Import MGMT l7

Import Management
How to start Imports

TYPES OF EXPORT BUSINESSES Export-Traders (Merchant Exporters) Export-Manufacturers Service-Exporters FORMS OF BUSINESS ORGANIZATION SOLE PROPRIETORSHIP
PARTNERSHIP
Registration with State Government authority-Registrar of Firms
How to start Imports

FORMS OF BUSINESS ORGANIZATION
COMPANY/CORPORATION
Registration with Registrar of Companies (ROC) appointed under Section 609 of the Companies Act.
Registration under the Cooperative Societys Act
CO-OPERATIVE SOCIETY
Mandatory Registrations
PERMANENT ACCOUNT NUMBER: Permanent Account Number is to be obtained from Income Tax Authorities. [http://incometaxindia.gov.in/PAN/Overview.asp] BANK ACCOUNT : An exporter/importer should necessarily have a current account with a bank. Only some branches are authorized to deal in foreign exchange transactions and therefore for a smooth working of export / import business, it is necessary to have an account with a branch having a foreign exchange department. ( Authorized Dealers Banks) IMPORTER-EXPORTER CODE (I.EC) NUMBER: The Foreign Trade Policy lays down IEC number as basic eligibility criteria to become Exporter / Importer. It is allotted by Regional Licensing Authority i.e. Joint Director General of Foreign Trade.
[www.dgft.gov.in]
Registration-cum-Membership: Any person, applying for (i) a licence/ certificate/ permission/ Authorisation to import/ export, [except items listed as restricted items in ITC (HS)] or (ii) any other benefit or concession under this policy are required to furnish Registration-cum-Membership Certificate (RCMC) granted by the competent authority [respective Export Promotion Council] unless specifically exempted under the Policy.
EXPORTERS / IMPORTERS PROFILE Each importer/exporter shall be required to file importer/exporter profile with the licensing authority in Part 1 of Aayaat Niryaat Form
SSI: Small Scale and ancillary units (i.e. undertaking with investment in plant and machinery of less than Rs. 100 million) should seek registration with the Director of Industries of the concerned State Government http://ssi.gov.in or http://www.laghu-udyog.com/howtosetup/grgxx01x.htm
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Industrial Licence: All industrial undertakings subject to compulsory industrial licensing are required to submit an application in the prescribed format, i.e. Form FC-IL. Licenses are granted under the provisions of the Industries (Development and Regulation) Act, 1951. The form is available in the Entrepreneur Assistance Unit (EAU) of the SIA and at all outlets dealing in Government Publications, Indian Embassies, and can also be downloaded from the web site of the DIPP (http://dipp.nic.in). Industrial Entrepreneurs Memorandum: Industrial undertakings exempt from industrial license, including existing units undertaking substantial expansion, are required to file an Industrial Entrepreneur Memoranda (IEM) with the Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India. (http://dipp.nic.in)
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Excise Registration: Once the need for registration is established, before starting production or dealership to issue Cenvatable invoices, one needs to obtain registration by applying in Form A-1 in duplicate to the Jurisdictional Deputy / Assistant Commissioner of Central Excise or Customs in-charge .
Bond with Assistant Commissioner of Central Excise or Maritime Commissioner of Central Excise:
Any excisable goods can be exported without payment of duty from the factory or warehouse or any other premises as may be approved by the Commissioner. As per sub rule (2) of the said Rule 19, any premises from where any input is removed without payment of duty for use in the manufacture of export goods may also be approved by the Commissioner.
Bond with Assistant Commissioner of Central Excise or Maritime Commissioner of Central Excise: Goods manufactured from inputs obtained under bond, should be exported only under bond. The export under Bond is subject to the conditions safeguards and procedures to be notified by the Board. In this respect following Notifications have been issued :(a) Notification No. 42/2001-C.E.(N.T.), dated 26-6-2001 for export under bond of all excisable goods except to Nepal and Bhutan. (b) Notification No. 43/2001C.E.(N.T.), dated 26-6-2001 for export under bond after procuring the inputs duty free under end-use exemption Rules. (c) Notification No. 44/2001C.E.(N.T.).dated 26-6-2001 for export under bond on removal of intermediate goods without payment of duty, for manufacture and export by holder of Advance Licence.
(d) Notification No. 45/2001-C.E.(N.T), dated 26-6-2001 for
Customs 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. Under the EDI System, PAN based BIN is received by the Customs System from the DGFT online. The exporters are also required to register authorised 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.
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Commercial / Regulatory Documents

Commercial set of documents are mainly used for Commerce. In other words these are documents normally exchanged between buyer and seller. Regulatory documents are required in dealing with various regulatory authorities such as customs, RBI, Excise, Licencing authorities Inspection and other Export Promotion bodies for availing incentives etc.
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Commercial / Regulatory Documents

Referring to the Commercial set of documents, it may please be observed that these set of documents are prepared from other set of documents (some of these only). These are known as auxiliary documents. These documents may not be required by the foreign buyer, but these are must for preparation of main export documents, known as Principle Commercial Documents. Commercial Documents Principal 1. Commercial Invoice 2. Inspection Certificate Inspection 3. Insurance Certificate Insurance 4. Certificate of Origin Certificate 5. Bill of Lading 6. Shipment Advice 7. Packing List Auxiliary 1. Proforma Invoice 2. Intimation for
3.
4.
Declaration
for
for
Application of Origin 5. Mate Receipt 6. Shipping order 7. Shipping Instructions
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Pre-shipment Documents
Documents at pre-shipment stage are those documents, which are required to be made, till the consignment is presented to the customs department for clearance. The following documents can, therefore, be treated as preshipment documents:Proforma Invoice Confirmed order or contract Letter of Credit Pre-shipment Inspection Certificate Packing list Shipping Bill Export Declaration Forms (GR/SDF) ARE
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Documentation For Execution
Pre Shipment
Pre shipment Document to CHA Loading at Port Obtaining B/L Copies of Documents Back to Exporters Movement of Cargo
Stuffing of Cargo Insurance Policy
Preparation of Documents for Bank
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Documentation For Export Benefits
Pre Shipment
Jt. DGFT Appln for Advance Authorisation/ DFIA Appln for EPCG Autho.
Customs Excise To be done Bond / ARE By CHA Formalities (Stuffing Permission Etc. on the basis of Shipping Bill)
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Post Shipment
Documents at Post-shipment stage are naturally those which are prepared after the shipment. These documents include the following:Mate Receipt Bill of Lading Airway Bill Roadway/Railway Bill Post Parcel/ Courier Receipt Invoices (including consular invoice) Certificate of Origin Insurance Certificate or Policy Bill of Exchange BRC
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Documentation For Execution
Post Shipment
Submission of documents to bank Negotiation Realisation Obtaining Bank Certificate
E.P. Copy of shipping bill A.R.E. / Bank Certificate Claiming different Benefits
Maintenance of statutory records
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Documentation For Export Benefits

Post Shipment
Jt. DGFT Adv. Autho. Completion Closure of file EH Appln Post Export DEPB Verification of DEPB Release of Bond + BG incase of Adv. Autho. OR Rebate of Excise Duty (Post Exports) Customs Obtaining DBK (All Ind. Rate or Brand Rate) Excise Submission of Proof of Exports against Bond
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Important Documents
Commercial Invoice Certificate of Origin Insurance Policy Bill of Lading/AWB Shipping Bill, Bill of Entry Letter of Credit Bank Certificate of Export and Realisation Quality/Inspection/Analysis Certificate Licences / Authorisations ARE
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Understanding Documents
All documents whether it is for export or import transaction generally contain following information
Name and address of the exporter and importer Document No. and date. Order No. and date Port of discharge Place of destination Country of origin Description of Goods Marks and nos., model nos. [if any] Weight ITC HS Code No. Value Currency Terms of payment Terms of shipment etc.
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Understanding Documents
However, depending upon the nature of the document, specific information is to be mentioned. For e.g. apart from the above details, Shipping Bill will include what export benefit is being claimed against that particular shipment, etc. Similarly, Packing List will give information about how goods are packed.
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Import Management agenda

Importance and Need for Imports
Sourcing the Imports

Customs Organisation Customs Rules and Regulations
Import of Technology
Project Import Courier Imports Re-import/Re-export Warehousing
Agenda
Demands
Refunds
Customs Valuation Assessment and Examination of Goods
Accredited Clients Programme [ACP]

Common Aspects between Customs and Excise Settlement Commission Advance Ruling

To meet domestic demand.
To meet demand of inputs for exports.

Import of essential commodities like petrol, wheat, fertilizers etc.
To import defense requirements including arms and ammunitions.

Import if technology prototypes and samples
To maintain Balance of Imports and Exports
Import Tariff Structure

Basic Customs Duty
Based on the First schedule to the Customs Tariff Act (CTA), 1975.
Additional Duty of Customs [CVD] Normally charged @10% Levied under Section 3(1) of CTA, 1975

Education Cess Charged @ 2% on CVD and Aggregated Customs Duty [BCD+ CVD+ Education Cess on CVD] Levied under Section 91-94 of the Finance Bill 2004
Secondary and Higher Education cess Charged @ 1% on CVD and Aggregated Customs Duty Levied under Section 126, 128 and 129 of the Finance Bill 2007 [Announced in Budget 2007-08]

Special CVD Charged @ 4% Levied under Section 3(5) of CTA, 1975 Preferential Duty Applicable on imports from Preferential areas Seychelles, Mauritius and Tonga only are notified in the Preferential Areas category. Exemption Notifications The scheduled rate of basic duty is exempted by a notification issued under Section 25(i) of the Customs act, 1962.

Anti-dumping and Safeguard Duties Levied under Section 9A and 9B of CTA 1975. A National Calamity Duty (NCD) on tobacco products, motor spirit, polyester filament yarn, motor vehicles and two wheelers.
MRP Based Countervailing Duty

In this the retail value marked on the package after standard abatement is used to arrive the value at which the duty is to be charged.
CVD (Countervailing duty) of Sales Tax

Under Section 3(5) of Customs Tariff Act (CTA), 1975 The new tax is currently applicable on zero duty items under 217 lines of the ITA (Information Technology Agreement).

Additional Duties under Section 3 of Customs Tariff Act (CTA), 1975
Duties apart from the main duty under Central Excise Act, 1944 are also levied as additional duties of customs on goods covered by the respective main Act. Some of them are listed below The Agricultural Produce Cess Act, 1940. The Coffee Act, 1942. The Rubber Act, 1947. The Industries (Development and Regulation) Act, 1951 The Salt Cess Act, 1953 The Tea Act, 1953 The Medicinal and Toilet Preparations (Excise Duties) Act, 1955.
Calculation of Customs Duty
Assessable value (A) Basic Customs Duty @ 7.5% (B) (A + B) = (C)
100.00 7.50 107.50
CVD @ 8% (CVD) (a)

Edu. Cess @ 2% on CVD (b) Higher & Sec. Edu. Cess 1% on CVD (b1) Total CVD incl. cess (a+b+b1) = (D)
8.60
0.17 0.09 8.86
(C + D) Total
Total Aggregated Customs Duty (E) = (116.36 - A) Edu. Cess @ 2% on Aggtd. Customs duty (E1) Higher & Sec. Edu. Cess @ 1% on Aggtd. Customs duty (E2)
116.36
16.36 0.33 0.16
Total Customs Duty (C+E+E1+E2) = F

ADDITIONAL CUSTOMS DUTY @ 4% (F x 4%) = (G) GRAND TOTAL AFTER ADDING ADDL.CUS.DUTY @4% (H)
116.85
4.67 21.52

PRELIMINARIES FOR STARTING IMPORT BUSINESS
It involves the following:

Selecting the commodities. Selecting the Overseas supplier. Capability and credit-worthiness of the supplier. Role of Overseas Suppliers agents in India. Finalising the terms of import. Mode of Pricing and INCO terms. Mode of settlement of payment. Currency of invoicing.

SELECTING THE COMMODITIES
Proper selection of the commodity will depend upon various commercial and legal considerations such as Importability of item according to ITC HS Book
SELECTING THE OVERSEAS SUPPLIER

Production capability Reputation Trade Barriers & Legal Complications Track record Whether any indenting agent is available in India?

GETTING INFORMATION ABOUT OVERSEAS SUPPLIERS:
Sources : Trade directories and yellow pages Consulate Generals and trade representatives of various countries in India and abroad. International trade fairs and exhibitions for which you may contact International Trade Promotion Organisation (ITPO) Chambers of Commerce, trade associations Indenting agents of foreign suppliers Advertisement in foreign papers Publications etc. Internet Friends and relatives in foreign countries.

CAPABILITY AND CREDITWORTHINESS OF OVERSEAS SUPPLIER
Confidential reports about the supplier may be obtained through the banks and Indian embassies abroad or trade information centers of the country concerned. The importer can also take the assistance of Credit Information Agencies such as ECGC for specific commercial information on overseas suppliers.

ROLE OF OVERSEAS SUPPLIERS AGENTS IN INDIA
Procures orders from the Indian parties and arrange for the supply of goods from their principal abroad.
Advisable as they can be readily contacted in case of any difficulty with regard to quality of goods, payment and documentation etc.

FINALISING THE TERMS OF IMPORT
Call for samples, catalogues, literature, specification of the items before finalizing the terms of Import Order, if required. The different aspects of an import contract are enumerated as under: Product, Standards and specifications. Quantity. Inspection. Total value of the Contract. Terms of Delivery. Taxes, Duties and Charges. Period of Delivery/Shipment. Packing, Labelling and Marking. Contd..

Terms of Payment-Amount, Mode & Currency Discounts and Commissions. Licences and Permits. Insurance. Documentary Requirements. Guarantee. Force Majeure or Excuse for Non- performance of contract. Remedies Arbitration

MODE OF SETTLEMENT OF PAYMENT The import transactions are generally settled by any of the following payment modesAdvance Payment. Payment/Acceptance against Documentary collections. Payment under Letter of Credit.
Selection of mode will depend on the following factors

credit worthiness of the importer/exporter, demand for the commodity in the international market, exchange control regulations prevailing in the importing/exporting countries and other relevant factors.

CURRENCY OF INVOICING
Depending upon the relative strength of the foreign currency, one may choose to negotiate with the supplier to invoice goods in foreign currency or in Indian rupees. However, all foreign suppliers demand payment in convertible currency only.
Customs Organisation
The main functions/activities Organisation are: of the Customs
Checking importability and exportability of items Collection of duties of customs on import and export goods, including cesses, if any. Enforcement of prohibitions and restrictions, if any, in terms of various Law provisions. Prevention of smuggling; Collection of foreign trade and revenue statistics.
ORGANIZATION CHART
Minister of Finance Secretary Finance
Secretary Revenue
Secretary Expenditure Central Board of Excise & Customs
CBDT
Central Excise Appraising
Customs Preventive
Air
Sea
Land
Appeals
STRUCTURE OF CUSTOMS DEPARTMENT

Minister of Finance
Secretary Revenue Central Board of Excise & Customs Commissionerates of Customs Mumbai Kolkatta Chennai Bangalore Delhi, etc.
Principal Commissioner of Customs Commissioner Imp Exp Adj Appeals Prev. Admn. . Addl./ Jt. Commissioner /Dy. Commissioner Asst. Commissioner Appraiser
Staff
Organisational Setup
The Customs Houses are directly controlled by the Secretary, Department of Revenue in the Ministry of Finance through a Headquarters Organisation called Central Board of Excise and Customs. Each major Custom House is divided broadly into following departments : Appraising Department (both import and export and postal appraising); Prevention Department (including function of clearance of passengers at the international airports); Drawback department; Audit department; Ancillary departments including Import Noting, Bond, Statistical, Establishment Department, PRO, etc., Chemical laboratory.
Docks - The basic function of the Dock Appraising Staff is to carry out necessary examination and checks including checking the classification and value. Cargo Complex Import by Air
Customs Rules and Regulations

List of main Acts, Rules and Regulations under Customs
CUSTOMS ACT, 1962 CUSTOMS TARIFF ACT, 1975 COMPUTERS (ADDITIONAL DUTY) RULES, 2004 CUSTOMS (IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTY FOR MANUFACTURE OF EXCISABLE GOODS) RULES, 1996 RE-EXPORT OF IMPORTED GOODS (DRAWBACK OF CUSTOMS DUTIES) RULES, 1995 CUSTOMS (PROVISIONAL DUTY ASSESSMENT) REGULATIONS, 1963 CUSTOMS AND CENTRAL EXCISE DUTIES DRAWBACK RULES, 1995 CEGAT (COUNTERVAILING DUTY AND ANTI-DUMPING DUTY) PROCEDURE RULES, 1996 BILL OF ENTRY (FORMS) REGULATIONS, 1976 BILL OF ENTRY (ELECTRONIC DECLARATION) REGULATIONS, 1995 UNCLEARED GOODS (BILL OF ENTRY) REGULATIONS, 1972

COURIER IMPORTS AND EXPORTS (CLEARANCE) REGULATIONS, 1998 CUSTOMS HOUSE AGENTS LICENSING REGULATIONS, 2004 CUSTOMS REFUND APPLICATION (FORM) REGULATIONS, 1995 CUSTOMS VALUATION (DETERMINATION OF PRICE OF IMPORTED GOODS) RULES, 2007 CUSTOMS VALUATION (DETERMINATION OF VALUE OF EXPORT GOODS) RULES, 2007 BAGGAGE RULES, 1998 PROJECT IMPORTS REGULATIONS,1986 CUSTOMS (ADVANCE RULINGS) RULES, 2002 IMPORT MANIFEST (AIRCRAFT) REGULATIONS, 1976 IMPORT MANIFEST (VESSELS) REGULATIONS, 1971 CUSTOMS (SETTLEMENT OF CASES) RULES, 1999
Determinants :
Nature of Product - Whether the new technology will be easily adaptable. Price of Technology Whether the price justifiable or not,
paid
for
technology
transfer
is
whether it is worth and necessary to bring in new technology in the home market.
Contd.
Cost of Technology What costs it will add to the operations, whether such costs can be absorbed in the pricing of the products manufactured, what impact it will have on the overall operations of the company, costs related to absorption of technology, additional training costs etc. are to be considered.
Contd.
Level of Technology
Whether technology is fully automated or semi-automatic,

whether it is of first generation or advanced technology, whether the environment is conducive to accept higher level of technology, is it going to replace old machineries and techniques and whether it would be subject to becoming obsolete, if yes then within which period . Contd..
Existing level of Technology - whether it impacts manpower requirement, compliance with IT needs, etc. Local demand for the product - whether enhanced production matches with the local demand. Such mismatch would have implications on commercial viability. Country of import of technology - Track record, technology development, emphasis on R&D, etc to determine quality of technology.
Customs Tariff Heading Description
Duty Structure
Modes of Import of Technology 4906 00 00 PLANS AND DRAWINGS FOR The duty structure is 10% BCD, Drawings and Design ARCHITECTURAL, 0% are used Special CVD. Import of Drawings and Designs CVD and 4% for transfer of ENGINEERING, concepts. INDUSTRIAL, COMMERCIAL, However, as per Exemption TOPOGRAPHICAL OR Notification No. 21/2002 Dtd. SIMILAR PURPOSES, BEING 01.03.2006, S.No. 162 exempts ORIGINALS DRAWN BY these goods from payment of HAND; HAND-WRITTEN BCD. TEXTS; PHOTOGRAPHIC REPRODUCTIONS ON Hence there is no import duty SENSITISED PAPER AND payable on importation of CARBON COPIES OF THE Drawings and Designs. Since FOREGOING both duties are exempted, 4% Spl. CVD is not chargeable.
Modes of Import of Technology
Foreign Collaboration Agreement Foreign Collaboration on the other hand brings about foreign investment, capital goods, scientific technology and also critical material.
Field for Foreign Collaboration: Equity Investment Import of Capital goods, Plant Equipment and Raw Materials Transfer of Scientific Technology Import of Design and Drawings
and
Machinery,
Project Import
Project Imports
The Project Import Scheme is an Indian innovation to facilitate setting up of and expansion of industrial projects. The Project Import Scheme seeks to achieve the objective of simplifying the assessment in respect of import of capital goods and all the related items required for setting up of a project by levy of a flat rate of duty in respect of such goods. This objective has been achieved by incorporating a heading 98.01 under Chapter 98 of the Customs Tariff and prescribing a uniform customs duty rate under this heading. All the goods approved for importation in connection with an industrial project are classified under this heading. Goods classified under this heading cannot be classified under any other heading which may cover the product more specifically.
Project Imports
The different projects to which heading 98.01 applies are; irrigation project, power project, mining project, oil / mineral exploration projects, etc.
Such an assessment is also available for an industrial plant used in the process of manufacture of a commodity.
However this benefit is not available to hotels, hospitals, photographic studios, photographic film processing laboratories, photocopying studios, laundries, garages and workshops. This benefit is also not available to a single or composite machine.
Project Imports
Imports allowed
machinery, prime movers, instruments, apparatus, appliances, control gear, transmission equipment, auxiliary equipment, equipment required for research and development purposes, equipment for testing and quality control, components, raw materials for the manufacture of above items, etc.
In addition, raw material, spare parts, semi-finished material, consumable upto ten percent of the assessable value of goods can also be imported.
Project Imports
The purposes for which such goods can be imported are for initial setting up or for substantial expansion [at least 25% increase in the existing capacity] of a unit of the project.
The Central Government has formulated the Project Import Regulations (PIR) prescribing the procedure for effecting imports under this scheme.
Courier Imports & Exports
Courier Imports and Exports

Governed by Courier Imports and Exports (Clearance) Regulations, 1998 Except for certain excluded categories [like animals, plants, perishables, etc.], all goods are allowed to be imported through the courier mode.

Export :
All goods are allowed to be exported though courier except for certain excluded categories.
The goods not allowed to be exported through courier mode are those which attract any duty on exports or those exported under export promotion schemes, such as Drawback, DEPB, DEEC, EPCG etc. Other exclusions include goods where the value of the consignment is above Rs. 25,000/- and transaction in foreign exchange is involved. The limit of Rs. 25,000/- does not apply where the G.R. waiver or specific permission has been obtained from the Reserve Bank of India.

Classification of Goods
Documents
Samples & free gifts
Dutiable or commercial goods

Documents include: any message, information or data recorded on paper, cards or photographs having no commercial value,
Documents
which do not attract any duty or subject to any prohibition/ restriction on their import or export.

Samples have been defined to mean any bonafide commercial samples and prototypes of goods supplied free of charge of a value not exceeding
Samples
Rs.50,000/- for exports and Rs.10,000/- for imports which are not subject to any prohibition or restriction on their import or export and which do not involve transfer of foreign exchange.

Free gifts means any bonafide gifts of articles for personal use of a value not exceeding
Free Gifts
Rs. 25,000/- in case of exports and Rs.10,000/- in case of imports which are not subject to any prohibition or restriction on their import or export and which do not involve transfer of foreign exchange.
Dutiable or commercial goods
Dutiable goods include all goods having commercial value and are imported or exported through courier
Re-import/Re-export
Re-import
When goods are re-imported?
Rejects Replacement of defective goods Cancellation of order After exhibition/display etc. Returned after use in particular project/contract and completion of the contract etc. When Goods are sent for repairs, re-conditioning etc. Goods which may have to be sent for special processes like electroplating, polishing or coating and re-imported.
Re-import
Import duties
Import duties of Customs are leviable
No distinction is made whether The goods being imported had discharged duties earlier or They are being re-imported after exportation for particular purposes.
Re-import
Procedure for Re-importation is governed by respective notifications issued by the Government.
These notifications normally include provisions related to Duty component on re-importation Time period of re-importation Exemption allowed, if any Procedural aspects
Re-export
When goods are re-exported?
Import goods found defective or not fit for use. After completion of contract or projects. Exhibition etc.
Important Aspects
Section 74 of the Customs Act, 1962 provides for grant of 98% of the Customs duties leviable at the time of importation, by way of Drawback if it is re-exported by the importer, subject to laid down conditions in Cus. Ntfn No. 36/1995 Dtd. 26.05.1995.
Re-export
Goods have to be identified with the earlier import documents and duty payments to the satisfaction of the Assistant Commissioner at the time of export. If such goods have been used in India after importation, refund is granted on a proportionate basis under Cus. Ntfn No.19/65Cus (NT) dated 6.2.1965 as amended by Cus. Ntfn No. 23/2008 Dtd. 01.03.2008. The table that prescribes rate of drawback is under:
S. Length of period between the date of No. clearance for home consumption and the date when the goods are placed under Customs control for export (1) (2)
Percentage of import duty to be paid as Drawback (3)
1.
2. 3.
Not more than three months

More than three months but not more than six months
95%
85%
More than six months but not more than 75% nine months
4.
5. 6. 7.
More than nine months but not more than twelve months
More than twelve months but not more than fifteen months More than fifteen months but not more than eighteen months More than eighteen months
70%
65% 60% Nil
Important Notifications
Customs Subject Notification No. and Date
43/96-Cus. Exemption to specified goods exported from India Dtd. 23.07.1996 and re-imported after being subjected to specified processes.
259/Cus. Dtd. 11.10.1958. 271/Cus. Dtd. 25.10.1958. Exemption to re-import of challenge cups, or trophies, won by Defense Units. Exemption to re-import by Armed Forces returning from service abroad.
117/Cus. Dtd. 13.10.1961.
Exemption to re-import of engines and parts of aircraft.
Important Notifications
26/Cus. Dtd. 19.02.1962 174/cus. Dtd. 24.09.1966 Exemption to re-import of catering equipments, etc. by Indian Airlines. cabin Exemption to re-import of private personal property.
158/95-Cus. Dtd. 14.11.1995
Exemption to re-import of Indian goods and parts thereof (whether of Indian or foreign manufacture) for repairs, reconditioning, remaking or similar other process.
Exemption to re-import of goods sent for execution of approved projects. Exemption to re-import of goods exported under duty drawback rebate of duty or under bond.
241/cus. Dtd. 04.11.1982 94/96-cus. Dtd. 16.12.1996
36/1995-Cus. (NT), Dtd. 26.05.1995
RE-EXPORT OF IMPORTED GOODS (DRAWBACK OF CUSTOMS DUTIES) RULES, 1995
Warehousing
Warehousing
The facility of warehousing of imported goods in Customs Bonded Warehouses, without payment of Customs duty otherwise leviable on import, is permitted under the Customs Act, 1962. Basically, goods after landing are permitted to be removed to a warehouse without payment of duty and duty is collected at the time of clearance of goods from the warehouse.
Warehousing
Important Provisions
Warehousing Station Warehouses are to be appointed at particular places only. Customs under Section 58 can licence Private Bonded Warehouses
Bonding of imported goods Filing of Into-Bond Bill of Entry Execution of Bond
Storage Period Generally One year. In case of EOUs it is 5 years for Capital Goods and 3 Years for others.
Warehousing
Rate of Interest Payment of Interest @15% p.a. after expiry in case of EOUs. In other cases it is @15% p.a. after expiry of ninety days.
Manufacture-in-Bond Operations Manufacturing in bond is permissible under Section 65 of Customs Act. 1962. Manufacture-in-bond operations are to be carried out under Customs supervision on cost-recovery basis.
Warehousing
Rate of Duty/ Value for Assessment The rate of duty applicable is as per provisions of Section 15 of the Customs Act i.e. on the date on which the goods are actually removed from the warehouse.
However, when the warehousing period or the extended warehousing period has expired, the duty payable is with respect to the date when the warehousing/extended warehousing period expired and not the actual date of removal.
Warehousing
Export of bonded goods: Warehoused goods can be exported without payment of duty except Nepal and Bhutan.
Demands
Demands
Section 28 of the Customs Act, 1962 provides for recovery of any duty
which has not been levied or has been short levied or erroneously refunded or if any interest payable has not been paid, part paid or erroneously refunded
provided a notice demanding such duties/interests is issued within the time limit specified in that Section.
Demands
Causes and Time Limits for issuance of Demand Notice
Causes of issuance of Demand Notice If the short levy is by reason of collusion or any willful misstatements or suppression of facts Short levy is pointed out by Audit Actions taken Demand notice is to be issued within 5 years from the relevant date specified in Section 28. Show Cause Notice is issued and 15 days are given to show cause why payment is not made
Audit objection, arising out of assessment
To be finalized 6 months from the date of issue of the demands
Demands
Upon receipt of the reply from the Noticee the matter is examined in detail and the Noticee is offered an opportunity of Personal Hearing to explain his case before the adjudicating authority. On the basis of the facts and personal hearing, the adjudicating authority come to the conclusion after taking into consideration the provisions of Law.
Refunds
Refunds
The case of refund arises where duty has been paid in excess of what was actually leviable on the goods. Excess payment may be
due to lack of information on the part of importer/exporter or non-submission of documents required for claim of lower value or rate of duty. due to shortage/short landing, pilferage of goods or even incorrect assessment of duty by Customs.
Refunds
In such cases, refund of excess amount of duty paid can be claimed by the importer or exporter. If any excess interest has been paid by the importer/exporter on the amount of duty paid in excess, its refund can also be claimed.
Any person claiming refund of any duty or interest, has to make an application in duplicate in the form as prescribed in the Customs Refund Application (Form) Regulations, 1995, to the jurisdictional Deputy/Assistant Commissioner of Customs. Such application is to be made before the expiry of six months from the date of payment of duty and interest.
Refunds
However, in case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, application for refund can be made before the expiry of one year from the date of payment of duty and interest.
Customs Valuation & Assessment
Valuation and Assessment

Valuation refers to the true value of consignment Assessment refers to the basis for charging import duties.
Why it is necessary to establish standard practices for valuation and assessment of goods
In international Trade Values are different and based on internal-external factors. To ensure that there is uniformity in approach at different Customs formations. To avoid any ambiguity. To assure that goods are not undervalued and appropriate duty is paid on importation.
Customs Valuation
Statutory Provisions that determine Valuation

Customs Act, 1962 [CA, 1962] Section 2 (41)-Defines the term Value Section 14-Valuation of goods for purpose of assessment Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. Notified vide Cus. Ntfn No. 94 (NT) Dtd. 13.09.2007. Customs Valuation (Determination of Value of Export Goods) Rules, 2007, Notified vide Cus. Ntfn No. 95 (NT) Dtd. 13.09.2007
Statutory Provisions that determine Valuation

The term value is defined in Section 2 (41) of the Customs Act, 1962, the same reads as under: Value in relation to any goods to mean the value thereof determined in accordance with the provisions of sub-section (1) or sub-section (3) of Section 14 thereof.
[as amended in the Finance Act, 2007]
Customs Valuation
Whereas Section 14 of the Customs Act, 1962 lays down the basis for valuation of import & export goods in the country. The rates of customs duties leviable on imported goods (& export items in certain cases) are either
specific (fixed) or ad valorem basis or at times specific cum ad valorem.
When customs duties are levied at ad valorem rates, i.e., depending upon its value, it becomes essential to lay down in the law itself the broad guidelines for such valuation to avoid arbitrariness.
Valuation where Tariff Value is fixed u/s. 14 (2) of the Customs Act, 1962.
Section 14 (2) of CA, 1962 speaks of fixation of tariff values for imported or export goods: CBEC may fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value.
Customs Valuation-Transaction Value

Section 14 (1) and (3) forms basis of application of transaction value for the purposes of assessment of duty. These sections specifically state that value of the Imported goods and Export goods is the transaction value of such goods, as determined in accordance with the rules, i.e. Valuation Rules for Imported goods and Export goods.
Customs Valuation
The provisions of sub-section (1) of Section 14 follow the provisions contained in Article VII of GATT. The Customs Valuation Rules closely follow the WTO Customs Valuation Agreement to implement Article VII of GATT. The importer is required to
truthfully declare the value in the B/E provide a copy of the invoice file a valuation declaration in the prescribed form to facilitate correct and expeditious determination of value for assessment purposes.
CUSTOMS VALUATION (DETERMINATION OF PRICE OF IMPORTED GOODS) RULES, 2007

Rule 1 - Short title, commencement and application.
Rule 2 - Definitions.
Rule 3 - Determination of the method of valuation. Rule 4 - Transaction value of identical goods. Rule 5 - Transaction value of similar goods. Rule 6 - Determination of value where value can not be determined under rules 3, 4 and 5. Rule 7 - Deductive value. Rule 8 - Computed value.

Rule 9 - Residual method.
Rule 10 - Cost and services.

Rule 11 - Declaration by the importer. Rule 12 - Rejection of declared value. Rule 13 - Interpretative notes.

Important Provisions of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007: Rule 2 prescribes definition of terms such as identical goods, similar goods, related parties etc., etc. Following definitions are important (a) computed value" means the value of imported goods determined in accordance with rule 8. (b) "deductive value" means the value determined in accordance with rule 7.

(d) "identical goods" means imported goods which are same in all respects, including physical characteristics, quality and reputation as the goods being valued except for minor differences in appearance that do not affect the value of the goods; (e) produced" includes grown, manufactured and mined (f) "similar goods" means imported goods which although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality, reputation and the existence of trade mark; [all other conditions are similar to identical goods]

(g) (1) "transaction value" means the value referred to in subsection (1) of section 14 of the Customs Act, 1962; (2) For the purpose of these rules, persons shall be deemed to be "related" only if (i) they are officers or directors of one another's businesses; (ii) they are legally recognised partners in business; (iii) they are employer and employee;

(iv) any person directly or indirectly owns, controls or holds five per cent or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family.
Contd.

Explanation I. - The term "person" also includes legal persons. Explanation II. - Persons who are associated in the business of one another in that one is the sole agent or sole distributor, howsoever described, of the other shall be deemed to be related person.

Rule 3. Determination of the method of valuation.The value of imported goods shall be the transaction value. [as declared on the Invoice] Which will be accepted in normal circumstances, except for related party transactions.
Contd.
In other words, if the invoice value is accepted by Customs without any reservation then there is no question of Valuation at all.
When invoice value is not acceptable by Customs then the question of valuation comes into picture. Under these circumstances, Customs have to follow the valuation rules for determining the value.

Sub-rule (4): If transaction value is not accepted by Customs for any reason then the value shall be determined by proceeding sequentially through rule 4 to 9. Rule 4. Transaction value of identical goods.
The value of imported goods shall be the transaction value of identical goods sold for export to India and imported at or about the same time as the goods being valued; Provided that it shall not be the value of the goods provisionally assessed.
Contd.

For application of this rule, the transaction value of identical goods should be same commercial level and in substantially the same quantity
In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods.
Contd.

Rule 5: Transaction value of similar goods. The value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time.
.
.
Provided that such transaction value shall not be the value of the goods provisionally assessed. All other conditions as applicable to identical goods apply mutatis mutandis to similar goods

Rule 6: Determination of value where value can not be determined under rules 3, 4 and 5. If the value of imported goods cannot be determined under the provisions of rules 3, 4 and 5, the value shall be determined under the provisions of rule 7 or, when the value cannot be determined under that rule, under rule 8. At the request of the importer, and with the approval of the proper officer, the order of application of rules 7 and 8 can be reversed.

Rule 7. Deductive value.
The value of imported goods shall be based on the unit price at which
the imported goods or identical or similar imported goods are sold in the greatest aggregate quantity to persons who are not related to the sellers in India, subject to the following deductions :
(i) Commissions paid or payable or the additions usually made for profits and general expenses in connection with sales in India of imported goods.
(ii) the usual costs of transport and insurance and associated costs incurred within India; (iii) the customs duties and other taxes payable in India by reason of importation or sale of the goods. Contd.

(iv) If neither the imported goods nor identical nor similar imported goods are sold in India in the condition as imported, then, the value shall be based on the unit price at which the imported goods, after further processing, are sold in the greatest aggregate quantity to persons who are not related to the seller in India. (v) In such determination, due allowance shall be made for the value added by processing.

Rule 8: Computed value: The value of imported goods shall be based on a computed value, which shall consist of the sum of:(a) the cost or value of materials and fabrication or other processing employed in producing the imported goods; (b) an amount for profit and general expenses equal to that usually reflected in sales of goods (c) the cost or value of all other expenses under sub-rule (2) of rule 10.
. .

Rule 9: Residual method:
Where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and on the basis of data available in India;
Provided that the value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade, when the seller or buyer has no interest in the business of other and price is the sole consideration for the sale or offer for sale.
Contd.
.

No value shall be determined under the provisions of' this rule on the basis of (i) the selling price in India of the goods produced in India; (ii) a system which provides for the acceptance for customs purposes of the highest of the two alternative values; (iii) the price of the goods on the domestic market of the country of exportation; (iv) the price of the goods for the export to a country other than India; (v) minimum customs values; or (vi) arbitrary or fictitious values.
Contd.

Rule 10: Cost and services [Includibles]: In determining the transaction value, the following shall be added to the price actually paid or payable for the imported goods,
.
(a) the following to the extent they are incurred by the buyer but are not included in the price actually paid or payable for the imported goods, namely:.
(i) commissions and brokerage, except buying commissions;

.
(ii) the cost of containers which are treated as being one for customs purposes with the goods in question;
.
(iii) the cost of packing whether for labour or materials;
Contd.

(b) The value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale for export of imported goods, to the extent that such value has not been included in the price actually paid or payable, namely:.
(i) materials, components, parts and similar items incorporated in the imported goods;
.
(ii) tools, dies, moulds and similar items used in the production of the imported goods;
.
Contd.

(iii) materials consumed in the production of the imported goods; (iv) engineering, development, art work, design work, and plans and sketches undertaken elsewhere than in India and necessary for the production of the imported goods;
(c) royalties and licence fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable;
(d) The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues, directly or indirectly, to the seller; Contd.
.

(e) all other payments actually made or to be made as a condition of sale of the imported goods, by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller to the extent that such payments are not included in the price actually paid or payable. Explanation.- Where the royalty, licence fee or any other payment for a process, whether patented or otherwise, is includible referred to in clauses (c) and (e), such charges shall be added to the price actually paid or payable for the imported goods, notwithstanding the fact that such goods may be subjected to the said process after importation of such goods.
Contd.

Sub-rule (2): The value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include (a) the cost of transport of the imported goods to the place of importation; (b) loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation; and (c) the cost of insurance:
Contd.

Provided that (i) where the cost of transport referred to in clause (a) is not ascertainable, such cost shall be twenty per cent of the free on board value of the goods; (ii) the charges referred to in clause (b) shall be one per cent of the free on board value of the goods plus the cost of transport referred to in clause (a) plus the cost of insurance referred to in clause; (iii) where the cost referred to in clause (c) is not ascertainable, such cost shall be 1.125% of free on board value of the goods; In the case of goods imported by air, the freight value shall not exceed twenty per cent of FOB value of the goods and insurance value would be 1.125%. Contd.

Provided also that in case of goods imported by sea stuffed in a container for clearance at an Inland Container Depot or Container Freight Station, the cost of freight incurred in the movement of container from the port of entry to the Inland Container Depot or Container Freight Station shall not be included in the cost of transport referred to in clause (a). Explanation.- The cost of transport of the imported goods referred to in clause (a) includes the ship demurrage charges on charted vessels, lighterage or barge charges.
Contd.

Sub-rule (3): Additions to the price actually paid or payable shall be made under this rule on the basis of objective and quantifiable data. Sub-rule (4): No addition shall be made to the price actually paid or payable in determining the value of the imported goods except as provided for in this rule.
Contd.

Excludibles: The value of imported goods shall not include the following charges or costs, provided that they are distinguished from the price actually paid or payable for the imported goods: (a) Charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on imported goods such as industrial plant, machinery or equipment; (b) The cost of transport after importation; (c) Duties and taxes in India. The price actually paid or payable refers to the price for the imported goods. Thus the flow of dividends or other payments from the buyer to the seller that do not relate to the imported goods are not part of the customs value. Contd

Rule 11: Declaration by the importer.
Sub-rule (1): The importer or his agent shall furnish

(a) a declaration disclosing full and accurate details relating to the value of imported goods; and (b) any other statement, information or document including an invoice of the manufacturer or producer of the imported goods where the goods are imported from or through a person other than the manufacturer or producer, as considered necessary by the Customs officer.
Contd.

(2) Nothing contained in these rules shall be construed as restricting or calling into question the right of the Customs officer to satisfy himself as to the truth or accuracy of any statement, information, document or declaration presented for valuation purposes. (3) The provisions of the Customs Act, 1962 (52 of 1962) relating to confiscation, penalty and prosecution shall apply to cases where wrong declaration, information, statement or documents are furnished under these rules.
Contd.

Rule 12: Rejection of declared value. When the Customs officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of rule 3.
Contd.

At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:
Contd.

(i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value. Where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9.
.
(ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers.
(iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include
Contd.
.

(a) the significantly higher value at which identical or similar goods imported. (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production;
Contd.

(e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents.
Rule 13: Interpretative notes.

The interpretative notes specified in the Schedule to these rules shall apply for the interpretation of these rules.
Date of Determination of Rate of Duty

The rate of duty and tariff valuation to any imported goods will be the rate and valuation in force: In the case of goods entered for home consumption the date of presentation of Bill of Entry under Sec. 46
In the case of goods cleared from warehouse [bond] In other cases
the date of presentation of Bill of Entry under Sec. 68 the date of payment of duty
This is because the Exchange Rates, Rates of Duty and Tariff value keep changing.

Two exceptions so far as rate of duty and tariff value are concerned 1. In case the bill of entry has been filed in advance of entry
inwards of the vessel or the arrival of the aircraft, the crucial date will be the date of entry inwards of the vessel or the date of arrival of the aircraft.
2. In the case of clearance of goods from a bonded warehouse,
the date of presentation of the ex-bond bill of entry for home consumption is the crucial date provided the goods are removed during the permitted warehousing period (including extension allowed, if any).

As regards exchange rate, the rate notified by the Board and as in force on the date of presentation of the bill of entry (for home consumption or for warehousing) will be applicable.
Special Valuation Branch

The related party transactions are examined by Special Valuation Branches [SVB] located at four major Custom Houses namely Mumbai, Calcutta, Chennai & Delhi. SVB as an institution is specialized in investigation of transactions involving special relationships and certain special features having bearing on value of import goods should be continued.
The guidelines for examination of the circumstances of the sale of the imported goods in case of related parties have been laid down in Customs Circular No.11/2001-Cus., dated 23.2.2001.
CUSTOMS VALUATION ( DETERMINATION OF VALUE OF EXPORT GOODS ) RULES, 2007

The Customs Valuation (Determination of Value of Export Goods) Rules 2007 have been framed in a format similar to the Valuation Rules for the imported goods. Conceptually also, acceptance of Transaction Value for export goods has been emphasized in the said rules, in as much as Rule 3 specifically provides for it.

Rule 1 - Short title, commencement and application.
Rule 2 - Definitions.
Rule 3 - Determination of the method of valuation. Rule 4 - Determination comparison. Rule 6 - Residual method. Rule 7 - Declaration by the exporter. Rule 8 - Rejection of declared value. of export value by
Rule 5 - Computed value method.

Important Provisions of Customs Valuation (Determination of Price of Exported Goods) Rules, 2007: Rule 3: Determination of the method of valuation. Sub-rule (1): Subject to rule 8, the value of export goods shall be the transaction value. Sub-rule (2): The transaction value shall be accepted even where the buyer and seller are related, provided that the relationship has not influenced the price. Sub-rule (3): If the value cannot be determined under the provisions of sub-rule (1) and sub-rule (2), the value shall be determined by proceeding sequentially through rules 4 to 6.
.
.
.
Contd.

Rule 4: Determination comparison. of export value by
The value of the export goods shall be based on the transaction value of goods of like kind and quality exported at or about the same time to other buyers in the same destination country of importation or in its absence another destination country.
Contd.

Rule 5: Computed value method. If the value cannot be determined under rule 4, it shall be based on a computed value, which shall include the following:(a) cost of production , manufacture or processing of export goods; (b) charges, if any, for the design or brand; (c) an amount towards profit.

Rule 6: Residual method.
(1) Subject to the provisions of rule 3, where the value of the export goods cannot be determined under the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods.
Rule 7: Declaration by the exporter.The exporter shall furnish a declaration relating to the value of export goods in a specified manner.
Contd.

Rule 8: Rejection of declared value.
The Customs officer has powers to reject the value on the basis of reasonable doubt about the truth or accuracy of the value declared.
Main reasons for rejecting the declared value: (a) the significant variation in value at which goods of like kind and quality exported at or about the same time (b) the significantly higher value compared to the market value of goods of like kind and quality at the time of export. (c) the mis-declaration of goods in parameters such as description, quality, quantity, year of manufacture or production.
Assessment
Assessment
Assessment is necessarily done for determining
the value of cargo for the purpose of calculating duty and checking classification of product from the point permissibility of import.
of
For the purpose of assessment normally following documents are submitted for clearance of goods through customs:-
Assessment
Sr. No. i. ii. iii. For Import Bill of Entry Invoice and Packing List Import Licence, where necessary For Export Shipping Bill Invoice and Packing List Export Lic./ Quota Certificate, where necessary; PAN based Business Identification Number (BIN) Export Inspection Agencys Certificate G.R.I. Form/SDF/ PP declaration A.R.E.-1/2 Form of Central Excise
iv. v. vi.
Country of Origin Certificate Insurance Memo/Policy Bill of Lading or Delivery Order
Assessment
Tips for quicker assessment :Where some goods are imported for the first time or their tariff classification is not well established, or their prices have gone down considerably, importers are advised to keep catalogue/literature regarding composition and functions of the goods and their prices ready with them before hand. Customs Officer may ask for it.
Examination of Goods
Government of India has signed revised KYOTO conventions on 4th of Nov. 2005. Under this the examination would be based on risk involved and cargoes are divided into 3 categories :1) Low risk, 2) Medium risk and 3) High risk
Similarly Govt. has introduced the Risk Management System (RMS) of which Accredited Clients Programme (ACP) is a major component.
Examination of Goods
The objective of the programme is to grant assured facilitation to importers. With the implementation of the Risk Management System, this programme will replace all existing schemes for facilitation in the sites where RMS is implemented. The goal of the Risk Management System (RMS) is to enable the department to strike an appropriate balance between trade facilitation and enforcement.

ACP is a major element of the risk management strategy [RMS]. Clients who are assessed as highly compliant would be given assured facilitation by the RMS. Under the RMS, Bills of Entry (B/E) filed by importers in the Indian Customs EDI System will be processed for risk and a larger number of consignments will be allowed clearance based on the importers self assessment without examination, after checking the marks and numbers on the packages or in the case of Full Container Load (FCL Cargo), the container numbers and seals, and after taking over the relevant documents from the importers. Other consignments would be selected for Appraisement or Examination or both depending on the evaluation of risk by the RMS.

Importers registered by the department as Accredited Clients under the Accredited Clients Programme will form a separate category to which assured facilitation would be provided. The importers desirous of availing the facility as Accredited Clients are required to apply for registration using the Application form Annex 1 given in Cus. Cir. No. 42/2005.
Exemption under Notifications

For variety of reasons Government decides to grant exemptions from payment of duties subject to certain conditions. These exemption could be product specific (end use), general purpose (R & D) or for export promotion (Advance Authorisation, DFIA, etc.). All these exemptions are granted in public interest keeping in mind the development of trade, modernization, upgradation of technology, promoting exports, facilitation, etc, etc. The general exemptions are many in number.
Exemption Notifications
The basic benefit against exemption notification is exemption against payment of customs duty. The exemption could be only of Basic Customs Duty or a percentage of Basic Customs Duty or Basic Customs Duty + Countervailing Duty etc.
Import Against Different Schemes

Served from India Scheme: Duty credit scrip to eligible service export. CUS NTF NO. 92/2004 DATE 10/09/2004 Focus Market Scheme: Duty credit scrip to notified markets. CUS NTF NO. 90/2006 DATE 01/09/2006 Focus Product Scheme: Duty credit scrip to notified products. CUS NTF NO. 91/2006 DATE 01/09/2006 Vishesh Krishi and Gram Udyog Yojana: Duty credit scrip for agricultural and gram udyog products as notified by DGFT. CUS NTF NO. 41/2005 DATE 09/05/2005

Advance Authorisation: Exempts duty on inputs for export production. CUS NTF NO. 91/2004 DATE 10/09/2004 CUS NTF NO. 93/2004 DATE 10/09/2004 CUS NTF NO. 94/2004 DATE 10/09/2004 Duty Free Import Authorisation: Transferable instrument, allows exemption from payment of duties CUS NTF NO. 40/2006 DATE 01/05/2006

Duty Entitlement Passbook Scheme: Neutralization of basic customs duty on the inputs, transferable instrument. CUS NTF NO. 89/2005 DATE 04/10/2005 Drawback of Customs/Excise Duties: Refund of duties paid on inputs. CUS NTF NO. 103/2008 (NT) DATE 29/08/2008 Export Promotion Capital Goods Scheme: Import of capital goods for pre production, production and post production at 3% Customs duty subject to fulfillment of export obligation. CUS NTF NO. 97/2004 DATE 17/09/2004 CUS NTF NO. 64/2008 DATE 09/05/2008

Setting up of units as EOUs/EHTPs/STPs/BTPs: Units undertaking to export their entire production of goods and services except permissible sales in Domestic Tariff Area (DTA) are known as Export Oriented Units (EOUs). Permits import of capital goods and inputs without payment of duty. CUS NTF NO. 52/2003 DATE 31/03/2003
Common Aspects between Customs and Excise
Common aspects between Customs & Excise

The first common aspect is administration of both the laws by one Ministry, i.e. Ministry of Finance. Whenever there is an amendment to Excise Law or Customs Law, it is ensured that similar provisions are incorporated or amended in the other Law . Customs Tariff and Excise Tariff are complied based on Harmonised System of Nomenclature [HSN]

Classification of goods with 8 digit code under Excise and Customs Tariff Act.
With regard to valuation aspect, the concept of transaction value is already in existence under Section 14 of the Customs Act, 1962 which is adopted under Section 4 of the Central Excise Act, 1944.
The concept of related person for the purpose of determination of value of imported goods or the value of excisable goods manufactured / removed is almost on similar basis under both the laws.

Export of excisable goods are examined by Customs before export.
Procedure for refund and payment of interest on delayed refunds. Provisions relating to search, seizure and confiscation of goods. Issue of Show Cause Notice, granting of Personal Hearing and passing of adjudication order.

The procedure for Appeal is similar both under Customs & Excise Law.
Procedure for Settlement Commission. The procedure for Advance Ruling.
Settlement Commission
An alternative channel for resolution of dispute for assessees finally- without going into the prolonged litigation in adjudication/appeals/revisions etc., has been created by constituting Customs & Central Excise Settlement Commission.
Presently, three Benches in the Settlement Commission have been constituted and they are functioning at Delhi, Mumbai and Chennai, etc.
Section 127B of the Customs Act, 1962 provides filing of application by the assessee for settlement of cases before the Settlement Commission.
Settlement Commission
Settlement Commission cannot entertain the cases which are pending with the Appellate Tribunal or in a Court. Similarly, the matters relating to classification cannot be raised before the Commission. It is also specified that no application can be made unless the appellant has filed a bill of entry, or a shipping bill etc., or a show cause notice issued by proper Officer
The settlement provision will apply in cases where the additional duty liability accepted by the applicant exceeds three lakh rupees and accepted amount has been paid with interest before application to the commission.
Advance Ruling
To facilitate the non-resident and specified resident investor in ascertaining his tax liabilities in terms of Customs, Central Excise duties and Service Tax. As the name suggests, it is sought and given before the commencement of a particular activity and it is a Ruling i.e. it is in the nature of an order binding the parties involved. A scheme of Advance Ruling has been incorporated in the Customs Act, 1962, the Central Excise Act, 1944 and in the Finance Act, 1994.
Advance Ruling
Activity / services on which Advance Rulings can be sought:
Activity means import or export of goods under Customs Act, 1962, and production or manufacture of goods under the Central Excise Act, 1944. Service refers to a taxable service, specified in Chapter V of the Finance Act, 1994 under the Service Tax provisions.
Benefit of Advance Ruling:

Helps planning customs/excise activities or providing of a service well in advance. Certainty in determining the indirect tax liability. Avoids long drawn and expensive litigation at a later date.
Advance Ruling
Who can seek an Advance Ruling?
Any person who is a non-resident setting up a joint venture in India in collaboration with a non-resident or a resident;
Any person who is a resident setting up a joint venture in India in collaboration with a non-resident; A wholly owned subsidiary Indian Company of which the holding company is a foreign company; A joint venture in India; A resident falling within any such class or category of persons as the Central Government may, by notification in the official gazette specify in this behalf.
While dealing with Customs remember:

To keep all applicable documents ready (the list is long, however, can not be avoided). There are 13 INCOTERMS, however, by practice we understand only three FOB, CFR and CIF. The software designed by Customs for operational use does not include terms like DDU or FAS. Hence you can not get quick result if you use these terms.

Explaining these terms to Government Officer would be a difficult task and even if he understands it would not result in quick action as the software provided by Government can not be altered. Things wont move as expected, particularly, with reference to time. Some times you may require more than that. We have good number of HOLIDAYS as well.

All related party transactions are scrutinised seriously due to the belief that the relationship must have influenced the price. Hence understand SVBs working thoroughly. Always explain, dont argue - [if you know well]
Seek Guidance, dont explain - [if you dont know]
Conclusion
Ignorance of Law is not an excuse. You should therefore know the Law while transacting any business with Customs. Wrong procedures/shortcuts or ignorance ultimately lead to financial losses.

Import MGMT l7

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Import Management

How to start Imports

Registration with State Government authority-Registrar of Firms

How to start Imports

(d) Notification No. 45/2001-C.E.(N.T), dated 26-6-2001 for

Commercial / Regulatory Documents

Commercial / Regulatory Documents

Application of Origin 5. Mate Receipt 6. Shipping order 7. Shipping Instructions

Documentation For Execution

Stuffing of Cargo Insurance Policy

Preparation of Documents for Bank

Documentation For Export Benefits

Documentation For Execution

Submission of documents to bank Negotiation Realisation Obtaining Bank Certificate

Maintenance of statutory records

Documentation For Export Benefits

Import Management agenda

Sourcing the Imports

Accredited Clients Programme [ACP]

Importance and Need for Imports

Importance and Need for Imports

To meet demand of inputs for exports.

To import defense requirements including arms and ammunitions.

To maintain Balance of Imports and Exports

Import Tariff Structure

Import Tariff Structure

Import Tariff Structure

Import Tariff Structure

Import Tariff Structure

MRP Based Countervailing Duty

CVD (Countervailing duty) of Sales Tax

Import Tariff Structure

Calculation of Customs Duty

Assessable value (A) Basic Customs Duty @ 7.5% (B) (A + B) = (C)

100.00 7.50 107.50

CVD @ 8% (CVD) (a)

Total Customs Duty (C+E+E1+E2) = F

Sourcing the Imports

Sourcing the Imports

It involves the following:

Sourcing the Imports

SELECTING THE OVERSEAS SUPPLIER

Sourcing the Imports

Sourcing the Imports

Sourcing the Imports

Sourcing the Imports

Sourcing the Imports

Sourcing the Imports

Selection of mode will depend on the following factors

Sourcing the Imports

Secretary Expenditure Central Board of Excise & Customs

Central Excise Appraising

STRUCTURE OF CUSTOMS DEPARTMENT

Customs Rules and Regulations

Customs Rules and Regulations

Customs Rules and Regulations

Whether technology is fully automated or semi-automatic,

Courier Imports & Exports

Courier Imports and Exports

Courier Imports and Exports

Courier Imports and Exports

Samples & free gifts