Business / Industry Sectors
Imports into India and expots out of India
29/05/2013

 

Types of Import-Export Duty

Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India.

The basic types of import duties are:

  • Basic Duty-The customs levies an import duty on nearly any goods or products that come into the national borders. The rate of this duty can vary from the basic 5% to 45%.

 

  • Additional Customs Duty- An additional customs duty is like the central excise duty that is levied on products that are manufactured in India. This additional customs duty is levied on the base value of the imported product which includes landing charges and other custom duties.

 

  • True Countervailing Duty- The countervailing duties are imposed on products imported from outside India to make sure that the domestic products have a fair playing ground.

 

  • Anti-Dumping Duty- Also known as the Safeguard Duty, the Anti-Dumping Duty is aimed toward protecting the domestic industry for import of specified goods with a view to protecting domestic industry from unfair injury. It would not apply to goods imported by a 100% EOU (Export Oriented Units) and units in FTZ (Free Trade Zones) and SEZ (Special Economic Zones).

 

  • Education Cess- At the prescribed rate is levied as a percentage of aggregate duties of customs. If goods are fully exempted from duty or are chargeable to nil duty or are cleared without payment of duty under prescribed procedure such as clearance under bond, no Cess would be levied.

 

 

Registration of Importers-Exporter

For the purpose of import or export, the IEC Code is mandatory. This is a unique 10 digit number issued by DGFT - Director General of Foreign Trade, Ministry of Commerce, Govt of India.

Each Importer/Exporter shall be required to file importer/ exporter profile once with the Regional Authority in Part 1 of 'Aayaat Niryaat Form - ANF2A'. Regional Authority shall enter the information furnished in Part 1 of 'Aayaat Niryaat Form ANF-2A' in their database so as to dispense with the need for asking the repetitive information.

 

Documentation:

 

Documents to be submitted by Importers

Documents required by customs authorities are

  • Invoice
  • Packing List
  • Bill of Lading / Delivery Order
  • GATT declaration form duly filled in
  • Importers / CHAs declaration duly signed
  • Import License or attested photocopy when clearance is under license
  • Letter of Credit / Bank Draft wherever necessary
  • Insurance memo or insurance policy
  • Industrial License if required
  • Certificate of country of origin, if preferential rate is claimed.
  • Technical literature.
  • Test report in case of chemicals
  • Advance License / DEPB in original, where applicable
  • Split up of value of spares, components and machinery
  • No commission declaration. – A declaration about correctness of information

 

 

Documents submitted by Exporters

The export documentation can be classified in the following two categories:  (a) Commercial documents and (b) Regulatory documents. 

  • Commercial Invoice
  • Packing List
  • Certificate of Inspection
  • Certificate of Insurance
  • Bill of Lading/Airway bill/Combined Transport document
  • Certificate of origin
  • Bill of Exchange
  • Shipment Advise
  • Proforma Invoices
  • Shipping Instruction
  • Insurance order
  • Mate’s receipt
  • Letter of Credit
  • Freight Payment Certificate
  • ARE1/ARE11 Form
  • Shipping Bill/Bill of Export
  • Vehicle Ticket

 

Procedures for Imports

 

Bill of Entry

This is a vital document which every importer has to submit under section 46 Bills of Entry should be submitted in quadruplicate – original and duplicate for customs, triplicate for the importer and fourth copy is meant for bank for making remittances.

  • Under EDI system, Bill of Entry is actually printed on computer in triplicate only after ‘out of charge’ order is given. Duplicate copy is given to importer.
  • Types of Bill of Entry - Bills of Entry should be of one of three types. Out of these, two types are for clearance from customs while third is for clearance from warehouse.

 

a)     Bill Of Entry For Home Consumption - This form, called ‘Bill of Entry for Home Consumption’, is used when the imported goods are to be cleared on payment of full duty. Home consumption means use within India. It is white colored and hence often called ‘white bill of entry’.

b)     Bill Of Entry For Warehousing - If the imported goods are not required immediately, importer may like to store the goods in a warehouse without payment of duty under a bond and then clear from warehouse when required on payment of duty. This will enable him to defer payment of customs duty till goods are actually required by him. This Bill of Entry is printed on yellow paper and often called ‘Yellow Bill of Entry’. It is also called ‘Into Bond Bill of Entry’ as bond is executed for transfer of goods in warehouse without payment of duty. 

c)     Bill Of Entry For Ex-Bond Clearance - The third type is for Ex-Bond clearance. This is used for clearance from the warehouse on payment of duty and is printed on green paper. 

 

 

Export Procedures -

 

Registration

 

  • The exporters have to obtain PAN based Business Identification Number (BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export goods.
  • The exporters are also required to register authorized foreign exchange dealer code (through which export proceeds are expected to be realized) and open a current account in the designated bank for credit of any drawback incentive.
  • Whenever a new Airline, Shipping Line, Steamer Agent, port, or airport comes into operation, they are required to be registered into the Customs System.
  • The exporters intending to export under the export promotion scheme need to get their licences/DEEC book etc, registered at the Customs Station.

 

 

Processing of Shipping Bill

In case of export by sea or air, the exporter must submit the 'Shipping Bill', and in case of export by road he must submit 'Bill of Export' in the prescribed form containing the prescribed details such as the name of the exporter, consignee, invoice number, details of packing, description of goods, quantity, FOB value, etc. Along with the Shipping Bill, other documents such as copy of packing list, invoices, export contract, letter of credit, etc. are also to be submitted.

 

There are 5 types of shipping bills:- 

  • Shipping Bill for export of duty free goods. This shipping bill is white colored.
  • Shipping bill for export of goods under claim for duty drawback. This shipping bill is green colored.
  • Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse. This shipping bill is pink colored.
  • Shipping Bill for export of dutiable goods. This shipping bill is yellow colored.
  • Shipping bill for export under DEPB scheme. This shipping bill is blue in colour.

              The Bills of Export are:-

  • Bill of export for goods under claim for duty drawback
  • Bill of export for dutiable goods
  • Bill of export for duty free goods
  • Bill of export for duty free goods ex-bond
  • Let Export Order

 

Arrival of Goods at Dock

After the receipt of the goods in the dock, the exporter may contact the Customs Officer designated for the purpose and present the checklist with the endorsement of Port Authority and other declarations along with all original documents. Customs Officer may verify the quantity of the goods actually received and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the Dock Appraiser, who may assign a customs officer for the examination of the goods. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents, he may proceed to allow "let export" for the shipment. 

 

System Appraisal of Shipping Bills 

In most of the cases, a Shipping Bill is processed by the system on the basis of declarations made by the exporters without any human intervention. Sometimes the Shipping Bill is also processed on screen by the Customs 

 

Customs Examination of Export Cargo 

The Customs Officer may inspect/examine the shipment along with the Dock Appraiser. The Customs Office renters the examination report in the system & then marks the Electronic Bill along with all original documents and checklist to the Dock Appraiser. If the Dock Appraisers satisfied that the particulars entered in the system conform to the description given in the original documents and as seen in the physical examination, may proceed to allow "let export" for the shipment and in form the exporter or his agent. 

 

The author, Sateesh Kulkarni, is a director in Corporate Catalyst India www.cci.in 

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