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GENERAL IMPORT CLEARANCE INFORMATION

Clearance Process
No person can import or Export goods without obtaining an Importer-Exporter Code (IEC) Number along with a BIN (Business Identification Number) from the Regional Licensing Authority (Director General of Foreign Trade) unless he has specified exemption from obtaining the same. Registration with Regional Licensing Authority (DGFT) is a prerequisite for all Importers and Exporters. The Customs authority will not clear goods unless the Importer/ Exporter has obtained Import Export Code Number or BIN Number. However no registration is necessary for the following entities;
  • All Ministries/ Departments of the Central Government and agencies wholly or partially owned by them
  • All Ministries/ Departments of the state Government and agencies wholly or partially owned by them
  • Diplomatic personnel, Counselor officers in India and the officials of the UNO and its specialized agencies
  • Indian returning from/ going abroad and claiming benefit under baggage rules
  • Persons/ Institutions/ Hospital importing or exporting goods for their personnel use not connected with trade or manufacture or agriculture.
  • Persons importing / exporting goods from / to Nepal provided the CIF value of a single consignment does not exceed Indian rupees INR 25000/-
  • Persons importing / exporting goods from / to Myanmar through the Indo-Myanmar border area provided the CIF value of a single consignment does not exceed Indian rupees INR 25000/-
  • Ford Foundation
  • Importers importing goods for display or use in Fair/ Exhibitions or similar event under the provision of ATA Carnet.
  • Director, National Blood Group Reference Laboratory, Bombay or their authorized offices
  • Individual / Charitable Institutions/ Registered NGOs importing goods, which have been exempted from Custom Duty under the notification issued by Ministry of Finance for Bonafide use by the victims effected by natural Calamity.
There are two categories of users into India:

Actual users
Actual users (Industrial): Actual Users (industrial) are persons who utilizes the imported goods for manufacturing in their own industrial units or manufacturing for their own use in another unit including a jobbing unit.

Actual users (Non-industrial):Actual users (non-industrial) are persons who utilizes the imported goods for their own use in:
  • any commercial establishment carrying on any business, trade or profession; or
  • any laboratory Scientific or Research and Development (R&D) institution, university or other educational institution or hospital: or

Non-Actual users include
  • Importers for stock and sale
  • Personal Imports
  • Imports of Gifts etc.

Categories of Imports and Export
Import status of commodities can be broadly categories as:
  • Free Import - Import of the commodities categorized under this does not require any special or license.
  • Restricted Import - Import of these commodities require Import License
  • Canalised Import - Import of these commodities is canalized (restricted for import/export) through the appointed agencies only.
  • Prohibited - Import of these commodities is prohibited and these commodities are not allowed to be imported into India.

Special Schemes for Import
As per the current Import-Export Policy & Procedure, the import of goods is also permissible under the following special schemes designed to encourage export:
  • Export Promotional Capital Goods Scheme (EPCG) under which capital goods can be imported at a concessional/custom duty rate subject to export obligation.
  • Duty Exemption/Remission Scheme and Duty Entitlement Pass Book Scheme under which imported raw materials and components etc. required, as imports for export production are made available to the registered exporters in advance free of Custom duty.
  • Diamond, Gem & Jewelry Export Promotion Scheme and Diamond Dollar Account Scheme for promoting export of Gold silver and jewelry articles etc.
  • Export Oriented Units (EOUs) and units in Export Processing Zones (EPZs). Electronic Hardware Technology Park (EHTP) and Software Technology Park (STP) Scheme. These are special economic zones where companies within these zones are permitted to import all types of permissible Capital goods, raw material etc. free of excise and custom duty.
  • Special Economic Zones permitted duty free import/procurement from Duties and Tax for development of SEZ and setting up a factory in the zone, licence for SSI items not required etc.
Goods can be imported into India on 2 modes:

  1. Courier (OBC) or Express Mode
  2. Formal Clearance or Freight Mode
TYPE A: Courier (OBC) or Express Mode of Clearance
This entry process is a faster and less restrictive mode of clearance regulated by the Courier Import and Export (Clearance) Regulations 1998. It is highly restrictive in that it is limited to certain items/commodities and value/weight limits. For all formal clearance shipments, the importer is required to appoint a broker for clearance and has the option of choosing a FedEx broker or his own broker for clearance. Additional brokerage charges apply to any formal clearance:

TYPE B: Courier (OBC) or Express Mode of Clearance
The following items/ commodities cannot be cleared under Courier (OBC) mode and must enter India on Formal Clearance Freight mode. These items require a formal Bill of Entry for customs clearance.
  • Package Weight - If the package weight is more than 32 Kgs.
  • Shipment Value - If the value of the shipment is more than US$ 1500
  • Any restricted commodity subject to licensing/permit requirements
  • Animals and parts thereof
  • Plants and parts thereof
  • Perishable goods
  • Inorganic Chemicals, Organic or Inorganic Compounds of (I) Precious Metals, (ii) Rare Earth Metals, (iii) Radioactive Elements of Isotopes
  • Fluorine, Chlorine, Bromine and Iodine
  • Sulphur
  • Acids
  • Salts
  • Hydrogen, rare gases & non metals
  • Gold or silver in any form
  • Precious, Semi-precious jewelry or stones

Organic Chemicals
  • Hydrocarbons
  • Antibiotics
  • Pro-vitamins
  • Nucleic Acids

Miscellaneous Chemical Products
  • Artificial Graphite
  • Activated Carbons
  • Insecticides, rodenticides, fungicides, herbicides

FedEx Clearance (Import)

Courier (OBC) Mode of Arrival
For the Courier clearance a Courier Bill of Entry (CBE) is filed with customs for clearance. CBE is produced to customs in 3 main forms: -

CBE III (Courier Bill of Entry for Documents0
CBE IV (Courier Bill of Entry for Low Value, i.e. Non Documents up to INR.10000
CBE V (Courier Bill of Entry for Medium Value, i.e. Non Documents with value INR. 100,000 /- (Rs One Lakh)
US$ 101 to US$ 1500)

CBE-III: Documents are cleared within 1 Hour of arrival of shipments at the clearance facility
CBE IV: Low Value Non Documents are subject to a minimum of 25% physical check
CBE V: Medium Value Non Documents are subject to 100% examination and assessment by customs officials

Type: II Cargo (Freight) Mode of Arrival - Formal Clearance
For shipments above INR 100,000 and for the commodities restricted for courier import, a Formal Bill of Entry is required to be filed for clearance by authorised Customs House Agent (CHA). Consignee has the option to appoint his own broker or FedEx broker for the clearance under Formal Bill of Entry. The brokerage charges will be extra and can be billed to Consignee or Shipper. Formal Clearance takes 2 business days or more.

All non document shipments destined to Karnataka state require a TIN # (Tax Payer's Identification Number) of the consignee. The shipper should state the TIN# on the Commercial Invoice to avoid delay in delivery and state level entry fees.



Document Requirements
The following documents may be required for formal customs clearance into India:.

  • Manufacturer's Commercial Invoice duly Signed and if possible Bank Attested
  • Price list of the commodities in shipment
  • Manual and Catalogue , write ups or Technical Literature for laboratory or Electronic equipment
  • Import declaration and GATT Declaration sign and stamp by consignee.( Two copies)
  • Packing List duly signed
  • Purchase Order
  • Authority letter from Consignee
  • If the final destination is other than Mumbai then an¬† N- Form signed and stamped is required
  • Import Duty/ Warehouse / Octroi/ D.O Charges in advance
  • Any applicable Special Import License
  • Certificate of origin , mill test certificate, test report ( applicable for metal and chemical groups only)
  • Industrial licence/ Company Registration certificate copy for N Form Clearance
  • Copy of IEC/BIN Number required from importer.

For clearance of all live plant and flower, a phytosanitary certificate is required from Plant Quarantine Officer. In case of  Drugs and Medicines, prior approval of assistant Drug Controller is necessary. Delivery of radioactive materials and explosives can only be cleared if bill of entry is accompanied by NOC from the department of atomic energy or the Controller of Explosives and release of live birds and animals would be required certificate from Animal Quarantine officer this can only cleared in cargo terminal and can not be booked as IP commodities

"Value for Customs Purposes" and/or "0" is not acceptable on the Commercial Invoice or any document for shipments to India.  A complete description along with the correct market value of the shipment is required; undervalued shipments will be reassessed by Customs and fines will be imposed.  The invoice must  have itemized value for the contents with Harmonized Tariff Number of the commodity and it must be signed by the shipper.

Multiple Piece Shipments (MPS) require a Commercial Invoice detailing the contents of each individual package within the shipment. Incomplete or wrong description of goods as well as wrong weight or declared value, will result in fines and seizures.  Shipper and consignee information must be complete and accurate for customs clearance purposes.

 



Customs Valuation
The valuation of goods for customs purpose is done as per the principles laid down in Custom Valuation (Determination of Price of Imported Goods) Rules, 1998. Goods can attract a specific rate of duty or a rate ad valorem, where often the importer and Customs administration have a dispute on value of goods. The Valuation on invoice price cannot be denied if the condition of relevant notification are satisfied unless buying and selling companies can be proved to be related person, who are influencing the invoice price. If the value of a particular item accepted by the custom authorities become a precedent, different valuation subsequently are arbitrary.

Value Rules for Customs Duty and Tax
The ad valorem rates of duties are subjected to the value of a product. This value is generally constituted by the elements of cost, insurance and freight. In addition landing charges are also added to the CIF at 1% of CIF value to arrive at the assessed value of goods.  

If the breakdown of Cost, Insurance and Freight is not clearly provided on the invoice, customs may load the value of these categories as: -

  • Insurance at 1.125%
  • Freight at 20%
(For Clearance of bona fide samples the duties and taxes applicable, if any are calculated on the FOB value and Freight, Insurance and Landing Fee is not loaded for the calculation of Duties and Taxes).



Import Duties
Tariffs
India follows the Harmonized Code System of the World Customs Organization for classification of commodities (up to 10 digits). The following are the Import Duties which are presently levied on import of goods into India---

Basic Duty OF Customs (BASIC)
Import Duty, which is specified against each Heading or Sub-heading in the first Schedule to the CTA. This is popularly called Basic Custom Duty. There are different rates of duty for different commodities. This duty is also known as Schedule rate and it can be changed by an Act of parliament. The duty can also be changed by the exemption notification of the department of Revenue. All basic duties are given as per Finance Act, 1999 and are computed on the aggregate of assessable value.

Preferential Rate of Duty (PRE)
There are also different rates of duty for goods imported from certain countries in terms of bilateral or other agreements with such countries ----which are called preferential rates of duties. The duty may be a percentage of the value of the goods (when it is called ad valorem duty) or at a specific rate.



Antidumping
Anti-dumping Duty
Under section 12 of the Custom Act, 1962 Antidumping duties are applied at the rates specified goods imported from specified countries to protect indigenous industry from injury resulting from dumping of goods.

Countervailing Duty (CVD)
Additional duty equal to the excise leviable on like goods produced or manufactured in India. This is levied under Section 3 of CTA. This is commonly called "countervailing duty"(CVD). If such duty is on ad valorem basis then the value for this purpose is the total of the assessable value plus custom duty



Excise Duties
There are several types of excise duties in India which are applied at the time of clearance of such goods. These duties are :
  • Basic Excise Duty
  • Special Excise Duty
  • Additional Duties of Excise
  • Cess

Basic Excise Duty : This duty is specified against each sub-heading in the First Schedule to the Central Excise Tariff Act, 1985. There are however,  notifications issued by the Central Government which grant either total or partial exemption from incidence of basic duty. These exemptions are both general and conditional in nature. The effective rate of basic excise duty is thus determinable only after reference to the relevant exemption notification given under the heading "General Exemptions".

Special Excise Duty : This duty is leviable only on a few items. The rate of duty and the items on which it is leviable are specified under the Second Schedule to the Central Excise Tariff Act, 1985.

Additional Duties of Excise : There are a number of additional duties leviable under different enactments on various commodities. Under Additional Duties of Excise (Textile and Textile Articles) Act, 1978, duties of excise are chargeable  on specified textiles and textile articles.  Additional Duties of Excise (Goods of Special Importance) Act, 1957 prescribes additional duties on sugar, tobacco products and textile articles in lieu of sales tax.

Cess : Different items are subject to levy of Cess at varying rates under different enactments.



Additional Duties
Special Additional Duty of Customs (SADD)
Special additional duty of 4% SADD will be computed on the aggregate of assessable value of basic duty of customs and additional duty of customs (CVD). The SADD will be charged under Section 3(A) of Customs Tariff Act, 1985.



Import Taxes
Octroi
In addition to the above duty, for all Mumbai destination shipments there will be Local Municipal Tax (Octroi) applicable for Import at may be @ 4.5% on the landed value is applicable. Landed Value = Assessed Value + All Customs Duty.



Customs Fees

Demurrage Fees

The goods discharged in the custom area by the conveyance carrying imported goods are stored in warehouses of CWC, Port Trusts or other designated authority. Demurrage or storage charges may apply after a few days.

Cesses
Certain cesses are leviable, on specified articles, on export, under various statues. These Cesses are also collected as duties of custom and are passed on to the administering Agencies nominated under the respective statues.




Exchange Controls
India's exchange control policy is set and administered by Reserve Bank of India (RBI) under the Foreign Exchange management Act for Importer and Exporter (FEMA). FEMA has been formed with the objective for facilitating external trade and payment and for promoting the orderly development and maintenance of Foreign Exchange Market in India. The Reserve Bank of India upholds this act. Under the Rule or Regulation made there under, or with the general or special permission of the Reserve Bank of India, No person shall

  • Deal in or transfer any foreign exchange or foreign security to any person not being an authorized person.
  • Make any payment to or for the credit of any person resident outside India in any manner
  • Receive otherwise through an authorized person, any payment by order or on behalf of any person resident outside India in any manner
  • Enter into financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire any asset outside India by any person.
For formal clearance, all exporters are required to provide a Sellers' Declaration Form (SDF) or Guaranteed Remittance Form (GR) or Exchange Control Declaration (ECD), a declaration to the Reserve Bank of India (RBI) that indicates the currency involved in a transaction and the terms of payment specified.

Any advance payments required by the exporter prior to import of the goods are permitted only if the importer obtains a bank guarantee from an international bank covering the advance remittance amount. The import of the goods should normally be completed within 3 months of advance payment to the foreign exporter.



Technical Barriers to Trade (TBT's)
Technical barriers or non-tariff barriers to trade as they are sometimes known, can cause many problems for exporters looking for new markets for their products. These barriers can be in the form of regulations, standards, testing and certification procedures. The World Trade Organization (WTO) Agreement on Technical Barriers to Trade tries to ensure that these barriers do not create unnecessary obstacles. To obtain further information on Technical Barriers to Trade as well as Notifications on technical regulations and conformity assessment procedures, please visit http://www.wto.org/english/tratop_e/tbt_e/tbt_e.htm



Consular Fees
None

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