Customs Value of Imports: How Freight and Insurance Are Added (Rule 10(2))
Your customs value is not only the price on the invoice. Freight and insurance to the port of import are added. Here is what the rule says when you cannot show those costs.
- Rule 10(2) of the Customs Valuation Rules, 2007, as substituted by Notification No. 91/2017-Customs (N.T.) dated 26 September 2017.
- The value includes transport, loading, unloading and handling up to the place of importation, and the insurance up to that place.
- If freight is not ascertainable it is taken at 20 per cent of FOB. If insurance is not ascertainable it is taken at 1.125 per cent of FOB.
- What does the rule say should be in the customs value?
- What is the "place of importation"?
- What if I cannot show the freight cost?
- What if I cannot show the insurance cost?
- Is there a limit for air cargo?
- What about goods transshipped to another Indian customs station?
- What counts as transport cost?
- Why does this matter to me?
- Is this the full valuation law?
- Can you check the value on my Bill of Entry?
What does the rule say should be in the customs value?
The notification substitutes sub-rule (2) of Rule 10. For the purposes of Section 14(1) of the Customs Act, 1962 and the Rules, the value of the imported goods includes (a) the cost of transport, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation, and (b) the cost of insurance to the place of importation.
What is the "place of importation"?
The notification adds a definition in Rule 2: the customs station where the goods are brought for being cleared for home consumption or for being removed for deposit in a warehouse.
What if I cannot show the freight cost?
If the cost in clause (a) is not ascertainable, it is taken as twenty per cent of the free on board (FOB) value of the goods. If the FOB value is not ascertainable but the sum of FOB and the insurance cost is, the freight is taken as twenty per cent of that sum.
What if I cannot show the insurance cost?
If the cost in clause (b) is not ascertainable, it is taken as 1.125 per cent of the FOB value. If the FOB value is not ascertainable but the sum of FOB and the freight cost is, the insurance is taken as 1.125 per cent of that sum.
Is there a limit for air cargo?
Yes. For goods imported by air, where the cost in clause (a) is ascertainable, it shall not exceed twenty per cent of the FOB value of the goods.
What about goods transshipped to another Indian customs station?
For goods imported by sea or air and transshipped to another customs station in India, the cost of insurance, transport, loading, unloading and handling charges associated with that transshipment is excluded.
What counts as transport cost?
The Explanation says the cost of transport includes ship demurrage charges on chartered vessels, and lighterage or barge charges.
Why does this matter to me?
- Your assessable value, and so your duty and IGST, rises with freight and insurance. See our post on how import duty and IGST are worked out.
- Keep the freight invoice and the insurance certificate with your documents, so the actual cost can be shown instead of the default.
- Check your marine insurance certificate for the value and premium.
Is this the full valuation law?
No. This post covers only the rule changed by the 2017 notification. Rule 10(2) sits within the wider Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and Section 14 of the Customs Act. Later amendments may exist, so check the current Rules on cbic.gov.in.
Can you check the value on my Bill of Entry?
Yes. Send us the invoice, the freight bill and the insurance certificate. We will check how the value has been worked out. We are just a call and a message away.
- Indian Customs (CBIC): Notification No. 91/2017-Customs (N.T.) dated 26 September 2017, amending the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007
- Indian Customs (CBIC): current Customs Valuation Rules
Every fact here is taken from Government of India sources, as we read them on 12 November 2026. Please confirm against the original notification for your own shipment before you act. Rules change, and the right answer depends on your product, origin and destination.
Not sure how this applies to your shipment? Send us the product and the route. A call or a message is all it takes, and we are with you at every step of the way, whether you are importing or exporting.
Office (backup): +91 93733 11838
Multimodal Logistic Systems Pvt. Ltd., Pune, India. Written by Shankar Jha. We are consultants, not a law firm. This post is general information.