OVERVIEW
In recent years, the world has become increasingly interconnected, and global trade has become more important than ever before. Export and import have become crucial components of many economies, and India is no exception. India has a rich history of trade, and today, it is one of the fastest-growing economies in the world. The government of India has put in place a regulatory framework to facilitate the import and export of goods. This framework provides guidelines for businesses that intend to trade with India. In this article, we will explore the procedure for exporting and importing goods in India. The article focuses on the steps involved in the process, the documents required, the regulatory framework put in place by the government along with the challenges faced by businesses. By the end of this article, one should have a good understanding of the procedure for exporting and importing goods in India and the challenges involved in the process.
DOCUMENTATION REQUIREMENTS
To import goods into India, one needs to provide various documents to the customs authorities. The most important documents include:
Commercial Invoice: This document contains a detailed description of the goods, their value, and the terms of sale.
Bill of Lading or Airway Bill: These documents are issued by the shipping company and serve as proof of shipment and ownership of the goods.
Packing List: This document provides details of the contents of each package in the shipment.
Import Declaration Form (IDF) or Bill of Entry (BOE): This document contains information about the importer, the goods being imported, their value, and the applicable import duties.
Insurance Certificate: This document provides proof of insurance coverage for the goods being imported.
Certificate of Origin: This document is issued by the exporter and provides information about the country of origin of the goods.
To ensure compliance with India's trade laws and regulations, there are various procedures and regulations that must be followed when importing goods into the country.
The following are some essential procedures and regulations that should be kept in mind while importing goods into India:
1. IMPORT PROCEDURE: THE BILL ENTRY
Imported goods must pay Customs duty and comply with legal requirements unless they are not intended for Customs clearance at the port/airport of arrival, such as those for transit or transhipment. If the goods are meant for transit or transhipment, they can be allowed without duty payment under Sections 52 to 56 of the Customs Act, 1962. For goods meant for transhipment to another Customs station, a simple transhipment procedure is required at the first port/airport of landing, with Customs clearance formalities to be completed by the importer at the intended delivery station.
A straightforward procedure is also prescribed for transhipment of goods after unloading to a port outside India, with no duty payment required. These are following procedures:
I. Imported goods can be cleared for home consumption after payment of duties or cleared for warehousing with no immediate discharge of duties.
II. Importers must file a Bill of Entry for home consumption or warehousing, as required by Section 46 of the Customs Act, 1962.
III. The Importer-Export Code (IEC) number, a 10-character alphanumeric allotted by the Directorate General of Foreign Trade (DGFT), is mandatory for any import/export activities, except for exempt categories listed in the Handbook of Procedures.
IV. To clear goods through the EDI system, the importer must file a cargo declaration with required particulars.
V. Declarations can be filed electronically through the service centre, with scanned documents uploaded via the "e-Sanchit" programme. The Central Board of Indirect Customs (CBIC) has implemented Faceless Assessment for imported Bills of Entry, with assessment conducted by officers located remotely from the Customs station.
2. SELF-ASSESSMENT OF IMPORTED AND EXPORT GOODS
I. According to Section 17 of the Customs Act, 1962, importers and exporters must self-assess duty for imported/exported goods under section 46 or 50. They must declare the correct classification, applicable duty rate, value, and any claimed exemption notifications. The declaration may be verified by the proper officer based on the Risk Management Systems (RMS). RMS selects high-risk consignments for detailed verification before clearance, while importers with a good track record receive assured facilitation. If self-assessment is incorrect, the duty may be reassessed.
II. Bills of Entry may be taken up for verification or examination based on RMS interdictions. If there is no interdiction or other factor, the Bills of Entry will be facilitated for clearance on payment of duty without assessment or examination.
III. The proper Officer may order examination or testing of the goods, ask for relevant documents, or other information. If the self-assessment is incorrect, the duty may be re-assessed, and a speaking order passed within 15 days.
IV. In cases where verification requires further testing/documents/information, provisional assessment may be done with the importer/exporter furnishing security. If unable to determine the duty liability, a request for provisional assessment of duty can be made under Section 18 (1)(a) of the Customs Act, 1962. For the purpose of proper assessment of duty and to ensure correctness of trade statistics, importers/exporters should mandatorily declare the Standard Unit Quantity Code (UQC), as indicated in the Customs Tariff Act, 1975.
3. FACELESS CUSTOMS
I. The Indian Customs has implemented Faceless Assessment on imports since, June 2020 to ensure an objective, fair, and just assessment as per vide Circular No.28/2020-Customs and Instruction No.09/2020 both dated 5th June 2020. The assessment process is separated from the physical location of Customs officers at the port of arrival through the use of a technology platform. The implementation started in Chennai and Bengaluru and was gradually expanded to cover all of India by October 31, 2020.
II. The key objectives of Faceless Assessment are anonymity in assessment, speedier Customs clearances, greater uniformity of assessment, and promoting sector-specific and functional specialisation.
III. The Central Board of Indirect Taxes and Customs (CBIC) established the National Assessment Centres (NACs) in September 2020 to monitor assessments, liaison with Customs formations, and function as a knowledge hub for assigned commodities. Now, CBIC has taken various measures to ensure timely assessment and faster clearance of goods, including minimizing and rationalizing raising queries to importers, streamlining import cases for First Check examinations, and facilitating interactions between NACs and Risk Management Division.
IV. CBIC has issued fresh directions and clarifications on various aspects of Faceless Assessment after comprehensive stakeholder consultations. These include re-assessments done in accordance with principles of natural justice, full submission of required documents and accurate declarations, increasing monetary limits for assessments, and sensitizing Customs officers in liquid bulk cargo assessment. CBIC has also increased facilitation to 90% in July 2021, revamped the existing Direct Port Delivery scheme to shift to a regime of Customs document-based DPD, and prescribed time limits for assessments.
V. The composition of Faceless Assessment Groups (FAGs) under the NACs through vide Circular No.14/2021-Customs dated 7th July 2021 has been re-organised to foster faster clearances and better facilitation.
4. EXAMINATION OF GOODS
I. Goods that are imported and flagged for examination by the RMS undergo a verification process to ensure that the description and declaration given in the Bill of Entry and related documents are accurate. In situations where the importer does not possess complete information at the time of import or where the proper officer has reasonable belief, the imported goods may be examined before assessment.
II. During examination, samples are drawn from the goods for chemical analysis or verification. Once assessment is complete, the Bill of Entry must be presented for registration in the import shed where the proper officer of customs examines the goods and accompanying documents. Goods that pass inspection are granted clearance order by the proper officer of customs in the Import Shed.
5. EXECUTION OF BONDS
For availing partial or complete exemption from duties under different schemes and notifications, execution of end use/ provisional duty bonds with Bank Guarantee or other surety may be required, in the prescribed forms. The amount of bond and bank guarantee is determined in terms of the instructions issued by the Board or conditions of the relevant notification or provisions of the Customs Act, 1962 or Rules or Regulations made there under.
6. PAYMENT OF DUTY
An overview of the procedure for Payment of duty as follows:
I. The duty can be paid in the designated banks through TR-6 Challan. Facility of e- payment of duty through multiple banks is also available since 2007 at all major Customs locations.
II. With effect from 17-9-2012, e-payment of Customs duty is mandatory for importers registered under Accredited Clients Programme/Authorised Economic Operator scheme and importers paying duty of Rs. 1 lakh or more per Bill of Entry. Customs Notification No. 134/2016-Customs (N.T) & 135/2016-Customs (N.T.) dated 2nd November, 2016 allowed Importers certified under Authorized Economic Operator
III. Programme as AEO (Tier-Two) and AEO (Tier-Three) to make deferred payment of duty of Customs. The Deferred Payment of Import Duty Rules were notified vide Notification no. 28/2017- Customs (N.T.) dated 31st March, 2018 [Refer Circulars No.33/2011-Cus., dated 29-7-2011 and No. 24/2012-Cus., dated 5-9-2012, Circular No. 52/2016- Customs dated 15.11.2016]
IV. Extension of Deferred Payment of Duty to ‘Authorised Public Undertakings’ (APU) : Vide Notification No. 78/2020-Customs (N.T.) dated 19.08.2020 ‘Authorised Public Undertakings’ (APU) have been permitted to avail the facility of deferred payment of Customs import duty under proviso to sub-section (1) of section 47 of the Customs Act, 1962.
CONCLUSION
In conclusion, navigating the procedures for importing and exporting goods in India can seem daunting, but with the right knowledge and resources, businesses can successfully tap into this dynamic market. India's economy is growing rapidly, and there are ample opportunities for businesses to expand their reach and increase profits through international trade. However, to take advantage of these opportunities, it is crucial to understand the regulations and procedures that govern imports and exports in India.
By partnering with experienced logistics providers, businesses can ensure that they are following all the necessary procedures and regulations for importing and exporting goods in India. From obtaining the necessary licenses and documentation to navigating customs clearance and complying with safety and quality standards, logistics partners can provide valuable support and guidance throughout the entire import or export process. With the right approach and resources, businesses can successfully navigate India's import and export regulations and take advantage of the many opportunities that this vibrant market has to offer.
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