If I claim a VAT refund when leaving the EU, is it mandatory to pay customs duty for it when I land in India, or should I pay it later on, or is it exempt?

If I don't claim a VAT refund, do I still have to pay customs duty upon landing in India?

  • 2
    VAT and Duties are not (directly) related. – CMaster Jul 3 '18 at 12:47
  • @CMaster Duty is based on purchase price, and VAT is part of purchase price, so they do have some interdependency. – Jim MacKenzie Jul 4 '18 at 14:45

You always have to declare anything you are importing, even if you are below an exemption limit. Exemptions create immunity from tax and duty, not an immunity from the responsibility to declare.

I would declare the goods at the value with the expected tax refund deducted, and advise the border officer that I have done so. If this is erroneous (technically, you won't have received a tax refund yet), the border officer will tell you.

I know you're discussing India, but coming into Canada bringing goods from North Dakota, a U.S. state that allows Canadians a sales tax refund, I declare net of refund and advise that I've done so, and I've always been permitted. Granted, at the border crossings in my province of Canada, the officers are well aware that these refunds exist and this probably helps.

Always declare, and ask about the refund's effect. In most countries, border officers are cooperative enough to walk you through the process.

  • I'm really not convinced you have to declare everything you import if you remain under the allowance thresholds, though this may vary by jurisdiction. I think customs officers would soon be tired if everyone who bought cigarettes or alcohol abroad came to them... – jcaron Jul 3 '18 at 16:28
  • Canada's officers are quite emphatic that they must be declared. If you mean the "Nothing to declare" lines at many airports (Canada doesn't do it this way), then I'd agree - but if seeing an officer in person, absolutely all must be declared. – Jim MacKenzie Jul 3 '18 at 16:45

Whether you claim a VAT refund or not, taxes and duties may be due on import in your destination country, depending on the type of item and its value (or more accurately, the total value of the imports).

Some countries have allowances under which you are exempt, but if the value is high enough to reclaim VAT you are most certainly above the threshold.

In most cases the destination country will not be aware of the VAT refund. There are exceptions when using land borders (on roads, or on board trains), where customs officers of the destination country will see you having done some paperwork with the customs officers of the departing country and will of course have questions for you, but this is not the case here. This does not mean you should try to sneak past customs...

  • +1 for "This does not mean you should try to sneak past customs..." – Henrik Jul 3 '18 at 18:32

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