1. 1. EASY CUSTOMS PROCESS ~~INDIA Author V
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3. 3. Customs broking / Customs brokerage is a profession that involves the "clearing" of goods through customs barriers for Importers and Exporters (usually businesses). This involves the preparation of documents and/or electronic submissions, the calculation and payment of taxes, duties and excises, and facilitating communication between government authorities and importers and exporters. Custom brokers may be employed by or affiliated with freight forwarders, independent businesses, or shipping lines, importers, exporters, trade authorities, and customs brokerage firms. Customs brokers play the key role in the import of goods. All the good imported into India have to pass through the procedure of customs clearance as they cross Indian border. The goods are examined, appraised, evaluated and then allowed to be taken out of charge of customs for use by the Importer. The entire process of customs clearance is complex and to carry out this procedure smoothly, the help of accredited customs clearing agent may have to be taken. The customs clearing agent are licensed by the customs house. Each custom house agent (CHA) has a license / registration number and identity card. 3
4. 4. 4 IEC Copy Mandatory Signed invoice Mandatory Packing list Mandatory Bill of Lading or Delivery Order/Airway Bill Mandatory Cargo Arrival notice Mandatory GATT declaration form duly filled in Mandatory DGFT Declaration duly filled in Mandatory Importers/CHAs declaration Mandatory RMS Checklist Optional License wherever necessary Optional only if required Letter of Credit/Bank Draft/wherever necessary Optional only if required Insurance document Optional only if required Import license Optional only if required Industrial License, if required Optional only if required Test report in case of chemicals / Fabrics Optional only if required Adhoc exemption order Optional only if required DEEC Book/DEPB in original Optional only if required Catalogue, Technical write up, Literature in case of machineries, spares or chemicals as may be applicable Optional only if required Separately split up value of spares, components machineries If Required Certificate of Origin, SAPTA if preferential rate of duty is claimed If Required E-sugam Mandatory
5. 5. 5 There are generally three kinds of Bills of Entry :- Home consumption Bill of entry : This has to be filed when the importer wants to clear the goods on payment of duty and remove them to his premises immediately. Into bond Bill of entry It is also known as Warehousing Bill of Entry This has to be filed when the importer does not want to pay duty immediately but prefers to keep the goods in a warehouse and pay the duty subsequently and clear the goods for home consumption. Ex-bond Bill of entry : This has to be filed when the importer wants to clear the warehoused goods for home consumption on payment of duty Duty Structure 1. BCD : Basic Customs Duty Calculated on Assessable Value 2. CVD : Countervailing Duty 3. Customs Education Cess 4. Customs Secondary & Higher Education Cess 5. Additional Duty
6. 6. Import duty is calculated on Assessable value . Assessable Value (A V) is CIF + 1% landing charges. Thus, if the import is on ~FOB, than add the actual freight or 20% on Invoice (whichever is Less) and insurance cost 1.125% or actual + 1% landing charges ~C and I, than add actual freight + 1% and ~ C and F, than add insurance + 1 % 6 The Duty is than calculated .as under : Landed cost (A V) = Rs 1000.00 (a) Basic Customs duty @ 10% (on a ) = Rs 100.00 (b) CVD @8% (on a + b) = Rs 88.00 (c) Edu. Cess @2%+S & H Edu Cess @ 1% (on c) = Rs 2.64 (d) Customs Cess @ 3% (on b + c + d) = Rs 5.719 (e) Additional Customs Duty @ 4% (on a + b + c + d +e) = Rs 47.854 (f) Therefore, total import duty is ( b + c + d + e + f ) = Rs 244.213
7. 7. Shipment Arrival Bonding of cargo by Customs/Airlines Collection of document from Airlines by Forwarding agent Receipt of documents & delivery order from consol Scrutinizing of Documents Preparation of Checklist at office Checklist verification Uploading of document through Visual Impex to customs portal Obtaining BOE from Customs portal Credit duty payment to customs via banker Finding Location of Cargo Goods Registration Inspector Verification of Mark & Nos on physical cargo Docs scrutiny by Superintendent Shipment out of charge (passout slip) Obtaining Printout through EDI service centre Superintendent Signature in BOEs Payment of handling charges to custodian Obtain gate pass by showing custodian copy( DO & AWB) Physical Loading of Cargo to Vehicles Transport arrangement Cargo delivery 7
8. 8. Shipment Arrival Bonding of cargo by Customs/Airline s/ Consol Collection of document at Airlines/ Forwarding agent Receipt of documents & delivery order Scrutinizing of Documents Preparation of Checklist at office Verification of checklist Uploading of document through ICE Gate / Visual Impex For First check release Bill of entry printout Obtaining location Slip Goods registration Open inspection Value appraisal AC release Assessment Obtaining of BOE from Customs Credit duty payment to customs via banker Shed superiendent release Obtaining Pass out from Shed AO/Suptd Final BOE print out & signature Obtaining Gate pass from Custodian Payment of handling charges to custodian Gate Pass Signature from SDO Transport arrangement Physical Loading of Cargo to Vehicles Loading consignment Shipment Delivery 8
9. 9. EOU Clearance process 9 Shipment Arrival Bonding of cargo by Customs/Airline s/ Consol Collection of document at Airlines/ Forwarding agent Receipt of documents & delivery order Scrutinizing of Documents Preparation of Checklist at office Verification of checklist Uploading of document through ICE Gate / Visual Impex BOE assessment verify Marks & No's Bond / PC Debit Shipment Pass out Obtain Gate pass Finding location of Cargo Payment of warehousing charges Arrangement of transportation Loading consignment Shipment Delivery
10. 10. Types of Import Customs Clearance Import Customs Clearance Bonded & Ex-Bonded Warehousing Clearance STPI / SEZ Clearance Project Cargo Clearance ATA Carnet Re-Import Customs Clearance Import Clearance Under Customs Duty Exemption Certificate Clearance of exhibition goods Hand carry 10
11. 11. All information in this document is Confidential. 11 Import Export Registration Certificate is Mandatory documents for import in to India for Importer & Exporter ,its issued by DGFT TIN Number is mandatory for after clearance of imported goods in transits within India,TIN stands for Tax-Payer Identification Number, is unique number allotted by Commercial tax department of respective State. Import / Export is not allowed if the importer doesnt have the IEC number issued by the DGFT Importer has to register with Nationalised bank for e-Payment & net banking facility in the designated bank for the payment of custom duty, Users can now avail facility of e-Payment through ICEGATE for all Custom Locations. Not Mandatory if the duty is opted to be paid by UTi and reimbursed by client. Mandatory Registration for Importer / Exporter
12. 12. All information in this document is Confidential. 12 Categories of Import Freely Importable Items Prohibited Items Canalised Imports Restricted / Licensed Imports As the name suggests under this category goods are imported freely and do not require any license. Under this category goods are restricted and they require License for import. Under this category goods are imported only through specified channels or Government agencies. As the name suggests the goods under this category are not permitted to be imported at all.
13. 13. All information in this document is Confidential. 13 Categories of Import Freely Importable Items Prohibited Items Canalised Imports Restricted / Licensed Imports Freely importable: Majority of the goods comes under this category. These do not require import licenses Some of the goods are restricted to be imported as per CTH , However import is permitted subjected to fulfilments of conditions as per FTP and Allied Act compliance . ( i.e) The pneumatic Tire ( Tyre ) & Tube is restricted subject to compliance of Quality Control Order 2009 Light Diesel Oil is restricted import allowed through IOC subject to Para 2.11 of Exim Policy Import of petroleum is permitted only Through The SEA Ports of Mumbai, Kolkata, COK, Haldia, Kandla, Chennai, AND Land Stations Specially Authorised for the Purpose by The CENTRAL GOVT.-Refer Rules 16 and 25 of THE PETROLEUM RULES, 1976. Ozone Depleting substance is prohibited such as R22 GAS imported through any mode like Gas with compressor / Chiller , And Tiger Cat Skins & wild animals are prohibited to be imported Importer / Exporter must have IEC / TIN registration
14. 14. Classification of imported goods 14 The Customs tariff are based on the Harmonised System Nomenclature, which is an internationally accepted charter adopted by the World Customs Organization. The goods are classified by product families and are under a 8 Digit Code. The Customs tariff covers 21 Section and 98 chapters. The eight digit code shows the HSN at 8 digit level under the name "Tariff Item". The first two digit of the code provides chapter number, The next two digits gives the Customs Tariff Head (CTH) grouping. The third set of two digits in the code gives the Customs Tariff Sub-heading. This six digit code is aligned with Harmonized System of Nomenclature adopted by World Customs Organization. The last two digits provide Customs Tariff Sub-sub-head for the entry. 14
15. 15. CUSTOMS GROUP CHAPTER WISE 15 Group Customs Tariff Description Chapter Headings From To 1 1 5 Animal & Animal Products 6 15 Vegetable Products 16 24 Foodstuffs 25 26 Mineral Products 2 27 38 Chemicals & Allied Industries 39 40 Plastics / Rubbers 41 43 Raw Hides, Skins, Leather, & Furs 44 49 Wood & Wood Products 3 50 63 Textiles 64 67 Footwear / Headgear 68 71 Stone / Glass 4 72 83 Metals 5A 84 84 Machinery / Electrical 5B 85 85 5C 86 92 Transportation 6 93 97 Miscellaneous 98 98 Service 7 DEEC 7A DEPB 100% EOU
16. 16. 16 Obtain STPI & Procurement certificate Shipment Arrival Bonding of cargo by Customs/Airli nes/ Consol Collection of document at Airlines/ Forwarding agent Receipt of documents & delivery order Scrutinizing of Documents Preparation of Checklist at office Verification of checklist Uploading of document through ICE Gate / Visual Impex BOE assessment verify Marks & No's Bond / PC Debit Shipment Pass out Obtain Gate pass Finding location of Cargo Payment of warehousing charges Arrangement of transportation Loading consignment Shipment Delivery Documents required - Prior to Arrival Authorization Letter to Airlines for docs collection STPI Import Approval Procurement Certificate Documents required - Post Arrival Arrival notice with IGM details HAWB GATT & DGFT Airline & Consol Delivery OrderInvoice & Packing list
17. 17. 17 Obtain FICCI Guarantee on Prior to Arrival Shipment Arrival Bonding of cargo by Customs/Airlines/ Consol Collection of document at Airlines/ Forwarding agent Receipt of documents & delivery order by CHA Scrutinizing of CARNET Booklet Preparation of Note Sheet Examination process Shed superiendent release Obtaining Passout from Shed AO/Suptd Obtaining Gate pass from Custodian Payment of handling charges to custodian Gate Pass Signature from SDO Transport arrangement Physical Loading of Cargo to Vehicles Loading consignment Shipment Delivery Documents required - Prior to Arrival Authorization Letter for Custom clearance FICCI Guarantee Copy of ATA Carnet Documents required - Post Arrival Authorization letter for Document Collection Endorsement in ATA Carnet Original Carnet Booklet Airline Delivery Order
18. 18. SEZ / FTWZ 18 SEZ means Special Economic Zone and FTWZ means Free Trade and Warehousing Zone A SEZ unit which has been set up for carrying on manufacturing, trading or service activity. Goods imported/procured locally are duty free Exemption from customs duty on import of capital goods, raw materials, consumables, spares, etc Exemption from Central Excise duty on the procurement of capital goods, raw materials, and consumable spares, etc. from the domestic market Exemption from payment of Central Sales Tax on the sale or purchase of goods. Exemption from payment of Service Tax.. 18
19. 19. Frequently asked questions? 19 What is SVB? When is it required? Special Valuation Branch is a Branch of the Custom House, specializing in investigating the transactions involving relationship between the supplier and the importer, Special Valuation Branch examines the influence of relationship on the invoice value of the imported goods, It is required when there is transactions between related parties. whether the existence of such agreement has influenced the invoice value of the imports. What is Re-import? Any goods whichever exported for repair / up-gradation / calibration which had not claimed any benefits at the time of export can avail duty exemption under notification 134/94 SL no. 3 on re-import, nevertheless, under Sl no.2 of the said notification goods exported for repair abroad can be re-imported by paying aggregate duty only on repair cost. What is HSS? High Sea sales (HSS) is a sale carried out by the carrier document consignee to another buyer while the goods are yet on high seas or after their dispatch from the port/ airport of origin and before their arrival at the port / airport of destination. What is STPI? Software Technology Parks of India is the Scheme provides various benefits to the registered units, which includes 100% foreign equity, tax incentives, duty free import, duty free indigenous procurement, CST reimbursement, DTA entitlement, deemed export etc.
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