Import procedures

Certain procedures have to be followed for the purpose of clearing goods to be imported. Briefly these procedures have been discussed below.

The person in-charge of a vessel, ship or aircraft entering India must call or land only at a Customs Port or a Customs Airport only. It may call or land at any other place only if compelled by accident, bad weather or due to some genuine unavoidable reason. In such a case, he must report to the nearest police station or custom officer of such emergency arrival. In case of import of goods through the land route, the vehicle should follow the approved route and arrive at the approved Land Customs Station only.

The person in-charge of a vessel, ship, aircraft or vehicle must submit within 24 hours after arrival at a Customs Area an Import Manifest or Import Report in the prescribed form in duplicate. This will give details of cargo to be unloaded, unaccompanied baggage, goods to be transhipped, retention cargo, details such as general declaration about the conveyance, stores on the conveyance, private property in possession of the Captain of the aircraft or Master of the ship and other members of crews and Passenger Manifest. Separate declaration has to be given in respect of goods like arms, explosives, narcotics, dangerous drugs, gold and silver. The Import Manifest may be amended only with permission if there was no fraudulent intention. This report is not required if the conveyance is carrying only luggage of its occupants.

Sometimes, filing of the Import Manifest is allowed before the arrival of the vessel by the Steamer Agents. This enables the importers to clear the imported goods quickly.

If on the face of things, everything is found to be in order and berthing accommodation is available to the ship, the Customs Officer grants Entry Inwards. Unloading of cargo can start only after such order is made.

The goods are then unloaded from the vessel. However, only those goods which have been mentioned in the Import Manifest can be unloaded. Such unloading can be done only at approved places and under supervision of the Customs Officer on a orking day during working hours. However, unloading on holidays and after working hours may be allowed after giving notice to the prescribed authorities and after paying the prescribed fees.

After the goods are unloaded, they shall remain in the custody of the prescribed authority (eg. Port Trust in case of Port and Airport Authority in case of Airport) approved by the Collector of Customs until they are cleared. A tally sheet is prepared after the goods are goods are unloaded. If less than the reported goods are found, insurance survey is immediately carried out.

If the goods unloaded are lower than the reported quantity, the shipper is liable to pay penalty upto twice the amount of duty payable on such shortfall in goods. The conveyance will leave only on written order given by the Customs Officer. Such order is given only after all formalities are completed and all duties and other payments due are paid. Duties on stores consumed have to be paid.

Procedure to be followed by the importer

Bill of Entry must be filed in the prescribed form by the Import or his authorised agent giving the prescribed details such as name and address of the importer, importer code, name address and licence number of the Custom House Agent, name of vessel, Rotation Number and date, Line Number, port of shipment, country of origin, country of consignment, number of Bill of Lading, description of packages, number of packages, quantity of goods, description of goods, Customs Tariff Heading, details of exemption from customs duty claimed, invoice number, and value, etc. A declaration that the details are true and there is no other document showing contrary information must also be given. The Bill of Entry may be signed by the importer himself or his Custom House Agent.

Bill of Entry are of three types :-

1. Bill of Entry for home consumption: is to be submitted when the imported goods are to be cleared on payment of full duty for consumption of the goods in India. It is white colored.
2. Bill of Entry for Warehouses : is to be submitted when the imported goods are not required immediately the importer but here they are to be stored in a warehouse without payment of duty under a bond and cleared later when required on payment of duty. This enables the importer to defer payment of Customs Duty until the goods are actually required by him. It is yellow colored. It is also known as "Bond Bill of Entry" since bond is executed for transfer of goods in a warehouse without payment of duty.
3. Bill of Entry for Ex-Bond Clearance : is used for clearing goods from the warehouse on payment of duty. The goods are classified and valued at the time of clearance from the Customs Port. Value and classification are not determined on such Bill of Entry. It is green coloured. The rate of duty payable is that rate which is applicable on the date of removal of goods from the warehouse. If the rate of duty has changed after goods are cleared from custom port, duty assessed in the yellow Bill of Entry and paid on green Bill of Entry will not be the same.

Assessment and Clearance : The document details filed by the importer or his authorized agent are checked and assessed by custom authority and then the goods are cleared. The following are the procedures in this connection: -

The Bill of Entry submitted by importer is tallied with the Import Manifest submitted by shipper. If any variance is found between the two, further clarifications for the difference are called for by the Customs authorities. The rate of duty payable will be that rate which is prevalent on the date of presentation of Bill of Entry. The importer or his agent may present Bill of Entry upto one week before expected date of arrival of the vessel. In such a case duty is payable at the rate of applicable on the date of which Inward Entry is granted and not the date of presentation of shipping bill. However the rate of foreign exchange will be that rate which was prevalent on the date of submission of Bill of Entry. This enables the importer to clear the goods quickly.

On presenting of the Bill of Entry, date of presentation is noted. The Bill of Entry is then send to the appraising department for examination. The examiners carry out physical examination of the goods. Packages are opened and examined on a test check sample basis on the basis of which examination report is prepared. The appraiser classifies the goods, determines the customs value, rate of duty applicable and verifies that the imports do not violate any provision of law. The duty payable is typed by a pin point typewriter. The Importer must pay the amount of duty so determined in cash or by bank draft for clearance of goods. However, regular importers may pay the duty out of the current account balance which they keep deposited with the Customs authorities. Once the duty is assessed, the Bill of Entry is returned to the importer for payment of duty. Duty must be paid within 7 days after Bill of Entry is returned ; otherwise interest at the rate of 20% p.a. is payable.

Sometimes, if all documents are in order and the authorities are convinced that there is no violation of any law, the assessment may be done without physically examining the goods.

Provisional Assessment may be done in the following circumstances: -

• When the Customs Officer is satisfied that importer or exporter is unable to produce the required document or information.
• It is necessary to carry out chemical or other test of goods.
• When the importer or exporter has produced all documents but the Customs Officer still feels that further enquiry is required.

In such circumstances, assessment is done on a provisional basis i.e. on a tentative basis. The importer has to pay the duty assessed and may clear the goods. However, he has to execute a bond or furnish warranty or security as required by the custom officer for payment of difference, if any. The surplus amount paid, if any, on final assessment is refunded to him and the shortfall, if any, is to be paid by him. If the imported goods are warehoused after provisional assessment, the Customs Officer may require the importer to execute bond for twice the difference in duty, if the duty finally assessed is higher.

Sometimes goods are imported in completely knock down condition i.e. CKD ( eg. all the components an parts of a car are imported and they are then assembled in India ). Such packages comprise of several goods, each of which are liable at different rate of duty. In such a case, if the importer is liable to produce satisfactory evidence regarding break-up value of different parts, duty will be charged at different rates applicable on the basis of such break-up. If break-up is not available, the rate of duty for the entire package will the highest rate applicable among the parts in the package.

Import Control : After assessment, the Bill of Entry is sent to the "License Section" where it is checked whether the import complies with the export and import policy of the Government. If any license is required for the import, it is verified whether the goods have been imported against a proper import license. Such import license is given in duplicate, one copy for customs purpose and another exchange control copy for clearance of foreign exchange by bank.

Out of Customs Charged Order : After all the above formalities are completed, the Customs Officer will issue Out-of Customs Order. Goods can be removed only on receipt of such order.

Delay due to Customs formalities: Heavy charges known as "demurrage" are payable if goods are not cleared from the Customs Port within 3 days of unloading. If due to Customs formalities, such goods cannot be removed, the Customs authorities issue a certificate stating that delay was due to bonafide Customs formalities or due to bonafide Import Control formalities. In such a case, the demurrage may be refunded by the Port authorities.

Self Assessment of Bill of Entry (Green Channel of Import) This is a special scheme allowed in certain cases for speedy clearance of imports. As the name suggests, the duty is assessed by the importer himself and voluntarily paid by him. Some of the situations where this scheme has been made applicable are Public Sector Undertakings, Government Departments, 100 % export oriented units approved by the Collector and other importers which a proven identity and clean track record. The following are the main conditions of the scheme :-

• Goods should not be subject to any import license or import restriction. They must be goods which fall under the open general list of the RBI.
• They must not fall under any negative list of imports
• Consignment must be of a single product and not a combination of products.
• Sensitive Item are not permitted under this scheme.
• Assessment must not require any bond.
• Assessment should not require original inspection of goods.
• Importer must be regularly importing that item. Bulk imports from manufacturer and test certificate of manufacturer is produced.

Under the scheme, the importer must file Bill of Entry having green colour band for identification. Bill of Entry must be self assessed and must be submitted along with proof of previous clearance of goods.