Containers and shipping
CIF meaning: Cost, Insurance and Freight
Independent site, not a government service. General information, not customs advice.
A CIF price usually sits close to the customs value. Enter it to see duty and IGST, then use the second tool to compare it with another term.
Quick duty estimate on a customs value
Duty and IGST
₹3,09,800
| Basic Customs Duty | ₹1,00,000 |
| Surcharge, 10% of BCD | ₹10,000 |
| IGST | ₹1,99,800 |
| Share of the value | 31.0% |
Tariff rate and 10% surcharge assumed; exemptions change them. General information, not customs advice.
CIF stands for Cost, Insurance and Freight, one of the four sea and inland waterway rules in the Incoterms® Rules. HMRC, in its UK guidance, describes it this way: the seller delivers the goods on board or procures goods already so delivered, must contract and pay for the freight to the named port of destination, and contracts for insurance against the buyer's risk during carriage. The risk passes when the goods are on the ship, although the seller pays for the voyage. The cover is only a minimum one, and a buyer who wants more must agree it expressly or arrange its own. In Indian customs language, CIF is often used as shorthand for the value on which duty is charged. The Chennai Customs guide describes assessable value as the cost, insurance and freight value of the goods. So a CIF invoice is often close to the customs value, as long as the amounts are genuine and no additions under rule 10 apply.
Does your invoice price cover freight and insurance?
Starting customs value
₹5,00,000
| Freight added | No, in the price |
| Insurance added | No, in the price |
| What to look at: Freight and insurance are in the price. | |
Our summary of how each rule splits costs, for customs value only. Check your contract.
Tariff and rules read by Radif Partners · Editorial policy · Method and sources
A CIF invoice, line by line
On ₹10,00,000 CIF with 10% duty and 18% IGST: duty ₹1,00,000, surcharge ₹10,000, IGST ₹1,99,800, for a total of ₹3,09,800. The tool at the top lets you change those rates.
Who bears what
| Item | Paid by | Risk with |
|---|---|---|
| Delivery on board at origin | Seller | Seller, until on the ship |
| Freight to the named port | Seller | Buyer, once on the ship |
| Insurance, minimum cover | Seller | Taken out against the buyer's risk |
The guidance places import clearance and duty on the seller only under DDP, so plan on paying them yourself on a CIF sale. It does not say who pays charges at the Indian port: ask before you agree.
What to watch out for
- Port name. A named port is what the seller pays freight to. If your depot is inland, the cost beyond that port is outside the term.
- Air. This is in the sea group of rules. For other transport, the matching entry in the guidance is CIP, with the same minimum cover.
- Declared amounts. In our reading of rule 10(2), if an invoice shows CIF but you pay freight separately, customs value may be higher than the invoice suggests.
The basis for valuation is rule 10(2), the description of assessable value comes from the Chennai Customs guide, and the rule from the HMRC guidance. Compare the FOB page, and run the full sum in the calculator.