Custom clearance

for import caargo

Following are the original documents to be submitted in the customs of sea port in india to make customs clearance for import cargo received by sea:1. Supplier's/Exporter's Invoice 2. Supplier's/Exporter's Packing List 3. Supplier's/Exporter's Certificate of Origin 4. Supplier's/Exporter's Declaration(to be signed by both exporter and importer) 5. Minimum two bill of lading with importer's endorsement.(If documents received through bank, then endorsement should be received from the banker). 6. Pre Shipment Inspection Certificate 7. Form 9 (to be signed by both exporter/importer) 8. Copy of Registration Certificate received from State Pollution Control Board. 9. Highseas Sale Invoice(If cargo sold on highseas sale basis) 10. Highseas Sale Agreement (If cargo sold on highseas sale basis)

Introduction
All goods imported into India have to pass through the procedure of customs for proper examination, appraisal, assessment and evaluation. This helps the custom authorities to charge the proper tax and also check the goods against the illegal import. Also it is important to note that no import is allowed in India if the importer doesnt have the IEC number issued by the DFGT. There is no requirement of IEC number if the goods are imported for the personal use.

Bill of Entry A Bill of Entry also known as Shipment Bill is a statement of the nature and value of goods to be imported or exported, prepared by the shipper and presented to a customhouse. The importer clearing the goods for domestic consumption has to file bill of entry in four copies; original and duplicate are meant for customs, third copy for the importer and the fourth copy is meant for the bank for making remittances. If the goods are cleared through the EDI system, no formal Bill of Entry is filed as it is generated in the computer system, but the importer is required to file a cargo declaration having prescribed particulars required for processing of the entry for customs clearance. In the non-EDI system along with the bill of entry filed by the importer or his representative the following documents are also generally required:

Signed invoice Packing list Bill of Lading or Delivery Order/Airway Bill GATT declaration form duly filled in Importers/ CHAs declaration License wherever necessary Letter of Credit/Bank Draft/wherever necessary Insurance document Import license

Industrial License, if required Test report in case of chemicals Adhoc exemption order DEEC Book/DEPB in original Catalogue, Technical write up, Literature in case of machineries, spares or chemicals as may be applicable Separately split up value of spares, components machineries Certificate of Origin, if preferential rate of duty is claimed No Commission declaration

Amendment of Bill of Entry Whenever mistakes are noticed after submission of documents, amendments to the bill of entry is carried out with the approval of Deputy/Assistant Commissioner. Green Channel facility Some major importers have been given the green channel clearance facility. It means clearance of goods is done without routine examination of the goods. They have to make a declaration in the declaration form at the time of filing of bill of entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods. Payment of Duty Import duty may be paid in the designated banks or through TR-6 challans. Different Custom Houses have authorised different banks for payment of duty and is necessary to check the name of the bank and the branch before depositing the duty. Prior Entry for Shipping Bill or Bill of Entry For faster clearance of the goods, provision has been made in section 46 of the Act, to allow filing of bill of entry prior to arrival of goods. This bill of entry is valid if vessel/aircraft carrying the goods arrive within 30 days from the date of presentation of bill of entry. Specialized Schemes Import of goods under specialized scheme such as DEEC and EOU etc is required to execute bonds with the custom authorities. In case failure of bond, importer is required to pay the duty livable on those goods. The amount of bond would be equal to the amount of duty livable on the imported goods. The bank guarantee is also required along with the bond. However, the amount of bank guarantee depends upon the status of the importer like Super Star Trading House/Trading House etc. Bill of Entry for Bond/Warehousing A separate form of bill of entry is used for clearance of goods for warehousing. Assessment of this bill of entry is done in the same manner as the normal bill of entry and then the duty payable is determined.

Clearing and forwarding agent

Clearing and forwarding agent means any person who is engaged in providing any service, either directly or indirectly, concerned with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. A clearing and forwarding agent normally undertakes the following activities: (a)receiving the goods from the factories or premises of the principal or his agents; (b)warehousing these goods; (c)receiving dispatch orders from the principal; (d)arranging dispatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal; (e)maintaining records of the receipt and dispatch of goods and the stock available at the warehouse

EPCG SCHEME

What are the conditions and obligations under EPCG Scheme? What are the conditions for import of capital goods under EPCG scheme? Can second hand goods be imported under this scheme? What are the duty concessions available and Export obligation to be fulfilled under the EPCG Scheme ? Who are eligible to avail of the EPCG Scheme? How to obtain an Import Licence under the EPCG Scheme? Is the Import of components and goods in SKD/CKD condition allowed under this Scheme?

Q.1

Who are eligible to avail of the EPCG Scheme?

A.

The manufacturers, Exporters and Merchant Exporters are eligible to avail of this Scheme.

Q.2

How to obtain an Import Licence under the EPCG Scheme?

A.

The eligible persons who desire to operate under the EPCG Scheme should make an application in the form given in Appendix 10 A of the Hand Book alongwith documents prescribed therein too the Director General of foreign Trade (DGFT) or to the regional Licensing authorities along with necessary information/documents to obtain an Import licence. Licences are issued, under this scheme by the director general of foreign trade or his regional officers depending upon the value of the licence subject to execution of legal undertaking and bank guarantee by them undertaking among other things to fulfill their export obligation within the specified period. The import licences issued under this scheme shall be deemed to be valid for the goods already shipped/ arrived provided, the customs duty has not been paid for the goods have not been cleared from the customs.

Q.3

What are the duty concessions available and Export obligation to be fulfilled under the EPCG scheme?

Customs Duty

Export Obligation FOB Basis NFE Basis

Period

10%

4 times cif value of CG

Not applicable

5 years

il duty (in case CIF value is 6 times cif value of CG Rs.20 crore or more) (a) Nil duty in case CIF Value is Rs.1 crore or 6 times cif value of CG more for electronics, food processing, textiles, plastics, leather, sports goods, gem & jewellery sectors and produce and products of agriculture, aquaculture, animal husbandry, floriculture, horticulture, piscculture, viticulture, poultry and sericulture, biotechnology sector, the following sub-sectors of Engineering sectors: Machine tools, parts and accessories; thereof automotive components and accessories, bicycle parts and accessories, handtools, cutting and small tools; castings and forgings (ferrous and nonferrous) all sorts; pumps, electric motors and parts thereof; fasteners all types (ferrous and non-ferrous) bright bars and shafting; scientific and surgical instruments and the following sub-sectors of chemicals; organic chemicals; Hotels, Travel agents tour operators or tourist transport operators who are recognized as Export House, Trading House, Star Trading House and Super Star Trading House or Service Export House,

5 times cif value of CG 8 years

6 times cif value of CG 6 years

Q.4

What are the conditions for import of capital goods under EPCG scheme? Can second hand goods be imported under this scheme?

A. Import of capital goods under this scheme shall be subject to actual used condition till the export obligation is completed. Both new an second hand capital good may be imported. Second hand capital goods at permitted subject to the condition that such goods have a minimum of residual life of 5 years and the importer furnishing to the customs at the time of clearance of goods a self declaration to the effect that the second hand capital goods being imported have a minimum residual life of five years in the prescribed form. In case the value of the second hand capital goods imported is rupees one crore or more the importers shall also furnish to the customs at the time of clearance of goods a certificate from the Inspection and certification agency to the effect that the purchase price is reasonable. In case of imports at zero duty the minimum residual life of the second hand goods shall be ten years. The concessional assessment is extended only to the goods covered by an licence issued under the EPCG Scheme.

Q.5

Is the Import of components and goods in SKD/CKD condition allowed under this Scheme?

A.

An eligible person may apply for a licence under the EPCG scheme t import the capital goods in SKD/CKD condition or components of the capital goods in SKD/CKD condition

or components of such capital goods and may assemble or manufacture, as the case may be the capital goods. This facility shall not be available for replacement of parts.

Q.6

What are the conditions and obligations under EPCG Scheme?

A.

The following are the conditions and obligations; (i) (ii) The export obligation shall be fulfilled by the export of goods manufactured or produced by the use of the capital goods imported under the scheme; The exports shall be direct exports in the name of the importer. However, the importer may export through a third party provided the name of the importer/licence holder is also indicated in the Shipping Bill. If a merchant exporter is the importer the name of the manufacturer shall be indicated in the Shipping Bill; Export proceeds shall be realized in freely convertible Currency; Exports shall be physical exports. Deemed exports shall also be taken into consideration for fulfillment of export obligation but the licencee shall not be entitled to claim any benefit of Deemed Exports; The export obligation shall be in addition to any other export obligation undertaken by the importer and shall be over and above the average level of exports of the same product achieved by him in the preceding three licensing years. If the exporter achieves an export of 75 per cent of the annual value of the production of the relevant export product, the export obligation under this scheme shall be subsumed under that export provided, however, that the aggravate value of such exports during the specified period shall not be less than the aggregate value of the export obligation fixed.

(iii) (iv)

(v)

(vi)

Where the manufacturer exporter has obtained licences for the manufacture of the same export product both under this scheme and the Duty Exemption Scheme,, the physical exports made under the Duty exemption Scheme shall also be counted towards the discharge of th4e export obligation under this scheme; and In the case of export of computer software, the export obligation shall be determined in accordance with policy but the conditions that exports hall be over and above the average level of exports in the preceding three licensing years shall not apply.

(vii)

Duty
Duty free import of

Exemption
inputs is permitted under the

Scheme
following schemes:

Advance License - granted to merchant exporter or manufacturer exporter for the import of inputs required for the manufacture of goods without payment of basic customs duty. However, such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import. Annual Advance License - Manufacturer exporter with export performance of Rs. 1 crore in the preceding year and registered with excise authorities, except for products which are not excisable for which no such registration is required, shall be entitled for Annual Advance License. Export House, This license and/or material imported thereunder shall not be transferable even after completion of export obligation. Such annual advance license shall be issued with positive value addition without stipulation of minimum value addition. The entitlement under this scheme shall be up to 125% of the average FOB value of export in the preceding licensing year. Imports against this is exempted from payment of Additional customs duty, Special Additional Duty, Anti Dumping Duty, Safeguard duty, if any, in addition to Basic customs duty and surcharge thereon. Advance Intermediate License: This license is granted to a manufacturer exporter for the import of inputs required in the manufacture of goods to be supplied to the ultimate exporter holding an Advance License/Special Imprest License. Special Imprest License: This license is granted for the duty free import of inputs required in the manufacture of goods to be supplied to the ultimate exporter holding an Advance License/Special Imprest License. Such Special Imprest License is

granted for the Duty Free import of inputs required in the manufacture of goods to be supplied to the EoUs/units in EPZs/STP/EHTP, holders of license under the EPCG scheme, projects financed by multilateral/bilateral agencies/funds as notified by the Dept. of Economic Affairs, MoF, Fertilizer Plants if the supply is made under the procedure of International Competitive Bidding, supply of goods to refineries and proejcts/purposes for which MpF permits import of such goods on zero customs duty.
Introduction The Export Oriented Units (EOUs) scheme, introduced in early 1981, is complementary to the SEZ scheme. It adopts the same production regime but offers a wide option in locations with reference to factors like source of raw materials, ports of export, hinterland facilities, availability of technological skills, existence of an industrial base and the need for a larger area of land for the project. As on 31st December 2005, 1924 units are in operation under the EOU scheme. Objectives of the Export oriented unit: The main objectives of the EOU scheme is to increase exports, earn foreign exchange to the country, transfer of latest technologies stimulate direct foreign investment and to generate additional employment. Major Sectors in EOUs: GRANITE TEXTILES / GARMENTS FOOD PROCESSING CHEMICALS COMPUTER SOFTWARE COFFEE PHARMACEUTICALS GEM & JEWELLERY ENGINEERING GOODS ELECTRICAL & ELECTRONICS AQUA & PEARL CULTURE

Export from EOU Exports from EOUs during 2004-2005 were of the order of Rs.36806.17 crores as compared to the export of Rs.28827.58 crores achieved during 2003-2004, registering a growth of 27.68%. EOU Activities Initially, EOUs were mainly concentrated in Textiles and Yarn, Food Processing, Electronics, Chemicals, Plastics, Granites and Minerals/Ores. But now a day, EOU has extended it area of work which includes functions like manufacturing, servicing, development of software, trading, repair, remaking, reconditioning, re-engineering including making of gold/silver/platinum jewellery and articles thereof, agriculture including agro-processing, aquaculture, animal husbandry, bio-technology, floriculture, horticulture, pisiculture, viticulture, poultry, sericulture and granites. Need for Special License

To set up an EOU for the following sectors, an EOU owner needs a special license. Arms and ammunition, Explosives and allied items of defense equipment, Defense aircraft and warships, Atomic substances, Narcotics and psychotropic substances and hazardous chemicals, Distillation and brewing of alcoholic drinks, Cigarettes/cigars and manufactured tobacco substitutes.

In the above mention cases, EOU owner are required to submit the application form to the Development Commissioner who will then put them up to the Board of Approvals (BOA). Choosing the Location for EOU

EOUs can be set up anywhere in the country and may be engaged in the manufacture and production of software, floriculture, horticulture, agriculture, aquaculture, animal husbandry, pisciculture, poultry and sericulture or other similar activities. However, it should be noted that in case of large cities where the population is more than one million, such as Bangalore and Cochin, the proposed location should be at least 25 km away from the Standard Urban Area limits of that city unless, it is to be located in an area designated as an "industrial area" before the 25th July, 1991. Non-polluting EOUs such as electronics, computer software and printing are exempt from such restriction while choosing the area. Apart from local zonal office and state government, setting up of an EOU is also strictly guided by the environmental rules and regulations. Therefore, an even if the EOU unit has fulfilled all locational policy but not suitable from environmental point of view then the Ministry of Environment, Government of India has right to cancel the proposal. In such situation industrialist would be required to abide by that decision.

EOU Unit Obligations The EOUs are required to achieve the minimum NFEP (Net Foreign Exchange Earning as a Percentage of Exports) and the minimum EP (Export Performance) as per the provisions of EXIM Policy which vary from sector to sector. As for instance, the units with investment in plant and machinery of Rs.5 crore and above are required to achieve positive NFEP and export US$ 3.5 million or 3 times the CIF value of imported capital goods, whichever is higher, for 5 years. For electronics hardware sector, minimum NFEP has to be positive and minimum EP for 5 years is US$ 1 million or 3 times the CIF value of imported capital goods, whichever is higher. NFEP is calculated cumulatively for a period of 5 years from the commencement of commercial production according to a prescribed formula. Bonding Period of EOU The EOUs are licensed to manufacture goods within the bonded time period for the purpose of export. As per the Exim Policy, the period of bonding is initially for five years, which is extendable to another five years by the Development Commissioner. However on a request of EOU Unit, time period can also be extended for another five year by the Commissioner / Chief Commissioner of Customs. EOU in Exim Policy

Currently EOU scheme is mentioned in the Chapter 9 of the Foreign Trade Policy (1997-2002) and Chapter 9 of the Handbook of Procedures, Volume-I (HOP). The EOUs can export all products except prohibited items of exports in ITC (HS). Recent Policy Changes in the EOUs Scheme (w.e.f. 7th April, 2006) The export of goods up to one and half percent of the FOB value. In order to facilitate the smooth functioning of the EOU units, the Development Commissioners will fix time limits for finalizing the disposal of matters relating to EOUs. New units engaged in export of Agriculture/Horticulture/Aqua-Culture products have been now allowed to remove capital goods inputs to the DTA on producing bank guarantee equivalent to the duty foregone on the capital goods/input proposed to be taken out. The EOU units in Textile Sector are allowed to dispose off the left over material/fabrics up to 2 per cent of Cost Insurance Freight (CIF) value of imports, on consignment basis. Recognizing that settling the accounts for every consignment is complex and time consuming it has been decided to allow disposal of left over material on the basis of previous year's imports.

Export Processing Zones (EPZs) can be summarized as a unit bearing clusters of specially designed zones of aggressive economic activity for the promotion of export. The main concept of Export Processing Zones was conceived in the early 1970s to promote the growth of the sickening export business of India. Further, the meaning of Export Processing Zones (EPZs) can be broadly defined as an area enjoying special government of India support with respect to fiscal incentives, tax rebates and other exclusive benefits for the growth of export.

A free trade zone (FTZ) or export processing zone (EPZ) is an area of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments.[1] It is a region where a group of countries has agreed to reduce or eliminate trade barriers.[2] Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products. The world's first Free Trade Zone was established in Shannon, Co. Clare, Ireland Shannon Free Zone [[2]]. This was an attempt by the Irish Government to promote employment within a rural area, make use of a small regional airport and generate revenue for the Irish economy. It was hugely successful, and is still in operation today Free Trade Zones are also known as Special Economic Zones in some countries. Special Economic Zones (SEZs) have been established in many countries as testing grounds for the implementation of liberal market economy principles. SEZs are viewed as instruments to enhance the acceptability and the credibility of the transformation policies and to attract domestic and foreign investment. In 1999, there were 43 million people working in about 3000 FTZs spanning 116 countries producing clothes, shoes, sneakers, electronics, and toys. The basic objectives of EPZs are to enhance foreign exchange earnings, develop export-oriented industries and to generate employment opportunities.

Export Processing Zones (EPZs) also encompasses pre-defined infrastructural facilities and regulations pertaining to establishment of such zones and environmental stipulations, respectively. These Export Processing Zones of India were established to help the growth of Indian export commodities, especially from the fast growing sectors.

Objectives of setting up of EPZs

Encourage and generate the economic development Encourage Foreign Direct Investments (FDI) To channel the sources of foreign exchange within the system in a phased manner Foster the establishment and development of industrial enterprises within the said zones Encourage and generate wider economic activities by encouraging foreign investments for the

development of the zones To channel the foreign exchange earnings for the further development of these zones and explore new areas for the development of Indian exports Encourage establishment and development of Indian industries and business enterprises and facilitate with proper infrastructure Generate employment opportunity Upgrade labor and management skills Acquire advanced technology for increased productivity Ensure world class quality of products

Three-tier management system in EPZs

Tier one is headed by the Ministry of Commerce headed by the Commerce Secretary, which drafts and

implements policies and reviews the performance of each such zones Tier two is headed by the Board of Approval (BOA), which is responsible for examination of proposals for opening up of new enterprises in the zone and which is headed by a person of the level of Additional Secretary The Development Commissioner, who is the chief executive of the Export Processing Zone, heads the three tiers. The Development Commissioner is vested with the power for the day-to-day function of the zone. Further, he is the head of functions relating to administration, approval of investment, and he also enforces various regulatory provisions

Export Processing Zones (EPZ) Location Map:

Prominent Indian Export Processing Zones

Kandla Free Trade Zone (KAFTZ), Kandla, Gujarat Santa Cruz Electronic Export Processing Zone (SEEPZ), S. Cruz, Maharashtra Cochin Export Processing Zone (CEPZ), Cochin, Kerala Falta Export Processing Zone (FEPZ), Falta,West Bengal Madras Export Processing Zone (MEPZ), Madras, Tamil Nadu Noida Export Processing Zone (NEPZ), Noida, Uttar Pradesh Visakhapatnam Export Processing Zone (VEPZ), Visakhapatnam, Andhra Pradesh While the Santa Cruz Electronics Export Processing Zone (SEEPZ) is meant exclusively for the exports

of electronics and gems and jewelry, all other zones are multi-product zones. 100% foreign equity is welcome in EOUs and EPZs