Updated on July 18, 2023
The Government of India levies a Customs Duty on all the imports and a few selective exports. Several factors like value, weight, dimensional area, etc. determine the amount that shall be paid as customs duty.
Earlier it was called customs duty and now it is replaced by the Goods and Service Tax(GST) starting from 1st July 2017.
This time-consuming process is complex and becomes irritating most of the time. This can be due to the high import tariffs charged, the multiplicity of exemptions, and various export and import promotions. Duties which are levied on the goods that are being imported are termed as import duties while those which are levied on the exported goods are defined as export duties.
After COVID 19, India is following and imposing various laws for a hassle-free experience for exporters/importers.
We can understand how confusing or sometimes astonishing these rules and processes can be for customs clearance. Thus we will be discussing all the factors that will result in a hassle-free experience and will minimize the risks of getting delayed shipments.
Hope this article makes your customs clearance as simple as possible! We will be covering all the mentioned points that can bring your mind at ease and will waive all your worries.
Factors that impact Customs Clearance in India
Rules and regulations that you can’t miss
Recent laws for the Customs clearance that you must follow
The process of getting your goods across the borders can be aggravating and troublesome. Earlier customs clearance process in India was more hectic because of the various trade barriers rules etc, but thanks to our booming technology that is constantly making customs
clearance smooth. With the aim to focus on automation in the shipping industry, it makes the entire process contact-less.
The first and the foremost thing to keep in mind is to equip yourself with all the relevant and requisite information about the nature of the cargo that you’re shipping and the laws which are active in that country or state.
Nature of Cargo: Identify your cargo whether you are taking any explosive item or radioactive item or any such item which can cause a hazard. Or are you someone taking any food items/products?
Check all the restrictions related to cargo in that country like in India the restriction on the particular Cargo are as follows:
Narcotics / Drugs
Live Animals or any endangered species
Arms, explosives, Ammunition or scrap from warzone area
Waste of batteries, plastics or any municipal waste
Used Vehicles with left-hand drive
Ivory, Rags or Currency Coins/Notes
Beef and Beef contained products
Beverages that contain alcohol are completely banned to import into Gujarat State, etc.
You can check restrictions imposed in various states to get a clear idea of the nature of your cargo and if they fulfill the specific conditions related to the product. You have to take certain measures or follow a certain process of regulation to ship these goods.
Free trade agreements: There are certain agreements that occur between countries to minimize the tariffs and trading within a free trade zone is profitable.
But to take complete benefit from these tariff reductions, you must check carefully if your item qualifies for the same or not. So if your goods meet the rules of origin requirements which determine the national source of a product and if it’s eligible for exemptions or not.
If you’re having a product which is eligible then you have to show a certificate of origin as proof.
This way trade can become a favorable deal or a beneficial circumstance.
Automated and Digital Customs: Most of the countries are moving toward digital customs systems and hence it becomes vital for you to know about the EDI (electronic data interchange).
The amendments are desired to simplify the entire procedure so as to focus on automation and make the entire process contact-less.
The entire process is automated and the rules as of March 2021 specify the submission of all the necessary details electronically.
Standardization of the various forms and notifications for the objective of electronic submission of details is already available.
Certain intimations like concessional rate of duties, intimation regarding the receipt of goods, approval to re-export or clear goods domestically etc, are all being done away with.
A monthly statement shall be advanced by the importer on the common portal.
The filing of the shipping bill and bill of entry is an important function and shall be done only on the Indian Customs’ EDI platform.
For the smooth and hassle-free experience of Customs Clearance in India, you must take the governing laws seriously.
Right from the goods you’re shipping to the documentation you’re attaching, everything must be according to the rules and regulations present in that country or state.
Foreign Trade policy: Each country has its own set of rules and trade laws. Talking about India, the major governing law for imports and exports is the Foreign Trade policy, which is updated after every 5 years of the term. Also, it is a must to keep a check and have a basic understanding of the Foreign Trade (Development and Regulation) Act, Customs Act and Foreign Exchange Management Act, and Foreign Trade (Regulation) Rules.
The government has also further expanded the existing Foreign Trade Policy (FTP) 2015-20 which was also valid up to 31st March 2022 and now it has been till 30th September 2022. The Foreign Trade Policy provides an opportunity to enhance exports, so as to drive economic growth and build jobs.
Government Restrictions: Exchange controls are the various government restrictions on transactions in foreign exchange. All the exchange rates are different and based on the categories of imports and exports. In the domestic accounts that are established, importers have to pay for the goods that are bought from a foreign buyer in the local currency and exporters get paid in their own currency.
Regulations controlling the export: If you’re dealing with dangerous goods, you need to understand some export controls. International export control groups strictly keep a check on the trading of arms, chemicals, nuclear materials and various other high-risk goods.
If you are willing to ship goods with chemicals that are included in the Group’s Control Lists, then your export license may be denied if you don’t strictly follow its export rules.
Keep all your documents ready: Customs Clearance is a process which requires a lot of documentation. Well, a huge range of paperwork needs to be done through the importer or exporter. This paperwork includes various licenses, forms and certificates which must be accurate and should be submitted on time. Delay in the paperwork may lead to delays in the export/import of goods.
Here’s a list of documents which are mandatory to assure a hassle-free customs clearance experience:
Shipping Bill (commonly known as a bill of export)
Commercial Invoice cum Packing List(when you’re e-file a shipping bill, it must be escorted by a copy of the commercial invoice cum packing list)
Bill of lading
Bill of entry
Licenses of import/export
Certificate of Origin
Certificate of Health
Certificate of insurance
Central excise duty(if any)
Industrial licenses (if any)
DEEC(Duty Exemption Entitlement Certificate) or any other duty benefit
With custom regulations and practices varying from country to country, there is no set of fixed guidelines to clear the customs.
Also, different cargo types deal with different customs authorities. But you need to know all the latest laws that are formed or the latest guidelines to be followed to import/export the goods.
With reference to the notification of the latest implementations:
To simplify the process the entire process is made contact-less and there is more focus on the automation in the process of customs clearance.
The rules notify all the exporters/importers to submit all the necessary details online using a common portal.
A monthly statement should be submitted via importer in this common portal.
There will be an electronic option for voluntary payment via the common portal.
For the importer who wants to import goods at a concessional rate according to the set of concessional schemes, a unique IGCR Identification Number (IIN) will be generated.
For the comfort of the importers, the district-wise list of jurisdictional customs officers is available along with their contact details and their jurisdictions is available on the CBIC website.
Keep a check on all the latest notifications to avoid any such confusion.
If you have all the documentation and the above-mentioned set of factors ready with you, then you’ll definitely encounter a hassle-free experience. Freightmango- a digital freight marketplace understands how confusing customs rules and processes can be for you and therefore our vision is to make customs clearance as superficial as possible!
Right from managing customs documentation and receiving goods or carting to examining any kind of shipments and then finally stuffing or de-stuffing at ports, we have got you covered in every possible way to make your experience better and hassle-free.