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The Baggage Rules, 1998 provides various limits for an Indian resident returning from abroad or a foreigner coming to India for duty free baggage.

1. Introduction

With the liberalisation of visa rules, there has been a tremendous increase in tourists in India as well as Indian residents touring abroad. Tourism without shopping is incomplete, however, when shopping abroad, care has to be taken on account of additional cost of customs duty back home when you return to India, especially when the rate of duty is as high as 40% plus an Education Cess @ 2%. Well, there is a silver lining to this problem and that is duty free allowances (i.e. Articles allowed to be imported free of duty).

Levy of customs duty on accompanied or unaccompanied baggage is governed by the Baggage Rules, 1998 as amended from time to time. "Baggage" for the purpose of levy of customs duty means possession or belongings (articles) of a person, carried by or accompanied or unaccompanied with the person while arriving at a particular custom station either by air or sea or otherwise.

The quantum of duty free allowances depends upon the age of the traveller, duration of stay abroad and the country from which he returns. Separate rules are prescribed for crew-members of a vessel or an aircraft. It may be noted that Baggage Rules are applicable to import of items as a part of bona fide baggage of the passenger, and not on import of articles without foreign travel. Let us study these rules in detail.

2. Duty Free Entitlements in General
   
   In general, used personal effects, excluding jewellery, required for satisfying daily necessities of life in respect of any passenger are allowed to be imported free of duty. Over and above personal effects, following articles forming part of Annexure III of the Baggage Rules, are allowed to be imported free of duty as a part of bona fide baggage of the passenger:

1. Video Cassette Recorder or Video Cassette Player or Video Television Receiver or Video Cassette Disk Player.

2. Washing Machine.

3. Electrical or Liquified Petroleum Gas Cooking Range.

4. Personal Computer (Desktop Computer).

5. Laptop Computer (Notebook Computer).

6. Domestic Refrigerator of capacity up to 300 litres or its equivalent.

3. General Exclusion from Duty Free Allowances

Following items are not covered in the various limits of duty free entitlements, which means that they can otherwise be imported on payment of duty.

(i) Fire arms; (ii) Cartridges of fire arms exceeding 50; (iii) Cigarettes exceeding 200 or Cigars exceeding 50 or tobacco exceeding 250 gms; (iv) Alcoholic liquor and wines in excess of two litres; (v) Gold or silver, in any form, other than ornaments.

In other words, Cigarettes upto 200 Nos. or Cigars upto 50 Nos. tobacco up to 250 gms and Alcoholic liquor or wine upto two litres can be brought in India by a passenger without payment of duty.

4. Import of Jewellery

An Indian passenger who has been residing abroad for over one year can import jewellery upto an aggregate value of Rs. 10,000/- in case of a male passenger and Rs. 20,000/- in case of a female passenger.

5. Duty Free Entitlements for an Indian Resident or a Foreigner Residing in India

A person resident in India is defined to mean, "a person holding a valid passport issued under the Passports Act, 1967 and normally residing in India. An Indian resident or a foreigner residing in India, when returning from a foreign trip, he is allowed to import following articles free of duty:

1. If a passenger is coming from countries other than -
   (a) Nepal, Bhutan, Myanmar or China or (b) Pakistan by Land Route, then his duty free entitlements are as follows:-

Duty Free Entitlement		For Passengers of age
		12 years and above	Below 12 years
(i) Used personal effects  (excluding jewellery) required for satisfying daily necessities of life.		Free	Free
(ii) Other articles carried on the person or in the accompanied baggage.
(a)	Stay abroad for more than three days	Rs. 25,000 (in value)	Rs. 6,000 (in value)
(b)	Stay abroad upto three days	Rs. 12,000 (in value)	Rs. 3,000/ (in value)

2. If a passenger is coming from Nepal, Bhutan, Myanmar or China, other than by land route, or in case of Pakistan by land route then his duty free entitlements are as follows:
   
   Duty Free Entitlement For Passengers of age

Duty Free Entitlement		For Passengers of age
		12 years and above	Below 12 years
(i) Used personal effects (excluding jewellery) required for satisfying daily necessities of life.		Free	Free
(ii) Other articles carried on the person or in the accompanied baggage.
(a)	Stay abroad for  more than three days	Rs. 6,000 (in value)	Rs. 1,500 (in value)
(b)	Stay abroad upto three days	Nil	Nil

3. If a passenger is coming from Nepal, Bhutan, Myanmar or China by Land Route then his duty free entitlements are as follows:

Duty Free Entitlement	For Passengers of age
	12 years and above	Below 12 years
(i) Used personal effects (excluding jewellery) required for satisfying daily necessities of life.	Free	Free
(ii) Other articles	Nil	Nil

It may be noted that a passenger is not allowed to pool free allowance of any other passenger if his own limits are exhausted.

6. Professionals returning to India

An Indian passenger who was engaged in his professional capacity abroad is given an additional duty free entitlements of following articles forming part of his bona fide baggage. This allowance is over and above what is otherwise allowed to all types of passengers as mentioned in paragraph 15.10.5 above.
 

(a)	Indian passenger returning after atleast 3 months	(i)	Used household articles (such as  linen, utensils, tableware, kitchen, appliances and an iron) upto an aggregate value of Rs. 12,000.
		(ii)	Professional equipment upto a value of Rs. 20,000.
(b)	Indian passenger returning after at least 6 months	(i)	Used household articles (such as  linen, utensils, tableware, kitchen, appliances and an iron) an aggregate value of Rs. 12,000.
		(ii)	Professional equipment upto a value of Rs. 40,000.
(c)	Indian passenger returning after a stay of a minimum of 365 days during the preceding two years on termination of his work and who has not availed this concession in the preceding three years.	Used household articles (such as  linen, utensils, tableware, kitchen, appliances and an iron) and  personal effects (which have been  in the possession and use abroad of the passenger or his family for  at least six months) and which  are not mentioned in Annexure - I or Annexure - II or Annexure - III upto an aggregate value of Rs. 75,000 (including one unit each of specified articles on payment of 30% duty).

Notes:-

1. For Annexure I - refer paragraph 3
    

2. Annexure II contains following items:-
   
   (i)Colour Television or Monochrome Television; (ii) Digital Video Disc Player; (iii) Video Home Theatre System; (iv) Dish Washer; (v) Music System; (vi) Air-Conditioner; (vii) Domestic refrigerators of capacity above 300 litres or its equivalent; (viii) Deep Freezer; (ix) Microwave Oven; (x) Video camera or the combination of any such video camera with one or more of the following goods. namely:- (a) Television Receiver; (b) Sound recording or reproducing apparatus; (c) Video reproducing apparatus: (xi) Word Processing Machine; (xii) Fax Machine;
   (xiii) Portable Photocopying Machine. (xiv) Vessel; (xv) Aircraft; (xvi) Cinematographic films of 35 mm and above; (xvii) Gold or Silver, in any form, other than ornaments.
    

3.  For Annexure III refer paragraph 2
    

4. "Professional equipment" means such portable equipments, instruments, apparatus and appliances as are required in his profession, by a carpenter, a plumber, a welder, a mason, and the like and shall not include items of common use such as cameras, cassette recorders, dicta-phones, personal computers, typewriters, and other similar articles.

7. Tourists Visiting India

A tourist is a passenger

1. who is not normally a resident in India;

2. who enters India for a stay of not more than six months in the course of any twelve months period for legitimate non-immigrant purposes, such as: touring, recreation, sports, health, family reasons, study, religious pilgrimage, or business:

A tourist arriving in India shall be allowed clearance free of duty articles in his bona fide baggage to the extent as mentioned below:-
 

		Articles allowed free of duty
I.	Tourists of Indian origin other than those coming from Pakistan by land route	Used personal effects and travel souvenirs, if -
		(a)	These goods are for personal use of the tourist, and
		(b)	These goods, other than those consumed during the stay in India are re-exported when the tourist leaves India for a foreign destination.
		(ii)	Articles as allowed to be cleared under rule 3 or rule 4 of the Baggage Rules 1998 (that is duty free allowances applicable to Indian Resident).
II	Tourists of foreign origin other than those of Nepalese origin coming from Nepal or of Bhutanese origin coming from Bhutan or of Pakistani origin coming from Pakistan	(i)	used personal effects and travel souvenirs, if -
			(a)		These goods are for personal use of the tourist,  and
			(b)		These goods,  other than those consumed during the stay in India are re-exported when the tourist leaves India for a foreign destination.
		(ii)	Article upto a value of Rs. 8,000 for making gifts.
III	Tourists of Nepalese origin coming from Nepal or of Bhutanese origin coming from Bhutan.	No free allowance.
IV	Tourists of Pakistani origin or foreign tourists coming from Pakistan or tourists of Indian origin coming from Pakistan by land route	(i)		used personal effects and travel  souvenirs, if -
				(a)	These goods are for personal use of the tourist, and
				(b)	These goods, other than those consumed during the stay in India and re-exported when the tourist leaves India for a foreign destination.
		(ii)		Articles upto a value of Rs. 6,000 for making gifts.

8. Transfer of Residence

A person, who is transferring his residence to India, is allowed normal duty free entitlements as mentioned in paragraph 15.10.5. In addition, following articles forming part of his bona fide baggage are allowed, once in three years, to the extent mentioned below. Import of baggage under Transfer of Residence Rules, in excess of limits specified hereinbelow is allowed at the concessional duty of 15 per cent ad Valorem + 2% Education Cess against the normal duty of 30 per cent.
 

Articles allowed free of duty		Conditions		Relaxation that may be considered
(a)	Used personal and household articles, other than those listed at Annexure I or Annexure II, but including the article listed at Annexure III at (Refer Notes Para 15.10.6) jewellery upto ten thousand rupees by a gentleman passenger or rupees twenty thousand by a lady passenger.	(1)	Minimum stay of two years abroad, immediately preceding the date of his arrival  on TR.	(a)	For condition (1) Shortfall of upto 2 months in stay abroad can be condoned by Assistant
		(2)	Total stay in India on short visit during the 2 preceding years should not exceed 6 months, and	Commissioner of Customs or Deputy to Commissioner of Customs if the early return is on account of :
		(3)	passenger has not availed this concession in the preceding three years.	(i)	terminal leave or  vacation being  availed of by the passenger; or
				(ii)	any other special circumstances
				(b) For condition (2)
				Commissioner of Customs may condone short visits in excess of 6 months in deserving cases.
				(c) For condition (3)
				No relaxation
(b)	Jewellery taken out earlier by the passenger or by a member of his family from India.	Satisfaction of the - Asstt. Commissioner of Customs  regarding the jewellery having been taken out earlier from India.

Rate of duty applicable on transfer of Residence

Rate of duty applicable to persons specified in clause (a) and (b) below is as follows :

1. Clearance of items listed in Annexure-II (Refer Note (b) to para 6), whether old or new, at a concessional rate of duty of 15% ad-valorem + 2% educational cess.

2. Clearance of items listed in Annexure-III (Refer para 2) free of duty.

Following categories of people are eligible for concessional rate of duty on transfer of residence:-

1. any person holding a valid passport under the Passport Act, 1967 and returning to India after having stayed abroad for atleast 365 days during the two years immediately preceding the date of arrival in India.

The concessional rate of duty is subject to the following conditions:-

1. Such person has been working abroad and is returning to India on termination of such work after having stayed abroad for at least 365 days during the two years immediately preceding the date of arrival in India;

2. Such person affirms by a declaration that the goods have been in his possession abroad or, the goods are purchased by such person at the time of his arrival, but before clearance from customs, from the duty free shop located in the arrival hall of the International airport;

3. The goods (other than those purchased from the duty free shops at the time of arrival of such passenger) not accompanying such passenger were shipped or dispatched or arrived within the time limits specified in the Baggage Rules, 1998; and

4. In respect of such goods not more than one unit shall be permissible to such person and the total aggregate of value of such goods including other goods imported free of duty by him under Rule 5 of the Baggage Rules, 1998, shall not exceed rupees seventy five thousand.

2. any person on bona fide transfer of residence to India

The concessional rate of duty is subject to the following conditions:-

1. Such person has been residing abroad for a minimum period of two years immediately preceding the transfer of residence and has not availed this concession in the preceding three years;
    

2. Such persons affirms by a declaration that the goods have been in his possession abroad or, the goods are purchased by such person at the time of his arrival, but before clearance from customs, from the duty free shop located in the arrival hall of the International airport;
    

3. The goods (other than those purchased from the duty free shops at the time of arrival of such passenger) not accompanying such passenger were shipped or dispatched or arrived within the time limits specified in the Baggage Rules, 1998;
    

4. Not more than one unit of each item of such goods shall be permissible per family and the person claiming the benefit shall affirm by a declaration that no other member of the family had availed of or would avail of such benefit in respect of that item; and
    

5. The total aggregate value of such goods shall not exceed rupees five lakhs.

9. Unaccompanied Baggage

Provisions discussed above except for paragraph 15.10.5 are applicable to unaccompanied baggage as well, provided the following conditions are satisfied:

1. The unaccompanied baggage had been in the possession abroad of the passenger and is dispatched within one month of his arrival in India or within such further period as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow.
    

2. The unaccompanied baggage may land in India upto 2 months before the arrival of the passenger or within such period, not exceeding one year, as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow, for reasons to be recorded, if he is satisfied that the passenger was prevented from arriving in India within the period of two months due to circumstances beyond his control such as sudden illness of the passenger or a member of his family, or natural calamities or disturbed conditions or disruption of the transport or travel arrangements in the country or countries concerned or any other reasons, which necessitated a change in the travel schedule of the passenger.
    

3. Unaccompanied baggage is chargeable to custom duty @ 40% ad valorem plus 2% education cess.

10. Detained Baggage and Mishandled Baggage

Detained Baggage

A passenger may request the Customs to detain his baggage either for re-export at the time of his departure from India or for clearance subsequently on payment of duty.

The detained baggage would be examined and full details will be inventorised.

Such baggage are kept in the custody of the Customs.

Mishandled Baggage

In case the baggage has been lost or mishandled by the Airlines, a simplified procedure is in place for clearance of such baggage which allows the passenger to have delivery of his baggage at his door step by the Airlines.

There is no need to handover the passport or the keys of the baggage. The passenger is merely required to complete the Customs declaration form at counter No. 1 authorizing the Airline to complete the formalities when the baggage arrives. The passenger is required to obtain a certificate to that effect from the Airlines and get it countersigned by Customs indicating specifically the unutilized portion of the free allowance. This would enable the passenger to avail of the unutilised portion of the duty free allowance when his baggage is delivered by the Airlines.

11. Baggage Rules for members of Crew

Members of Crew engaged in a foreign going Vessels can take advantage of duty free entitlements under the Baggage rules for import of their baggage only at the time of final pay off on termination of their engagement. However, it is provided that crew members of a Ship or an Aircraft are allowed to bring items like Chocolates, Cheese, Cosmetics and other petty gift items for their personal or family use which shall not exceed Rs. 600.

12. Import of Gold or Silver

Any person who is a citizen of India holding a valid passport under the Passport Act, 1967 or a person of Indian origin returning to India after having stayed abroad for a period of more than six months can import gold and silver without any limit. The applicable customs duty on gold is @ Rs.10/- per gm for a 100 gm bar and for a Tola bar it is Rs. 250 per 10 gm and on silver it is @ Rs. 500/- per kg. Other conditions to be fulfilled are as follows :-

1. The duty shall be paid in convertible foreign currency.
    

2. The weight of gold and silver(including ornaments) should not exceed 10 kgs. and 100 kgs respectively per passenger.
    

3. The passenger should not have brought gold/silver or other ornaments during any of his visits (short visits) in the last six months i.e. he has not availed of the exemption under this scheme, at the time of his short visits.
    

4. Ornaments studded with stones and pearls are not allowed to be imported.
    

5. The passenger can either bring the gold/silver himself at the time of arrival or import the same within fifteen days of his arrival in India as unaccompanied baggage.
    

6. The passenger can also obtain the permitted quantity of gold/silver from Customs bonded warehouse of the State Bank of India and Metals and Minerals Trading Corporation subject to conditions (i) and (ii)above. He is required to file a declaration in the prescribed Form before the Customs Officer at the time of arrival in India stating his intention to obtain the gold from the Customs bonded warehouse and pay the duty before clearance.

13. Import of Passenger Cars

The following rates of duty are applicable for import of motor cars and other motor vehicles principally designed for the transport of persons including station wagons and racing cars. Since motor vehicles are excluded from the definition of Baggage, duties are to be collected at the Tariff rate taking into consideration Exemption Notifications if any. The present rates are as under:
 

Vehicle		Basic Customs Duties	Other Duty
New, which have not been registered anywhere prior to importation-			CVD - 16% SAD - 8% CESS - .125 % NATIONAL CALAMITY FUND - 1%
(a)	if imported as Completely knocked down (CKD) Unit	20%	EDUCATIONAL CESS ON BCD & CVD - 2%
(b)	if imported in any other form	60%	-do-
Other i.e. already registered		105%	-do-

As per the above rates of duty, the duty incidence on a new imported vehicle in completely built up form comes to 103.39%.

Value of these vehicles for the purpose of levy of customs duty is CIF value, where C stands for the cost of the goods, I is the insurance and F is the freight. Cost in the case of new vehicle is the transaction value between the seller and the buyer. However, in the case of old and used vehicles, cost is arrived at by taking value of the new vehicle in its year of manufacture and then allowing depreciation at following rates.
 

(i)	For every quarter during 1st year	4%
(ii)	For every quarter during 2nd year	3%
(iii)	For every quarter during 3rd year	2.5%
(iv)	For every quarter during 4th year and thereafter	2% subject to a maximum depreciation of 70%

14. Passenger Travelling Abroad

An outbound passenger can take all bona fide personal effects and new items of personal effects alongwith him or unaccompanied within one year before or after the passenger's departure from India. However, items of negative list will require a license for which one need to refer to Import-Export policy and amendments thereto from time to time.

If a person traveling abroad is carrying on some expensive items, say, jewellery, laptop, etc., which he intends to bring back on his return journey, then he must take care to obtain export certificate so that no duty is levied while bringing back these items at the time of arrival in India.

15. Foreign Exchange as part of baggage

Although import or export of foreign exchange (includes foreign currency bank notes, traveler's cheques, etc.) does not form part of Baggage Rules, it would be wise to know provisions governing the same. Restrictions are placed on export of foreign exchange under the Foreign Exchange Management Association, (FEMA) 1999.

An outbound passenger can take foreign exchange only to the extent it is permitted under FEMA. At present, a passenger can avail USD 10,000/- or its equivalent in one calendar year for overseas travel under the Basic Travel Quota. Different limits are prescribed for different purposes. One can always approach RBI to draw exchange in excess of the prescribed limits.

As far as an inbound passenger is concerned there is no limit on import of foreign exchange provided, a declaration is made in form CDF (Currency Declaration Form) if the value of such currency exceeds US $ 10,000 or its equivalent (in the form of currency notes, bank notes or traveler's cheques) and US $ 5,000 (in the form of foreign currency notes) or its equivalent. There is no limit on import of foreign coins. One, however, needs to adhere to time limits for surrender of unspent foreign exchange as provided in the FEMA regulations. An Indian resident, however, can now hold foreign currency up to US $ 2,000/- for an indefinite period as also foreign coins without any limit acquired for numismatic purpose.
 

16. Export and Import of Indian Currency

A person resident in India can take out of India (other than for travel to Nepal and Bhutan) Indian currency notes up to an amount not exceeding Rs. 5,000/- per person. Similarly, he can bring an amount up to Rs. 5,000/- while returning from a foreign trip.

17. Procedure for Clearance of Incoming Passengers

The customs authorities have prescribed a two-channel system for Customs Clearance of passengers arriving in India:

1. Green Channel for passengers not having any dutiable goods.
    

2. Red Channel for passengers having dutiable goods.

However,

1. All the passengers shall ensure to file correct declaration of their baggage.
    

2. Green channel passengers must deposit the Customs portion of the disembarkation card to the Custom Official at the gate before leaving the terminal.
    

3. Declaration of foreign exchange/currency has be made before the Custom officers in the following cases :

1. where the value of foreign currency notes exceed US $ 5000 or equivalent
    

2. where the aggregate value of foreign exchange including currency exceeds US $ 10,000 or equivalent
   - Passengers walking through the Green Channel with dutiable/prohibited goods are liable for prosecution/penalty and confiscation of goods.
   - Trafficking of Narcotics and Psychotropic substances is a serious offence and is punishable with imprisonment.