureau
5. Procedure to import the foreign car
You can import a car directly from the manufacturer or through an agent, with the latter doing all the legwork, especially related to the paperwork. These are the documents you will need:
- Vehicle invoice
- Car insurance policy
- GATT declaration
- Bank draft
- Bill of Lading
- Import License
- Purchase Order/Letter of Credit
- DEEC (Duty Exemption Entitlement Certificate) / DEPB (Duty Entitlement Passbook) / ECGC (Export Credit Guarantee Corporation of India) or any other specified document
6. Things to consider before importing a vehicle
There’s the cost of the vehicle, the import duty (which can easily surpass the cost of the vehicle), insurance cost, and registration cost and road tax, which must be taken care of separately. It is a time-consuming, cumbersome, and expensive process. Be wary of unscrupulous agents looking to cut you a ‘too-good-to-be-true deal’ and only choose importers of repute. Do your due diligence to avoid the long arm of the law later. Following the above abstract will help you in getting your dream car, but be wary of additional documents, delays, and expenses.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
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