custom procedures in foreign trade

8/6/2019 Custom Procedures in Foreign Trade

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Customs is an authority or agency in a countryresponsible for collecting and safeguarding customsduties and for controlling the flow of goods includinganimals, transports and hazardous items in and out of acountry. Depending on local legislation and regulations,the import or export of some goods may be restricted or forbidden, and the customs agency enforces these rules.


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the maintenance of the security of India; the maintenance of public order and standards of decency or

morality; the prevention of smuggling;

the prevention of shortage of goods of any description; the conservation of foreign exchange and the safeguarding of

balance of payments; the prevention of injury to the economy of the country by the

uncontrolled import or export of gold or silver

the conservation of exhaustible natural resources the protection of patents, trade marks and copyrights


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the prevention of deceptive practices; the carrying on of foreign trade in any goods by the State, or by a

Corporation owned or controlled by the State to the exclusion,complete or partial, of citizens of India;

the fulfilment of obligations under the Charter of the United Nationsfor the maintenance of international peace and security; the implementation of any treaty, agreement or convention with any

country; the compliance of imported goods with any laws which are

applicable to similar goods produced or manufactured in India; the prevention of dissemination of documents containing any matter

which is likely to prejudicially affect friendly relations withany foreign State or is derogatory to national prestige;

the prevention of the contravention of any law for the time being inforce; and

any other purpose conducive to the interests of the general public.


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The Govt. of India, Ministry of Commerce andIndustry announces Export Import Policy everyfive years.

The current policy cover the period 2009-2014.

The Export Import Policy (EXIM Policy) isupdated every year on the 31st of March andthe modifications, improvements and newschemes are effective w.e.f. 1st April of everyyear.

Govt. of India also release the Hand Book ofProcedures detailing the procedures to befollowed in each of the schemes covered inthe Exim Policy


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RegistrationAn exporter needs to obtain PAN based Business IdentificationNumber (BIN) from the DGF T, prior to filing of shipping bill for clearance of export goods

All the exporters intending to export under the export promotionscheme need to get their licences / DEEC book etc.

P rocessing of Shipping BillThe shipping bills or bills of export are required to be filled in the

format as prescribed in the Shipping Bill and Bill of Export (Form)regulations, 1991An exporter need to apply different forms of shipping bill or bill ofexport for export of duty free goods, export of dutiable goodsand export under duty drawback etc.


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Qu ota AllocationThe quota allocation label is required to be pasted on the exportinvoiceThe allocation number of AEPC (Apparel Export Promotion

Council) is to be entered in the system at the time of shipping billentryThe quota certification of export invoice needs to be submitted toCustoms along with other original documents at the time ofexamination of the export cargoFor determining the validity date of the quota, the relevant dateneeds to be the date on which the full consignment is presentedto the Customs for examination


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Arrival of Goods at DocksO n the basis of examination and inspection ,goods are allowedenter into the Dock At this stage the port authorities check the quantity of the goodswith the documents

System Appraisal of Shipping BillsThe Shipping Bill is processed by the Customs O fficer on the basisof declarations made by the exporters


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C u stoms Examination of Export C argoCustoms O fficer may verify the quantity of the goods actuallyreceived and thereafter mark the Shipping BillAll original documents are handed over to the Dock Appraiser ofthe Dock, who many assign a Customs O fficer for theexaminationThe Customs O fficer may inspect/examine the shipment alongwith the Dock Appraiser If the Dock Appraiser is satisfied that the particulars of theShipping Bill conform to the description given in the originaldocuments and as seen in the physical examination, he mayproceed to allow "let export" for the shipment, and inform theexporter or his agent


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Bill of EntryA Bill of Entry, also known as Shipment Bill, is a statement of thenature and value of goods to be imported or exported,prepared by the shipper and presented to a customhouseThe importer clearing the goods for domestic consumption has tofile bill of entry in four copies - original and duplicate are meantfor customs, third copy for the importer and the fourth copy ismeant for the bank for making remittancesIf the goods are cleared through the EDI system, the importer isrequired to file a cargo declaration having prescribed particularsrequired for processing of the entry for customs clearance


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Doc u ments req u ired for filing Bill of EntrySigned invoicePacking listBill of Lading or Delivery O rder/Airway Bill

GA TT declaration form duly filled inImporters/ CHAs declarationLicense wherever necessaryLetter of Credit/Bank Draft/wherever necessaryInsurance documentImport licenseIndustrial License, if requiredTest report in case of chemicalsAdhoc exemption order

DEEC Book/DEPB in originalNo Commission declaration


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P ayment of D u tyImport duty may be paid in the designated banks or through TR-6challansDifferent Custom Houses have authorised different banks for payment of duty and is necessary to check the name of thebank and the branch before depositing the duty

P rior Entry for Bill of EntryFor faster clearance of the goods, provision has been made to

allow filing of bill of entry prior to arrival of goodsThis bill of entry is valid if vessel/aircraft carrying the goods arrivewithin 30 days from the date of presentation of bill of entry


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Specialized SchemesImport of goods under specialized scheme such as DEEC andEO U etc. is required to execute bonds with the custom authoritiesThe bank guarantee is also required along with the bondThe amount of bank guarantee depends upon the status of theimporter like Super Star Trading House/ Trading House etc.

Bill of Entry for Bond/Wareho u singA separate form of bill of entry is used for clearance of goods for

warehousingAssessment of this bill of entry is done in the same manner as thenormal bill of entry, and then the duty payable is determined


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Bill of exportShipping Bill/Bill of ExportMain document required by custom authorities for allowing shipment.After shipping bill is stamped by customs cargo is allowed into portshade

Shipping bill: Sea or air Bill of export: Land

Bill of Transhipment

It is a document used for goods imported into a customs portintended for transhipment

Packing ListIt is a consolidated statement of contents for the number of packs.


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Invoice

It is a basic and complete document containing information aboutshipper, importer, product, price, origin etc

Export copy of contractIt is a contract between exporter and importer

Certificate of O riginIt states that from which country the shipped goods are originated.

Letter of CreditIt is an understanding by importers bank stating that payment will bemade to exporter if the required documents are presented to the bank.


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RBI prescribed G R form

It is a declaration by exporter submitted along with shipping bill tocustoms

ARE1 or A RE2 forms

Every manufacturer for clearance of excisable goods files anapplication A R from his factory for export.Custom officer endorses it and then excise authority considers it for

rebate.


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Bill of entryDeclaration by an importer of the exact nature, precise quantity andvalue of goods that have landed or are being shipped out .

Signed invoice

Packing list Bill of Lading or Delivery O rder/Airway Bill

It is an acknowledgment receipt from shipping company to deliver goods in same condition in which it were received.

GA TT declaration form duly filled in

Importers/CHAs declaration Letter of Credit/Bank Draft/wherever necessary Insurance document


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Import license Industrial License, if required Test report in case of chemicals Ad-hoc exemption order DEEC Book/DEPB in original

Catalogue, Technical write up, Literature in case of machineries,spares or chemicals as may be applicable Separately split up valueof spares, components machineries

Certificate of O rigin, if preferential rate of duty is claimed No Commission declaration


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The C u stoms Act-1962


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Chief Commissioners of Customs Commissioners of Customs Commissioners of Customs (Appeals)

(cc) Joint Commissioners of Customs Deputy Commissioners of Customs Assistant Commissioners of Customs or Deputy Commissioner of

Customs such other class of officers of customs as may be appointed for the

purposes of this Act.


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Subject to such conditions and limitations as the Board may impose,an officer of customs may exercise the powers and discharge theduties conferred or imposed on him under this Act.

An officer of customs may exercise the powers and discharge theduties conferred or imposed under this Act on any other officer ofcustoms who is subordinate to him.

Notwithstanding anything contained in this section, a Commissioner (Appeals) shall not exercise the powers and discharge the dutiesconferred or imposed on an officer of customs other than thosespecified in Chapter XV and section 108.


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The Board may, by notification in the O fficial Gazette, appoint - The ports and airports which alone shall be customs ports or customs

airports for the unloading of imported goods and the loading ofexport goods or any class of such goods

The routes by which alone goods or any class of goods specified inthe notification may pass by land or inland water into or out of India,or to or from any land customs station from or to any land frontier;

The Board may, by notification in the O fficial Gazette, declareplaces to be warehousing stations at which alone public warehousesmay be appointed and private warehouses may be licensed.


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If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, bynotification in the O fficial Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance)as may be specified in the notification, the import or export of goods

of any specified description.


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Power of Central Government to specify goods. If, having regard to the magnitude of the illegal export of goods of

any class or description, the Central Government is satisfied that it isexpedient in the public interest to take special measures for thepurpose of checking the illegal export or facilitating the detection ofgoods which are likely to be illegally exported, it may, by notificationin the O fficial Gazette, specify goods of such class or description.

Persons possessing specified goods to intimate the place of storage,etc. -Every person who owns, possesses or controls, on the specified date,

any specified goods, the market price of which exceeds fifteenthousand rupees shall, within seven days from that date, deliver tothe proper officer an intimation containing the particulars of theplace where such goods are kept or stored within the specified area.


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Power to exempt. - If the Central Government issatisfied that it is necessary in the public interest soto do, it may, by notification in the Official Gazette,

exempt generally, either absolutely or subject tosuch conditions as may be specified in thenotification, goods of any class or description from

all or any of the provisions of Chapter IVA orChapter IVB.


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Du tiable goods

Except as otherwise provided in this Act, or any other law for the timebeing in force, duties of customs shall be levied at such rates as maybe specified under the Customs Tariff Act, 1975 (51 of 1975), or anyother law for the time being in force, on goods imported into, or exported from, India.

The provisions of sub-section (1) shall apply in respect of all goodsbelonging to Government as they apply in respect of goods notbelonging to Government.


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For the purposes of the Customs Tariff Act, 1975 (51 of 1975),customs is chargeable on any goods by reference to their value, thevalue of such goods shall be deemed to be the price at which such orlike goods are ordinarily sold, or offered for sale, for delivery at the

time and place of importation or exportation, as the case may be, inthe course of international trade, where (a) the seller and the buyerhave no interest in the business of each other ; or (b) one of themhas no interest in the business of the other, and the price is the soleconsideration for the sale or offer for sale.


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Every person who owns, possesses or controls, on the notified date,any notified goods, shall, within seven days from that date, deliver tothe proper officer a statement (in such form, in such manner andcontaining such particulars as may be specified by rules made in thisbehalf) in relation to the notified goods owned, possessed or

controlled by him and the place where such goods are kept or stored.

No notified goods (other than those which have been sold or transferred) shall be taken from one place to another unless they areaccompanied by a transport voucher (in such form and containing

such particulars as may be specified by rules made in this behalf)prepared by the persons owning, possessing or controlling suchgoods.


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No person shall acquire (except by gift or succession, from any other individual in India), after the notified date, any notified goods .

If anyone acquires such goods, then they should be accompaniedby - the voucher referred to in section 11F or the memorandum

referred to in sub-section (2) of section 11G, as the case may be,or

in the case of a person who has himself imported any goods, anyevidence showing clearance of such goods by the CustomsAuthorities; and

unless he has taken, before acquiring such goods from a personother than a dealer having a fixed place of business, suchreasonable steps as may be specified by rules made in thisbehalf, to ensure that the goods so acquired by him are notgoods which have been illegally imported.


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Every person who, on or after the notified date, owns, possesses,controls or acquires any notified goods shall maintain (in such formand in such manner as may be specified by rules made in thisbehalf) a true and complete account of such goods and shall, asoften as he acquires or parts with any notified goods, make an entry

in the said account in relation to such acquisition

Sale, etc., of notified goods to be evidenced by vouchers O n and from the notified date, no person shall sell or otherwise

transfer any notified goods, unless every transaction in relation to thesale or transfer of such goods is evidenced by a voucher in such formand containing such particulars as may be specified by rules madein this behalf.


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The rate of duty and tariff valuation, if any, applicable to any exportgoods, shall be the rate and valuation in force, - in the case of goods entered for export under section 50, on the

date on which the proper officer makes an order permittingclearance and loading of the goods for exportation under section 51;

in the case of any other goods, on the date of payment of duty. The provisions of this section shall not apply to baggage and goods

exported by post.


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in the case of goods entered for home consumption under section46, on the date on which a bill of entry in respect of such goods ispresented under that section;

in the case of goods cleared from a warehouse under section 68, onthe date on which the bills of entry for home consumption in respectof such goods is prescribed under that section;

in the case of any other goods, on the date of payment of duty:Provided that if a bill of entry has been presented before the date ofentry inwards of the vessel or the arrival of the aircraft by which thegoods are imported, the bill of entry shall be deemed to have beenpresented on the date of such entry inwards or the arrival, as thecase may be.


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After an importer has entered any imported goods under section 46or an exporter has entered any export goods under section 50 theimported goods or the export goods, as the case may be, or suchpart thereof as may be necessary may, without undue delay, beexamined and tested by the proper officer.

After such examination and testing, the duty, if any, leviable on suchgoods shall, save as otherwise provided in section 85, be assessed.

For the purpose of assessing duty under sub-section (2), the proper officer may require the importer, exporter or any other person toproduce any contract, broker's note, policy of insurance, catalogue

or other document whereby the duty leviable on the importedgoods or export goods, as the case may be, can be ascertained,and to furnish any information required for such ascertainment whichit is in his power to produce or furnish, and thereupon the importer,exporter or such other person shall produce such document andfurnish such information.


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The importer of any goods, other than goods intended for transit or transshipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in theprescribed form.

Save as otherwise permitted by the proper officer, a bill of entry shallinclude all the goods mentioned in the bill of lading or other receiptgiven by the carrier to the consignor.


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Restrictions on custody and removal of imported goods: All imported goods unloaded in a customs area shall remain in the

custody of such person as may be approved by the Commissioner ofCustoms until they are cleared for home consumption or arewarehoused or are transshipped in accordance with the provisionsof Chapter VIII.

The person having custody of any imported goods in a customsarea, whether under the provisions of sub-section (1) or under anylaw for the time being in force, - Shall keep a record of such goods and send a copy thereof to

the proper officer; Shall not permit such goods to be removed from the customs

area or otherwise dealt with, except under and in accordancewith the permission in writing of the proper officer.


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If goods are imported into India after exportation there from, suchgoods shall be liable to duty and be subject to all the conditions andrestrictions, if any, to which goods of the like kind and value are liableor subject, on the importation thereof.

Refund of export duty in certain cases. Where on the exportation of any goods any duty has been paid,

such duty shall be refunded to the person by whom or on whosebehalf it was paid, if -

the goods are returned to such person otherwise than by wayof re-sale;

the goods are re-imported within one year from the date ofexportation; and

an application for refund of such duty is made before theexpiry of six months from the date on which the proper officer makes an order for the clearance of the goods.


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If any goods brought into India from a place outside India are notcleared for home consumption or warehoused or transhipped withinthirty days from the date of the unloading thereof at a customsstation or within such further time as the proper officer may allow or ifthe title to any imported goods is relinquished, such goods may, after

notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof.


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N otification of special economic zone- The Central Governmentmay, by notification in the O fficial Gazette, specify specialeconomic zones comprising specifically delineated areas where anygoods admitted shall be regarded, in so far as duties of customs areconcerned, as being outside the customs territory of India

Exemption from d u ties of c u stoms - Without prejudice to theprovisions of sections 76F, 76G and 76H, any goods admitted to aspecial economic zone shall be exempt from duties of customs.


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Power to search suspected persons entering or leaving India: If the proper officer has reason to believe that any person to whom this

section applies has secreted about his person, any goods liable toconfiscation or any documents relating thereto, he may search thatperson.

Power to search suspected persons in certain other cases. If an officer of customs empowered in this behalf by general or special

order of the Commissioner of Customs, has reason to believe that anyperson has secreted about his person any goods , he may search thatperson.

The goods referred to in sub-section (1) are the following: - gold; diamonds; manufactures of gold or diamonds; watches; any other class of goods which the Central Government may, by

notification in the O fficial Gazette, specify.


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If an officer of customs empowered in this behalf by general or special order of the Commissioner of Customs has reason to believethat any person in India or within the Indian customs waters has beenguilty of an offence punishable under section 135, he may arrestsuch person and shall, as soon as may be, inform him of the grounds

for such arrest.


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If the Assistant Commissioner of Customs or Deputy Commissioner ofCustoms, or in any area adjoining the land frontier or the coast ofIndia an officer of customs specially empowered by name in thisbehalf by the Board, has reason to believe that any goods liable toconfiscation, or any documents or things which in his opinion will be

useful for or relevant to any proceeding under this Act, are secretedin any place, he may authorize any officer of customs to search or may himself search for such goods, documents or things.


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False declaration, false doc u ments, etc. - Whoever makes, signs or uses, or causes to be made, signed or used, any declaration,statement or document in the transaction of any business relating tothe customs, knowing or having reason to believe that suchdeclaration, statement or document is false in any material

particular, shall be punishable with imprisonment for a term whichmay extend to six months, or with fine, or with both.

O bstr u ction of officer of c u stoms. - If any person intentionallyobstructs any officer of customs in the exercise of any powersconferred under this Act, such person shall be punishable with

imprisonment for a term which may extend to six months, or with fine,or with both.


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If any officer of customs enters into or acquiesces in any agreementto do, abstains from doing, permits, conceals or connives at any actor thing whereby any fraudulent export is effected or any duty ofcustoms leviable on any goods, or any prohibition for the time beingin force under this Act or any other law for the time being in force

with respect to any goods is or may be evaded, he shall bepunishable with imprisonment for a term which may extend to threeyears, or with fine, or with both. If any officer of customs, -

requires any person to be searched for goods liable to

confiscation or any document relating thereto, withouthaving reason to believe that he has such goods or document secreted about his person, he shall be punishablewith imprisonment for a term which may extend to six months,or with fine which may extend to one thousand rupees, or with both.


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custom procedures in foreign trade

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