Importing a Car Engine to India: Understanding the Tax Implications and Requirements
Introduction
When considering the import of a car engine into India, it is crucial to understand the associated tax implications and requirements. This guide outlines the necessary details, ensuring compliance with Indian customs laws and minimizing costs.
Tax Implications on Car Engine Import
When importing a car engine to India, the tax on the engine is determined by its cost. The tax may vary if the engine is new or used. For more detailed information, contact 8692800968 via WhatsApp.
Total Customs Duty Incidence and Specific Requirements
The total customs duty on vehicles in India stands at approximately 181% of the cost of the vehicle. However, specific requirements must be met for successfully importing a car into the country.
Conditions for Car Import
Here are the conditions that must be met for importing a car into India:
The importer must have been outside India for two years before moving back: This condition ensures that the individual is considered a foreign resident. The payment for the car must be made abroad: This ensures the car is being imported from a foreign source. The car must have been in use for at least one year prior to the importer's return: This criterion ensures the vehicle is not brand new and has had previous use. The car must be imported within six months of the importer's arrival: This timeline is strictly enforced to prevent unregulated imports. Customs duty should be paid in foreign exchange: This ensures transparency and adherence to international transaction norms. The importer is free to sell the car in the open market: No restrictions apply after the importer returns to India. The importer cannot import another vehicle for five years if moving out of India: This prevents frequent movement and re-imports. Handicapped individuals can pay duties in rupees: For these individuals, the vehicle cannot be sold without government permission. Imports of spares are allowed: Up to Rs. 20000.00 per vehicle is permitted, provided a license is obtained.Guidelines for Import of New and Used Vehicles
New Imported Vehicles
For new imported vehicles, the following conditions apply:
Not manufactured/assembled in India: Ensure the vehicle has not been manufactured in India.
No previous sale, lease, or loan: Verify the vehicle has not been previously sold, leased, or loaned.
Not registered for use in any country: Confirm the vehicle has not been registered for use in any country prior to importation.
Speedometer indicating speed in km/h: The vehicle must have a speedometer indicating the speed in kilometers per hour.
Right-hand steering and controls: The vehicle must have right-hand steering and controls applicable in vehicles other than two and three-wheelers.
Photometry of headlamps: The headlamps must have proper photometry, suitable for nighttime use.
Second Hand or Used Imported Vehicles
For second-hand or used vehicles, the following conditions apply:
Not older than three years from the date of manufacture: The vehicle must not be older than three years from the date of manufacture.
Right-hand steering and controls: The vehicle must have right-hand steering and controls applicable in vehicles other than two and three-wheelers.
Speedometer indicating speed in km/h: The vehicle must have a speedometer indicating the speed in kilometers per hour.
Conform to the provisions of the Motor Vehicles Act 1988: The vehicle must conform to the provisions of the Motor Vehicles Act 1988 and any applicable rules.
Import only through specific customs ports: Second-hand or used vehicles can only be imported through the customs ports at Mumbai. Minimum roadworthiness for five years: The vehicle should have a minimum roadworthiness for a period of five years from the date of importation.Compliance and Testing Requirements
For second-hand vehicles, it is mandatory to submit the vehicle for testing to agencies such as the Vehicle Research and Development Establishment (VRDE) in Ahmednagar, the Automotive Research Association of India (ARAI), or the Central Farm and Machinery Training and Testing Institute in Budni (Madhya Pradesh).
For More Assistance and Services
Contact Adv. Vishal Yadav, Income Tax Corporate Lawyer at Lex Baselious Law Chambers for more assistance and legal compliance services.