IMPORTS

 

What is meant by import?
What are the basic requirements to import goods?
What is Import General Manifest (IGM)?
When should the  Bill of Entry be filed ?
Can the importers/Exporters themselves clear their goods or is it necessary to appoint any agent?
What the different kinds of Bills of Entry?
What are the documents to be filed to clear the imported goods for home consumption?
What is the procedure to clear imported goods for home consumption in the manual system of filing Bill of     Entry?
What is First Appraisement system (First Check)?
What is second appraisement (Second Check)?
What is the time limit to clear the imported goods?
What is the time limit allowed to pay duty on a Bill of entry assessed to duty?
When a consignment arrives and its details are not known to file a Bill of entry, what is the procedure to be followed ?
What are the advantages in presenting Bill of entry before the arrival of the Vessel / Aircraft ?
If the import license is registered with one Customs House, but the goods are landed in some other port, what is the procedure to be followed to clear the goods in that port?
When a consignment requiring import license has landed in a port, but the license is held up elsewhere, is there any provision to clear the goods pending production of license?
What is Provisional Assessment? What are the circumstances under which provisional assessments areresorted to?  What is the authority to make such assessment?
Is there any provision to relinquish the title of imported goods by the owner and avoid payment of duty?
What is ‘Green Channel procedure’ for clearance of imported goods?
What is “Self assessment procedure” for clearance of imported goods?
What is the Procedure for importing goods through Post? What is the relevant date to levy duty on goods imported by post?

 

Q.1          What is meant by import?

 

A.                  As per (Section 2 (23) of the Customs Act 1962) Import means bringing any goods into India from a place outside India.   It has been the contention of the department; the import is complete the moment the goods have been brought within the limits of the territorial waters of India.  The Gujarat High Court has taken the view that when Section 12 of the Customs Act refers to ‘exportation or importation into’ of goods the reference is to the landmass of India not the Territorial waters of India (Prabhat cotton & Silk Mills v. U.O.I – 1982 (10) E.L.T. 203(Guj.DB)

 

 

   

Q.2          What are the basic requirements to import goods?

 

A.                   Any body intending to import goods for commercial purpose has to submit an application to the Directorate General of Foreign Trade and obtain Importer and Exporter Code (IEC) number.  In the case of 100% EOUs / EPZs the importer and Exporter Code (IEC) numbers are allocated by the Development Commissioner of Export Processing Zone concerned.  This number has to be indicated in the documents filed with the Customs for clearance of the imported goods.  This number is not required in the case of import of gifts and baggage. From April’2001 the IEC will be replaced with the PAN number issued by the Income Tax authorities. This will be the uniform identification number for transaction with any Government agencies like Customs, Central Excise etc.

 

Every goods imported shall be in conformity with Section 11 of the Customs Act 1962, Foreign Trade (Development & Regulation) Act 1992 read with the EXIM policy in force. Those goods which are not falling within the parameter of EXIM Policy are normally confiscated or allowed to redeemed on payment of fine / penalty.  

 

 

Q.3          What is Import General Manifest (IGM)?

 

A             Import General Manifest (IGM) is a document to be filed in prescribed form with the Customs by the carriers of the goods i.e., the Steamer Agent or Airlines in terms of Section 30 of the Customs Act 1962.  This document indicates the details of all the goods to be unloaded at the Port from a vessel (ship) or Aircraft.  Particulars of goods to be transshipped, private property of the crew and Arms and Ammunition, Gold and silver should also be declared separately irrespective of whether for landing, for transshipment or for being carried as same bottom cargo.  The IGM has to be filed within 24 hours after arrival of the Ship /Aircraft. However, in the case of vessel (ship) the Manifest may be delivered even before the arrival of the vessel. This is known as ‘Prior Entry Import General Manifest’.  This system enables the importers to file Bills of entry and get them assessed and pay duty so that the goods can be taken delivery soon after the unloading. 

 

 

 

 

Q.4          When should the Bill of Entry be filed?

 

A.                  Bill of entry can normally be filed to clear the goods after the Import General Manifest (IGM) is presented to the Customs Officers by the Steamer Agents / Airlines, as the case may be.  In exceptional cases the customs authorities may note the Bill of entry before the Manifest is filed. In addition to the goods entered in the vessels manifest Bills of Entry are also required for the clearance of :

 

(a)   Ship’s Stores, if in considerable quantities

(b)   Ship’s ballast such as stone, sand shingla etc.

(c)   Salvaged goods

(d)   “Sweepings” of Import Cargo.

 

No Bill of Entry is however required in the following cases :

 

(i)       Passengers Baggage

(ii)      Favour Parcels

(iii)    Mail Bags and Post Parcels

(iv)    Boxes, Kennels of Cages containing live animals or birds

(v)     Un-serviceable stores, e.g. Dunnage wood, Empty bottles, drums etc. of reasonable value.

(vi)    Ship’s stores in small quantities for personal use.

(vii)  Cargo by sailing vessels from Customs Ports when landed at open bunders only.

 

 

 

 

 

 

Q.5          Can the importers/Exporters themselves clear their goods or is it necessary to appoint any agent?

 

A.                  The importers/exporters themselves can clear the goods by filing necessary document after taking permission from the Asst. Commissioner/Deputy Commissioner in charge of Import section.  The agent, if appointed, should be a holder of a valid license issued by the Commissioner of Customs.  Such agents are known as Customs House Agents.

 

   

 

 

 

   

Q.6            What the different kinds of Bills of Entry?

 

A             There are generally three kinds of Bills of Entry.

 

(i)                   Home consumption Bill of entry in white colour: This has to be filed when the importer wants to clear the goods on payment of duty and remove them to his premises immediately. (Section 46 of the Custom Act 1962).

 

(ii)                 Into bond Bill of entry in buff colour:  It is also known as Warehousing Bill of Entry.  This has to be filed when the importer does not want to pay duty immediately but prefers to keep the goods in a warehouse and pay the duty subsequently and clear the goods for home consumption. (Section 46 and 60 of Custom Act 1962)

 

 

(iii)              Ex-bond Bill of entry in green color:  This has to be filed when the importer wants to clear the warehoused goods for home consumption on payment of duty (Section 68 of Customs Act 1962).

 

Note: In respect of importation by Defence establishments, Pink Bills of Entry are used for noting and issuing pass out orders.

 

 

Q.7     What are the documents to be filed to clear the imported goods for home consumption?

 

A.                   The main documents to be filed are the home consumption Bill of Entry in the prescribed form after filling up various columns are as under:

 

1.        Copy of order/contract.

2.        Supplier’s invoice in four copies.

3.        Copy of the letter of credit.

4.        Import licence.

5.        Bill of lading (original and non-negotiable).

6.        Packing list (2 copies).

7.        Weight specification.

8.        Freight insurance memo

9.        Manufactures test certificate.

10.     Exchange slop for purpose of exchange rate.

11.     Certificate of origin.

12.     Delivery order issued by shipping company, its agent or carriers.

13.     If spare parts are being imported invoice should indicate unit price and extended total of each item.

14.     If invoice is for FOB, freight charges and insurance premium amount certificate should be attached.

15.     OGL declaration.

16.     No Commission letter to be given by importer i.e., Agent’s Commission, if any has not been paid in India.

17.     Customs declaration (4 copies)

18.     Catalogue/write/up/drawing for machinery items.

19.     Importer Exporter Code Number.

20.     If second hand machinery is being imported then Chartered Engineers certificate is necessary as per the Import Export Policy

21.     If steel is being imported then analysis certificate from manufacturers.

22.     In the case of chemicals & allied products like synthetic resin wax, literature showing chemical composition.

23.     Textile Commissioners endorsement in respect of textile items.

 

Apart from the above the importers are also required to file declaration in the prescribed form by the importers regarding correctness of the contents and the value of the goods,  The Assessing officer may call for any other documents/information if found necessary, to determine the correct value and correct rate of duty (Section 46 and 17 of the Customs Act,. 1962)

 

 

For Chapter wise Details of documents to be filed please see under Customs Procedures for Clearance of Imported goods

 

 

 

 

 

Q.8          What is the procedure to clear imported goods for home consumption in the manual system of filing Bill of Entry?

 

A.            The importer/authorized agent has to file a home consumption Bill of Entry in quadruplicate in the Import Department of Customs after filling up various columns in the Bill of Entry along with documents mentioned above.  The noting clerk in the Import department verifies the details furnished in the Bill of Entry with reference to the Import General Manifest and assigns a serial number and affixes the date stamp and initials it.   The Bill of entry is then forwarded to the assessing officer (Appraiser/ Superintendent) for assessment.  After scrutiny of the documents the Assessing officer may depending upon the circumstances, assess the Bill of Entry under two different systems known as (First appraisement (First Check),  Second appraisement (Second Check)).  The Bill of Entry is then counter signed by the Assistant Commissioner.  Clearance of goods for home consumption is allowed after examination of the goods and on payment of duty.

 

 

 

 

 

Q.9          What is First Appraisement system (First Check)?

  A             After the Bill of entry is noted in the Import Department, it goes to the assessing officer for assessing.  On scrutiny of the documents submitted, if the assessing officer finds it necessary to examine the goods first, to decide the correctness of value and classification of the goods under the customs and central excise tariffs or at the request of the importer, he gives an examination order on the reverse side of the original copy of bill of entry and returns to the importer or his agent.  The bill of entry along with other documents is presented to the officer in charge of examination of the goods.  As indicated by the assessing officer on the reverse side of the original bill of entry, examination is carried out and the report furnished by the Examining officer on the reverse of the original copy of bill of entry.  The bill of entry is then forwarded to the assessing officer who verifies the examination report with reference to the declarations made by the importer.  The assessing officer verifies the correctness of value and classifies the goods and indicates the rates of basic customs duty leviable under the customs tariff and additional duty of customs leviable and signs the Bill of entry.  The Bill of entry is then forwarded to the Assistant Commissioner for countersignature.  Wherever there is an import license it is debited with the value/quantity or both. Thereafter, the amount of duty is worked out and mentioned on the Bill of entry. The Importer or his Agent should pay the indicated duty in the Customs treasury / or in the authorized Bank.  The clerk concerned then detaches the original copy of the Bill of entry. The authorized customs officer gives an order on the reverse of the duplicate copy of the bill of entry permitting clearance of the goods for home consumption.  This order is known as Passed out of Customs Charge’.  The duplicate is then presented by the importer / agent to the custodian who delivers the goods after collecting their dues, if any (Sections 17(1) and 47(1) of the Customs Act, 1962.  

 

 

 

Q.10        What is second appraisement (Second Check)?

  A             After the Bill of Entry is noted, it is forwarded to the Assessing officer, if all the documents/information are available to determine the correctness of value and classification under the Tariff, the Assessing Officer makes assessment straight away and gives the examination order on the reverse of the duplicate copy of the Bill of entry and then the Bill of entry is forwarded to the Assistant Commissioner for countersignature.  Wherever there is an Import license/customs clearance permit (CCP) it is debited with the value/quantity or both.  Thereafter, the amount of duty is calculated and mentioned on the Bill of entry.  The bill of entry is then pre-audited by the Internal audit department.  Thereafter, the duty as indicated in the Bill of entry has to be paid in the custom treasury or in the authorized Bank.  The clerk concerned detaches the original copy of the Bill of entry after payment of the duty and the rest of the copies of bill of entry and other documents are returned to the importer/agent, after which it has to be presented to the officer in charge of examination. The officer concerned carries out examination as indicated by the Assessing officer on the reverse of the duplicate copy of the bill of entry and writes his examination report on it.  If the examination reveals that the goods imported are in conformity with the declaration in the documents, he gives an order on the reverse of the duplicate copy of Bill of entry permitting clearance of goods for home consumption.  This order is known as Passed out of Customs Charge’ (Sections 17(1) and 47(1) of the Customs Act, 1962.

   

 

 

Q.11        What is the time limit to clear the imported goods?

 

A.            Any imported goods should be cleared for home consumption or warehoused or transshipped within thirty days from the date of unloading the goods at a Customs station or within such extended time allowed by the proper officer (Section 48 of the Customs Act 1962)

 

 

   

 

 

Q.12        What is the time limit allowed to pay duty on a Bill of entry assessed to duty?

 

A             Duty has to be paid within two days from the date on which the Bill of entry is returned after assessment to the Importer/agent for payment of duty.  If the duty is not paid within the stipulated time, interest on amount of duty is also payable.  (Section 47 of the Customs Act 1962)

 

 

 

 

Q.13        When a consignment arrives and its details are not known to file a Bill of entry, what is the procedure to be followed?

 

A             The importers have to make a representation to the Assistant Commissioner of the Customs for permission to examine the goods before filing the Bill of entry in the presence of the Customs Officer to ascertain the details of the goods and then file the Bill of Entry (Section 46 of the Customs Act 1962). They have to follow First Appraisement Procedure as enumerated above.

 

 

 

 

 

Q.14        What are the advantages in presenting Bill of entry before the arrival of the Vessel / Aircraft?

 

A             If all the documents are available, the prior entry bill of entry can be presented and got assessed and the duty if any paid .  Therefore, as the goods land, they can be examined and the delivery taken without any loss of time and without paying demurrage charges.

   

 

 

 

 

Q.15        If the import license is registered with one Customs House, but the goods are landed in some other port, what is the procedure to be followed to clear the goods in that port?

 

A             An import license is normally issued by license issuing authority indicating the port of registration as requested by the importers.  In other cases where port of registration is not mentioned, the port where first importation takes place, the licences are registered.  Customs authorities debit the quantity and value of the consignment, whenever the goods covered by that license, are imported through that Port before the goods are allowed for clearance.  But, if any consignment covered by that license is landed in some other port and if it is to be cleared there itself, the importers have to make an application to the customs authorities where the license is registered requesting them to issue a Telegraphic release advice (TRA) / Release advice to the other custom house indicating the details of the import license, quantity, value, etc.  Accordingly, the release advice is issued from the port of registration to the other Custom House after debiting the quantity and value in the license. The other custom House allows clearance of the goods on the basis of such advice if it is found valid to the goods imported.

 

 

 

 

Q.16        When a consignment requiring import license has landed in a port, but the license is held up elsewhere, is there any provision to clear the goods pending production of license?

 

A             The importer has to produce acceptable documentary evidence to show the Customs authorities where the goods are landed, that they are in possession of a valid import license, but not able to produce it immediately, and request for releasing the consignment on execution of a license bond with surety, pending production of the license/release advice.  The Customs authorities may allow clearance on the strength of such bond and guarantee executed (Section 143 of customs Act 1962).

 

 

 

 

Q.17        What is Provisional Assessment? What are the circumstances under which provisional `   assessments are resorted to?  What is the authority to make such assessment?

 

A             When an importer or exporter is unable to produce any documents or furnish any information necessary for assessment of duty on the imported or export goods, he may request for provisional assessment of the goods pending production of such documents, furnishing such information.

 

Where the importer or the exporter has produced all the documents and furnished full information but the proper officer of customs may deem it necessary to make further enquiry for assessing the duty, he may resort to provisional assessment, pending such enquiry. (Section 18 of The Customs Act 1962 authorizes provisional assessment)

 

For making provisional assessment the importer or exporter is required to execute a bond for the differential amount of duty between the duty provisionally assessed and the duty most likely to be assessed at final assessment stage.  The importer or exporter is also required to deposit with the customs a sum not exceeding twenty percent of the provisional duty as determined by the proper officer of customs.  On execution of bond and depositing the sum, goods may be released .

 

On receipt of all the necessary documents/ information or on completion of enquiry, the proper officer of customs finalizes assessment. If the duty finally assessed is more than the provisional duty collected, the difference is payable by the importer/exporter. If the duty provisionally collected is more than the duty finally assessed the difference is refundable to the importer/ exporter.

 

 

 

 

 

Q.18        Is there any provision to relinquish the title of imported goods by the owner and avoid payment of duty?

 

A             The owner of any imported goods may relinquish his title to the goods at any time before an order for clearance of goods for home consumption is passed or the proper officer of customs passes an order permitting the deposit of the goods in the warehouse.   Then the owner of the goods shall not be liable to pay duty on such goods (Section 23 (2)of the customs act 1962).   In other words, once the proper officer of customs passes an order permitting clearance of goods for home consumption or for depositing in a warehouse the owner loses the right to relinquish his title to the goods and his liability to pay duty remains. It may be also clarified that goods once warehoused cannot be abandoned or title can be relinquished.

 

 

 

 

Q.19         What is ‘Green Channel procedure’ for clearance of imported goods?

 

A.                             Green Channel procedure has been introduced in major Custom Houses on experimental basis to expedite clearance of imported goods.  This procedure is applied only in respect of certain specified Imports.  Some of such imports identified are-

 

a)       Goods imported by Government departments and public sector undertakings, which do not require physical identification for the purpose of either ITC classification/restrictions or customs classification.

b)       Imports under project Import Regulations.

c)       Bulk imports sourced directly from reputed suppliers.

d)       Consignments, which consist of single product of a well-known brand or specification, tested earlier land, covered by valid test report of an earlier import.

e)       Imports by imparters with proven identity and unblemished record of past conduct.

                 The Bills of Entry under this procedure are processed and assessed to duty under the second appraisement system ie., assessment and duty collection is done first and then consignment examined.  In such cases the Assessing Officer indicates on the reverse of the duplicate Bill of Entry to the Appraiser in charge of examination to ‘Inspect the lot and check marks and numbers on the packages’.  After inspection of the lot and marks and numbers of the packages with reference to the declaration in the Bill of Entry and other connected documents, the Docks Appraiser gives ‘Passed out of Customs’ order.  The Docks Appraiser, in the presence of Assistant Commissioner may, examine the goods in exceptional cases. Any discrepancy on examination with regard to description, quantity, weight, declaration made with regard to value, etc, will bar the importer from utilizing this scheme in future.  The department may also initiate any other action under the law depending upon the nature of mis-declaration etc.  The facility of ‘Green Channel’ clearance is not extended in cases of goods sought to be cleared under the “Self Assessment” procedure.

 

 

 

 

 

Q.20        What is “Self assessment procedure” for clearance of imported goods?

 

A             To simplify import procedures and expedite clearances the Government of India introduced the procedure of ‘Self Assessment’, of Bills of Entry in major Custom Houses.  According to this procedure the importers of repetitive imports can assess their own Bills of Entry showing previous clearances and assessment of the same goods.  The Bill of Entry under this procedure will have a ‘green coloured band’ at the edges to distinguish it from other Bills of Entry.  Such Bills of Entry after self-assessment are presented to the noting clerk in the Custom House who assigns a Sl.No. and affixes the date stamp with initials.  The amount of duty payable is mentioned on the Bill of Entry.  Thereafter, the importers/their agents should pay the duty in the Customs Treasury (Cash Section).  After collecting duty the cash section detaches the original copy of Bill of Entry and the remaining copies with other documents are sent to the ‘Appraiser in charge of examination who will complete the assessment of the Bill of Entry with reference to the documents submitted along with a copy of Bill of Entry for the same goods assessed and cleared earlier.  The goods are then examined as usual and clearance is allowed if the goods are found to agree with the declaration.

 

Such Bills of Entry are subjected to the post clearance audit .  This ‘Self Assessment ‘ procedure is now extended only in the major Custom Houses in repect of the following cases.

 

i)              Imports made by (a) Government departments (b) public sector undertakings and other importers with proven identity and unblemished record of past conduct.

 

ii)            The goods in question do not require any import license/Customs clearance permit nor or they subject to any restriction/prohibition.

     

iii)                             The assessment and release of goods do not involve acceptance of bond including test bond and end use bond.

 

iv)                            The assessment does not involve original examination of the goods in question.

 

 

 

 

 

Q.21        What is the Procedure for importing goods through Post? What is the relevant date to levy duty on goods imported by post?

 

 

A.            Subject to prohibition/restrictions goods(either gifts or commercial) can be imported by post.  All the foreign parcels are routed through foreign post offices. The postal authorities prepare a list called ‘Way Bill’ giving the details of the parcels and present the same along with the parcels to the customs officers posted there.  After examination, the parcels are allowed to be delivered to the addressee if nothing objectionable is found and no duty is chargeable. In case duty is chargeable the amount of duty is indicated by the customs.  The postal authorities collect the duty as indicated by the customs and the postal service charges, if any, and deliver the parcel to the addressee.  In case any documents are required to assess the parcel the Customs authorities call for the same from the addressee and complete assessment on receipt of the required documents, and thereafter the postal authorities deliver the parcels to the addressee after collecting the duty assessed by customs and the postal service charges , if any.

 

Relevant Date : The relevant date to levy duty on goods imported by post is the date on which the postal authorities present to the proper officer of Customs a list containing the particulars of such goods for the purpose of assessment.

 

                 If such goods (post parcels) are imported by a vessel (ship) and the list of the goods is presented by the postal authorities to the Customs Officer before the date of arrival of the ship the rate of the duty in force on the date of arrival of the vessel is applicable (Section 83 of the Customs Act,1962).