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 c Agriculture. Food & Marine Apparel & Clothing Arts & Crafts Automotive & Automobile Bicycle & Rickshaw c c c Chemicals & Dyes Construction Materials Cosmetics c .

c lectrical & lectronic Gems & Jewelry Hand & Machine Tools c c Hardware & Software Herbal & Ayurvedic Home Textile & Furnishings Household & Home Supplies Industrial Goods & Products Leather & Leather Products c c Medical & Pharmaceutical Products Metals. Minerals & Ores Musical  uipments c .

c ½atural Stones Office & Commercial Supplies Packing Materials &  uipment c c Paper & Paper Products Plant & Machinery Plastic & Plastic Products Printing & Publishing Rubber & Rubber Products c c Scientific & Laboratory Instruments Shipping & Aviation Sports Goods Telecommunication Products Textile. Fabrics & Yarns c .

c ñ How to Import -Introduction Pricinpal Law & Import xport Policy c ñ ñ Registration with Regional Licencing Authority and obtaining IC Code ñ Licence Application Fees ñ malidity of Licence ñ Conditions of Licence ñ Imports under Special Scheme for xporters ñ Selecting the Overseas Supplier ñ Finalising the Terms of Import ñ Payment against Imports ñ Letter of Credit ñ Scrutiny of documents and Retirement of Documents ñ Mode of payment & Time limit for Import Remittance ñ Customs Clearance of imported goods ñ Classification of Customs tariff and Levy of Customs Duty ñ arehousing of Imported go ods ñ Import by xport of Services ñ Import through Courier ñ Import for personal use ñ Import of Samples ñ Import of Prototype ñ Import of Computer. Computer parts and Computer Software ñ Import of Passenger Baggage è        .

  è       [As governed by the Foreign Trade (Development & Regulation) Act. 1992] ith the globalisation of Indian economy and conse uent upon comfortable balance of payment position Government of India has liberalised the Import Policy and practically all Controls on imports have been lifted.  .Imports may be made freely except to the extent they are regulated by the provisions of Import Policy or by any other law for the time being in force.



In exercise of c . Under this Act. imports of all goods is Free except for the items regulated by the policy or any other law for the time being in force.  Imports in to India are governed by Foreign Trade (Development & Regulation) Act 1992.

fee. confiscation and redemption and confiscation of conveyance. suspension of a licence. 1993. application for grant of licence.c the powers conferred by the Foreign Trad e (Development & Regulation) Act 1992 the Government has issued the following Rules & Order: Foreign Trade(Regulation)Rules. conditions for licences. signing of any declaration/statement or documents.     . provide for grant of special licence. cancellation of licence. declaration as to the value and uality of imported goods. power to enter the premises and inspect. amendment of licence. refusal of licence. things and conveyance. documents. which inter alia. provisions regarding making. Foreign Trade (xemptio n from Application of Rules in Certain Cases) Order 1993 ½otifications under Foreign Trade (Development & Regulation) Act 1992. declaration as to the Importer. search and seizure of goods.xporter Code number. utilisation of imported goods. settlement.

xport Procedures(molume 1). ITC(HS) Classification of Import and xport Items. Output and malue Addition ½orms.1999 Handbook of Import . Handbook of Import .    . The present import policy and procedures in respect of various commodities/category of importers. xport Policy. 1997-2002.03.2000.xport Procedures: (molume 2) Duty xemption Scheme: Input . are. contained in the following publications issued by the Ministry of Commerce and revised from time to time: Import . 1997 -2002 as modified upto 31.03. inter alia. 1997-2002 as modified upto 31.


 The Import .xport Policy and Procedure books issued by the Government are amended/clarified/ explained by the Ministry of Commerce from time to time. ½otifications Policy Circulars c . The types of ½otifications/Clarifi cations/Instructions issued by the Ministry for this purpose are: Public ½otices.

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Import of items included in Canalised list are permitted to be imported through Canalising Agencies. £     £   . Thus items not appearing in Prohibited list. List of Prohibited items of import are detailed below: Tallow. Fat or Oils rendered.      Be aware of the import potential and the commercial viability of the commodity/product. including ivory. Prohibited items are not permitted to be imported at all. For import of items appearing in Restricted list you need secure import licence . Check whether the items of your interest fall in the Restricted list of ITC(HS) Classifications of xports & Imports items. animal rennet and wild animals including their parts and products and ivory any part and products. A large number of Consumer goods are freely importable without licence. unrendered or otherwise of any animal origin. Third category of items comes under the Canalised list of items. Restricted list and or in Canalised list can be imported Freely without any import licence.


      !     £   £  .

25000/= "!   ! An application for grant of IC Code ½umber should be made in the prescribed proforma given at Appendix 3. c . no such registration is necessary for persons importing goods from/ to ½epal provided malue of a single Consignment does not exceed Rs. The application duly signed by the applicant should be supported by the following documents: Bank Receipt (in duplicate)/demand draft for payment of the fee of Rs. However.      Registration with Regional Licensing Authority is a pre -re uisite for import of goods. The Customs will not allow clearance of goods unless: The importer has obtained I Code ½umber from Regional Licensing Authority.1000/- Certificate from the Banker of the applicant firm as per Annexure1 to the form.I.

a copy may also be furnished. è     . Import Licence Application Fee. The application fee shall be deposited by way of deposit in an authorized branch of Central Bank of India indicating the head of Account 1453 Foreign Trade and xport Promotion Minor Head 102. is allotted to a company and the same is valid for all its branches/offices/units. only one IC no. a copy of the letter of legal authority may be furnished. However. should be made to the Regional Licensing Authority concerned as specified in Appe ndix 3. If there is any non-resident interest in the firm and ½RI investment is to be made with repatriable benefits. if PA½ has not been allotted. The applilcation for grant of IC ½o.c Two copies of passport size photographs of the applicant duly attested by the banker of the applicant.         #    $%% The Registered Office or HO or Branch Office (duly authorized by the HO in this behalf) should apply for allotment of IC ½o.III. is likely to be granted within 3 days of the receipt of the complete application and re uisite documents. A copy of Permanent Account ½umber issued by Income Tax Authorities. In case of specific approval. as the case may be. are not associated as proprietor/partners/directors with any other firm/company the IC ½o. a simple declaration indicating whether it is held with the general/specific permission of the RBI on the letter head of the firm should be furnished. Declaration by the applicant that the proprietors/partners/directors of the applicant firm/company. full particulars thereof along with a photocopy of RBI's approval. The IC ½o. i s allotted with a condition that be can export only with the prior approval of the RBI. If there is ½RI investment without repatriation benefit.

ñ Items of information relevant to applicant should only be filled and remaining items may be marked not applicable. c .  ñ Application form should be made in the prescribed form in duplicate along with the above enclosures. ñ ach copy of the application form should be signed in ink by the authorised person. mentioned against serial 1 to 8 of above paragraph. also in duplicate. ñ The form should be neatly typed/handwritten in bold capital letters only.

in case an I Code holder no longer wishes to operate under the allotted code number.c ñ Modification of particulars of the applicant should also be fur nished on this form by filling the relevant items.    . the matter should be brought under the notice of the Regional Licensing Authority to make the Code number ino perative. However.

import of such items are freely permitted. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. The ITC(HS) Classification of xport and Import items contains 99 chapters and in each chapter there are column heading covering xim Code. items description.  . For items not mentioned as Prohibited. policy and nature or restriction. Restricted or Canalised List for import in ITC(HS) Classification of xport and Import items. There is no need to obtain any license or permission f or importing such goods.

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  An application for grant of an import licence or CCP for import of the items mentioned as restricted for import in ITC(HS) Classification of xport and Import items may be made to the regional licensing authority concerned.  .



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Rs. 50. 2 lakh. where the value of goods exceeds Rs. 200 where the value of goods specified does not exceed Rs. 200 and a maximum of Rs. 200 where Application is filed be SSI units where the CIF value of goods specified in the application does exceed Rs. Rs.  very application for import licence or CCP should be accompanied by 2 copies of a bank receipt from the Central Bank of India or a Bank Draft from any Bank indicating the deposit in accordance with the prescribed scale of fees.1 lakh 50 thousand. Rs. ' .000. Rs.000. 200 where application is fro grant of duplicate licence. 2 per thousand or part thereof subject to a minimum of Rs. 50.

c .Minor Head 102. !      By way of deposit in an authorized branch of Central Bank of India indicating the Head of Accounts 1453 Foreign Trade and xport Promotion .

Crossed DD on a scheduled bank for the re uisite amount should be made in favour of the concerned licensing authority. "Director General of Foreign Trade".c Import Licence Application Fee. Such fees can also be deposited with Indian Missions abroad. Or. The Bank receipt must show the name of the department viz. The bank receipt should be drawn in favour of Pay & Accounts Officer concerned. m    .


 Besides import licence for import of restricted items there are other variety of licences and such licences have different period of validity. £#     . xport Promotion Capital Goods Licence validity 24 months Customs Clearance Permit " 12 months DPB " 12 months Advance License/Special Imprest Licence For Project/Turnkey Project "18 months or co -terminus with the contracted duration of the Project For the cases where the license expires before the last day of the month. the license shall be deemed to be valid until the last day of that month.

        .  License revalidation can be done on merits but not beyond 12 months by the concerned licensing authority for a period of six months at a time reckoned from the date of expiry of the validity period.

  the last date for receipt of applications for grant of licenses is 28th February of the licensing year unless otherwise specified.      .




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c .    #   ñ the goods covered by the license shall not be disposed of except in accordance with the provisions of the IM Policy. 1997-2002 or in the manner specified by the licensing authority in the license. ñ the applicant for a license shall execute a bond for complying with th e terms and conditions of the license.

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À          . the goods for the import of which a license is granted shall be the property of the licensee at the time of import of which a license is granted shall be the property of the licensee at the time of import and up to the time of clearance through the Customs. the goods covered by the license for import shall not be exported without the written permission of the DGFT. the goods for the import of which a licensee is granted shall be new goods.      no person shall transfer or ac uire by transfer any license issued by the licensing authority except in accordance with the provisions of the P olicy. unless otherwise stated in the license.

3 working days Duty free license where input-output norms are notified .10 working days Issuance/renewal of xport House/Trading House/Star Trading House/Super Star Trading House . 5 working days All licenses falling under Chapter 8 . 5 working days Miscellaneous .5 working days SIL . 15 working days Revalidation of license and extension of export obligation period by RLA .  Provided the application is complete in all respects along with prescribed documents. PCG licenses/export licenses/export licenses/specific import licenses .15 working days Amendment of any category of license . 15 working days c . .7 working days Fixation of Standard input -output norms .45 working days DPB .5 working days Acceptance of Bank Guarantee/Legal undertaking . 3 working days Redemption of Bank Guarantee/Legal undertaking/ndorsement of Transferability .5 working days Duty free license where input-output norms are notified but cases are to be placed before ALC -15 working days Duty free license where input-output norms are not notified. the applicant -importer can expect the disposal in: IC ½o.

In case of loss of an Identity Card. in charge of the counter in each office. A foreign trade development officer (FTDO). Counter Assistance may also be availed of. On submission of the application at the counter the applicant will be handed over a token and advised to return the same day when he will be informed whether his application has been found complete and admitted for further processing by the office or if there are any deficiency or lacunae. a " Counter Assistance" service is provided in all the offices of the DGFT for speedy disposal of applications. 45 working days ½.    . If deficiency is noticed the same is sent back to the applicant. Applications in such cases will be received in the licensing offices at the counter. This apart.  )       An application for issuance of an Identity Card may be made in the prescribed form .B. a duplicate card is issued.c Fixation of deemed exports drawback rate . for amendments of minor nature/en uiries.


     * .     The Govt. of India has framed the certain schemes to promote exports.

fixtures. The period of fulfillment of the export obligation is 8 years reckoned from the date of issuance of licence. Under this scheme Customs duty is 5% if the export obligation is 5 times the CIF value of the capital goods or 4 times the CIF value of capital goods on ½F basis. In addition spares up to 20 per cent of the cost insurance and freight (CIF) value of the capital goods may also be imported under the scheme. Period from the date of issue of licence Proportion of total export obligation Block of 1st and 2nd year nil Block of 3rd and 4th year 15% Block of 5th and 6th year 35% Block of 7th and 8th year 50% c . Subject to an export obligation to be fulfilled over a period of time. Capital goods including jigs. dies and moulds may be imnported at a concessional rate of customs duty as per table given below.

The report should be submitted in the prescribed form 10C of the Handbook of Procedu res. & 29/97-Cus.c The licence holder under PCG sche me shall fulfill the export obligation over the specified period in the following proportions: An application for grant of license under this scheme should be made to the licensing authority concerned in the form given in Appendix 10 A of the Handbook of Procedures. the Ministry of Finance has issued ½otification ½o.. 28/97-Cus. For Customs duty exemption exemption in respect of imports under PCG scheme. duly certified by a Charted Accountant/Cost and orks Accountant to the Licensing Authority. Before clearance of goods through customs. the importer has to execute a bond supported by a bank guarantee with the Customs Authority in the prescribed manner. 1997-2002. both dated 1st April. À  . 1997. 1997-2002 along with documents prescribed therein. The license holder will also hav e to submit progress report of the export/supplies made and services provided.

This license and/or material imported thereunder shall not be transferable even after completion of export obligation. Annual Advance License .4. such inputs shall be subject to the payment of additional customs duty e ual to the excise duty at the time of import. c . except for products which are not excisable for which no such registration is re uired. The entitlement under this scheme shall be up to 125% of the average FOB value of export in the preceding licensing year. Such annual advance license shall be issued with positive value addition without stipulation of minimum value addition. Star Trading Houses and Super Star Trading Houses Holding the certificate as merchant exporter where they agree to the endorsement of the name(s) of the supporting manufacturer on the relevant annual advance license shall also be entitled for the annual advance license. Imports against this is exempted from payment of Additional customs duty. 1 crore in the preceding year and registered with excise authorities.granted to merchant exporter or manufacturer exporter for the import of inputs re uired for the manufacture of goods without payment of basic customs duty. Trading House. 30/97-Customs both dated 1. xport House. duty free import of inputs is permitted under the following schemes: Advance License . shall be entitled for Annual Advance License. According to the IM Policy 1997-2000. Reference: ½otification ½o.Manufacturer exporter with export performance of Rs. Special Additional Duty.97. However.

# . holders of license under the PCG scheme. Advance Intermediate License: This license is granted to a manufacturer exporter for the import of inputs re uired in the manufacture of goods to be supplied to the ultimate exporter holding an Advance Lice nse/Special Imprest License. supply of goods to refineries and proejcts/purposes for which MpF permits import of such goods on zero customs duty. Such Special Imprest License is granted for the Duty Free import of inputs re uired in the manufacture of goods to be supplied to the oUs/units in PZs/STP/HTP. Safeguard duty. MoF. Special Imprest License: This license is granted for the duty free import of inputs re uired in the manufacture of goods to be supplied to the ultimate exporter holding an Advance License/Special Imprest License.c Anti Dumping Duty. in addit ion to Basic customs duty and surcharge thereon. projects financed by multilateral/bilateral agencies/funds as notified by the Dept. of conomic Affairs. Fertilizer Plants if the supply is made under the procedure of International Competitive Bidding. if any.

C. an indigenous supplier shall produce the copy of the L/C together with a photocopy of the Duty Free License. Duty ntitlement Pass Book scheme: It aims at neutralising the incidence of customs duty and surcharge thereon on the import content of the export c . In such cases. opened in his favour .£"  A duty free license holder except Advance Intermediate License Holder intending to source the inputs from indigenous sources/canalising agencies/OUs/PZ/HTP/STP units in lieu of direct imports has the option to source them against Advance Release Order denominated in foreign exchange/Indian rupees. the license is invalidated for direct import and permission in the form of ARO is issued which will entitle the supplier to the benefits of deemed exports. Back to back inland letter of credit: This is an alternative to ARO. For this the duty free license holder intending to avail such facility may approach a bank for opening an inland L/C in favour of an indigenous supplier. For the purpose of claiming Deemed xport benefits. duly endorsed by the bank concerned and the said documents shall for all purposes be deemed to be an ARO. Before this the bank will ensure that necessary bank guarantee or Letter of Undertaking has been executed by the license holder and endorsement to this effect has been made on the License. The indigenous supplier may supply the goods on the strength of L.

Special Import License(SIL): issued to xport/Trading/Star Trading/Super Star Trading houses.1997 and Circular ½o.2000. Dt. The scheme allows exporter to claim credit of cus toms duty at a specified percentage of the f. DPB holder may pay additional customs duty in cash. hile OUs can be set up anywhere in India subject to certain locational conditions. Gem & Jewellery xport Promotion Scheme: xporters of gem and jewellery are eligible to import their inputs by obtaining Rep. Such units may be set up under the OU/PZ scheme. Third party exports are also permissible for grant of credit under this scheme and DPB is valid for 12 months from the date of issue. 34/97 . ½o SIL licen ses will be issued for exports made after 31. units in PZ/FTZ can be set up in specific areas separated from the DTA by physical barriers.17.4. value of the exports made in freely convertible currency. precious metals and stones in accordance with the procedure specified in this regard. è            .HO-GMP or SSI CMM level 2 and above certification. This scheme is allowed to be operated on pre and post export basis by a manufacturer exporter and merchant exporter.4. xporters of gold/silver/platinum jewellery and articles thereof may import their essential inputs e. OUs/PZs . (vide MoF Customs ½otification ½o.1997). service providers and other exporters. License and diamond imprest license from the licensing authority.c product. 10/97-Cus. Manufacturers/processors with the uality certification from ISO. Deemed exporters. excluding rejects and items otherwise specifically permitted to be supplied to the domestic tariff area(DTA).03.2000.03.o.b. 100% OU/PZ/FTZ Scheme -This means an industrial unit offering i ts entire production. This provision has been withdrawn from 31. exporters of telecom and electronic e uipments. Although items outside the restricted list can be exported without Customs duty. for exports. small scale exporters(certified). if any. DGFT issues public notice featuring eligible products along with the credit rates under this scheme. Diamond.HACCP.Cus. This neutralisation is provided by way of grant of duty credit on the deemed import content in the expor t product as per Standard input output norms and considering the value addition achieved. Dated 7.g.


 Proper selection of the Commodity will depend up on marious Commercial and legal Considerations including the regulations Contained in the Current Import xport Policy. while selecting the product. particularly for Commercial purposes one should know the export regulations in the exporting Countries. Procedure. c .

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Directorate of Industries.The credit worthiness of the overseas supplier. Japan yellow pages. International Trade Fairs and xhibitions for which you may contact: International Trade Promotion Organisation(ITPO). available from leading booksellers in India including. should. Similar informations are also available in our Import -xport database. The information regarding overseas supplier can generally be obtained from the following sources: Trade Directories and Yellow Pages. Chamber of Commerce. USA yellow pages etc. The importer can also take the assistance of Credit Information Agencies for specific commercial information on overseas suppliers. They may also contact Trade Information Centres of the country concerned. The advertisement in foreign papers may also be useful. Reputed overseas suppliers normally have their Indenting Agents with offices in India and contract can also be finalised through them for smoother operations. his capacity to fulfil that contract. Consulate Generals and Trade Representatives of various countries in India and abroad. therefore. Indenting Agents of Foreign Suppliers. Pragati Maidan. £  "#  )     Some overseas suppliers have appointed their agents in India. Friends and relatives in foreign countries. Correct address of these agencies can be obtained from the overseas countries trade representatives posted in India. !       "#   Successful completion of an import transacti on will mainly depend upon the capability of the overseas supplier to fulfil his contract.   "#    Imports can be made from any country of the world except Fiji and Ira . like Singapore yellow pages. ½ew Delhi. These agents procure orders from the Indian parties and arrange for the supply of goods from c . etc. etc. be properly verified beforeentering into a contract with him. Confidential reports about the supplier may be obtained through the banks and Indian embassies abroad.

Terms of Payment-Amount. Standards and specifications. prototype of engineering goods when imported into India as samples for executing or for use in connection with-export orders are exempt from customs duty. mode of payment. Samples are subject to re-export and other conditions as specified in the Geneva Convention.07. port of shipment.07. Period of Delivery/Shipment. Similarly. Terms of Delivery. etc. &     '    This is an important subject and should be handled with extreme care and caution.1994. Besides. commercial samples brought into India as personal baggage by bona fide commercial travellers and businessmen or imported into Into India by post or by air are exempt from the customs duty. delivery schedule. the Central Government has exempted bona fid e commercial samples and prototype of engineering goods when imported into India by post or by air or by courier service by manufacturers of export goods. c . Once you are satisfied with the samples and the creditworthiness of the overseas supplier. The different aspects of an import contract are enumerated as under some of which may be relevant and other may not be: Product. Mode & Currency. you can proceed to finalise the term of the contract to be entered into. etc. you should call for the samples or catalogue and other relevant literatures a nd the specification of the items to be imported. Inspection. Quantity.c their principal abroad. payment and documentation. all relevant conditions of the trade deal. Labelling and Marking. Packing. 1952. Total value of the Contract. 154/94 dated 13. It is advisable to import through such agents as they can be readily contacted in case of any difficulty with regard to uality of goods. type of packaging.1994. There should not be any am biguity regarding the exact specifications of the goods and terms of the purchase including import price. It is advisable that before finalising the terms of Import Order. For this purpose. 154/94 dated 13. Taxes. vide Customs ½otification ½o. the Import Contract should be carefully and comprehensively drafted incorporating therein precise terms. Import of samples of goods is exempt from import duties under 'Geneva' Convention of 7th ½ovember. Likewise. vide ½otification ½o. Duties and Charges payable at xporting Country and payable in India on importation.

Insurance. Force Majeure or xcuse for ½on-performance of Contract. Arbitration. Remedies. Guarantee. Œ   .c Discounts and Commissions. Documentary Re uirements. Licenses and Permits.

inter alia. These terms have almost universal acceptance and are explained below:  ( 'x-work' means that the seller's responsibility is to make the goods availab le to the buyer at works or factory. be fully conversant with the mode of pricing and the manner of payment for the imports. It is mostly used for sale of plantation commodities such as tea. International Chamber of Commerce. This terms thus represents the minimum obligation for the seller. Has give detailed definition of a few standard terms popularly known as 'I½CO TRMS'. The full cost and risk involved in bringing the goods from this place to the desired destination will be borne by the buyer. should. coffee and cocoa. the Importer. Paris. As regards mode of pricing. the overseas supplier normally uote the terms prevailing in international trade. The importer for his benefits should know the meaning of the technical terminology.  "'£Œ hile finalising the terms of import contract. & £ +&"£ & ' . To avoid ambiguity in interpretation of such terms.

The seller's obligations are fulfilled when the goods are delivered to the carrier. but they are also used for road transport.(+&"'  These terms are used when the goods are to be carried by rail. &    +&   Once the goods have been placed alongside the ship. the seller's obligations are fulfilled and the buyer notified. The buyer has to bear all costs and risks of loss or damage to the goods hereafter. The buyer has to contract with the sea carrier for the carriage of the goods to the destination and pay the freight. c .

contract for the carriage of the goods to the port of destination named in the sale contract and pay the freight.  The sellers's responsibility ends the moment the contracted goods are placed on board the ship. the risk is already transferred to the buyer at the port of shipment itself. This being a shipment contract.   & +&  The seller must on his own risk and not as an agent of the buyer. As will be seen though the seller bears the cost of carriage to the named destination.  +&".c & . free of cost to the buyer at a port of shipment named in the sales contract. 'On board' means that a Received for Shipment' Bill of Lading is not sufficient. Such B/L if issued must be converted into 'Shipped on Board B/L' by using the stamp 'Shiped on Board' and must bear si gnature of the carrier or his authorised representative together with date on which the goods were 'boarded'. the point of delivery is fixed to the ship's rail and the risk of loss or of damage to the goods is transferred from the seller to the buyer at that very point.     .

and un ualified by .       Payment under better of Credit is a universally accepted mode of payment. Letters of Credit are Separate Transactions c .     # . ( *   A letter of credit differs from a bank guarantee.& +&  The term is basically the same as C & F but with the addition that the seller has to obtain insurance at his cost against the risks of loss or damage to the goods during the carriage. A Letter of Credit is a Signed instrument and an undertaking by the banker of the buyer to pay the seller a certain sum of money on presentation of documents evidencing Shipment of Specified goods subject to Compliance with the stipulated terms and Conditions. A commercial credit is neither a performance bond. the contract of sale under the transaction. nor it is a guarantee of the uantity or uality of the goods shipped. An issuing or confirming bank's obligation is independent of.

Banks accept documents under letters of credit for what those document purport to be on their face. The credits stipulate documents which have to be tendered for payment and it. Contract between the buyer and the seller is obligatory between themselves.c A contract for sale of goods between the seller and the buyer incorporates mode of settlement. ¦     . in the interest of all the parties concerned that the conditions and terms of credit are complete and precise and barefit of excessive details. Letters of credit by their nature are separate from the sale contract. and banks are not concerned or bound by such sale contracts even if the credits bear reference to them. therefore. It is. therefore. follows that in credits parties deal with documents and not with goods. The seller(beneficiary) cannot take advantage of any contractual terms in between the buyer and the opening bank and between the opening bank and the advising/confirming bank. Payment under a letter of credit does not depend on the performance obligation on the part of the exporter except those which the credit imposes. services or performances to which the documents relate.


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To ensure uniformity of interpretation in international trade. the International Chambers of Commerce in Paris has worked out t he "Uniform Customs and Practice for Documentary Credit". who is authorised by the issuing bank to advise the beneficiary of the Credit and to c .e. to a letter of Credit: Benificiary : The exporter of goods in whose favour the L/C has been established.f. They are now applied by the banks in nearly all countries including India. Issuing Bank: The Banker in the importers Country who opened the L/C. expressions and terms have evolved between banks dealing with documentary credits. Correspondent Bank or Advising Bank: The banker in the exporters co untry. 1994) which updates and consolidates the previous UCP 400. Customer/importer : The person we intends to import the goods and instructs bank to established Letter of Credit. The latest in the line of revisions is the UCP 500 (w. a number of practices.      Following persons are generally parties.    In the course of time. January 1. These have been revised and brought up to date several times in the past.

The Confirming bank may be correspondent bank itself or some other bank.c effect such payment or to accept and pay such bills of exchange or to negotiate against Stipulated documents and on Compliance of Stipulated terms and condition specified by the importer on the exporter. Revocable or Irrevocable Letters of Credit Confirmed Credit Transferable Credit ith or without Recourse Credit Revolving Letter of Credit Transit Credit Back to Back Credit The Sight Credit The Credit available against Time Draft (Usance Credit) The Deferred payment Credit. who at the desire of the beneficiary adds confirmation to the letter of Credit so that beneficiary can get payment without recourse from the Confirm ing bank. Generally following types of Letter of Credit are in operation. Confirming Bank: The banker in the exporters(beneficiary) country. .

necessary that complete and precise information must be given in the L/C c . Letter of credit also does no t offer any protection for the uality/ uantity of goods supplied under the L/C. The opener has to submit an L/C application to the opening bank. It would. therefore be necessary to know the nature of goods and specify submission of uality reports/inspection reports from an independent agency to ensure receipt of goods of proper uality. Confidential report on the seller must be obtained at the time of first transaction with him. It is. Before agreeing to open a letter of credit in favour of the seller. This is particularly important in case of import of chemicals and such other goods. the opener must be satisfied with the creditworthiness and general reputation of the seller. The instructions contained in the L/C application is the mandate for the issuing bank a nd letter of credit will be issued in accordance with this application. therefore. ntire success of an L/C transaction depends on proper conduct of the seller.   !(   !     Letter of credit offers almost complete protection to the seller but the buyer is put to many disadvantages and has to make payments against documents only.

The L/C application must nevertheless contain all the re uired/information based on which L/C could be opened by the bank. The reference to underlying sale contract must be avoided as far as possible. Forex rates are always uoted as two way price i. must be brought to the notice of opening bank immediately. There is always some difference in buying and selling rates. Since exchange rates are volatile. These rates are calculated by the banks as per the guidelines issued by the Foreign xchange Dealers Association of India (FDAI). documents delivered by the bank at the time of a favourable exchange rate will enable the Indian purchaser to pay less of Indian rupees. Import contact may be concluded either in terms of I½R or in foreign currency. the related documents are also prepared in I½R and no conversion is involved. The L/C must be scrutinized to ensure that it has been properly issued and is in conformity with L/C application. at a rate at which the bank is willing to sell foreign currency(buying rate) and at a rate at which the bank is willing to buy foreign currency(selling rate). However. here the contracts are in I½R. the payment is made in Indian rupees e uivalent to the foreign currency. Discrepancy.08. unit rate and uantity of the goods covered under L/C and details of documents re uired in absolute clear and unambiguous terms. '' £ c . Howev er. After the L/C has been issued by the bank.1993. The e uivalent rupee value is arrived at by applying suitable exchange rate. All exchange rates by authorised dealers are uoted in terms of their capacity as buyer or seller. where the bill is drawn in foreign currency. the maximum spread available to bank is restricted in terms of celling imposed by RBI. including imports and exports.e. Merchant rates are the exchange rates applied by the bankers for transaction with their customers for various purposes. hen the price of foreign currency is uoted in terms of home or local currency it is called direct uotation basis. a copy thereof must be obtained immediately. if any. However. This has been in application since 02. there is a difference between inter -bank exchange rates and merchant rates. Inter-bank rates are the rate for transactions amongst the authorised dealers in foreign exchange and depend on the market conditions. These rates are applied by banks to standardise the forei gn exchange- rupee conversion process.c application form specifying therein the description.

c This rate is applied for all clean remittances outside India. This involves booking of forward exchange contract with the bank of the importer. can be avoided by the following methods: ñ By re uesting the supplier to invoice the goods in Indian rupees (possible only when the seller agrees to i t) ñ By entering into a forward exchange contract. Reputed importers can always bargain with the bank for improvement in the card rates for reducing their rupee liability on conversion of foreign currency into Indian rupees. For booking forward contract the importer should approach his bank with which an L/C has been opened. Also a distinction is made between spot rates and forward rates. ''. Thus all foreign inward remittances which are made payable in India are converted by applying this rate. For selling foreign currency to its customer by the bank such as for issuance of bank drafts.000 drawn on any commercial bank having branch at the overseas destination will be converted into rupees at TT buying rate. The bank will verify suitable documents to ensure the authenticity and the amount of permitted currency of the underlying transaction.  £ This rate is applied for purchase of foreign currency by banks when the banks in India have already obtained the cover in India. date and number of the forward contract will be mark ed on such documents under the stamp and signature of the bank to ensure that more than one forward contract is not booked in respect of the same underlying c . whereas forward rates are fixed in advance for a transaction that will mature at a specified date or during a specified period in future imports. The bank will book a forward contract only against genuine trade transaction. The amount. mail/telegraphic transfer etc. è   &  ( xchange risk arising on account of adverse movement of the exchange rates. Spot rates are applicable on the day of transaction. Reading Rates-The rates announced by the banks every day morning are card rates. A mail transfer issued by a bank in Dubai for US $ 10.

the issuing banker(of the overseas supplier) will examine the documents and if found in order it will hand over the same to the importer after debiting his account with a mount involved or against acceptance as per the terms of the credit. If the documents of import are not received within the agreed period of the contract. provided the bank is satisfied with the circumstance leading to the non - performance of the contract. A transaction may be covered either in parts or in whole. treating the documents as collateral security.c transaction. In case the documents are drawn under L/C. Following this the overseas banker will send the documents to the importer's banker in India. the seller will submit the complete set of documents to his bankers with the re uest to either purchase/discount the documents to his banker with the re uest to either purchase/discount the documents or same on collection basis to the importer. Otherwise early delivery or cancellation of forward contract would lead to unnecessary charges. After preparing the documents the overseas seller will tender the documents to his banker for negotiation. after receiving the documents. The impoter's bank will advise the importer to collect the shipping documents either against payment or acc eptance as per the terms of the contract. Ordinarily. here the documents are under a contract(½on-L/C case). In the former case the seller's bank finances the sellers whereas i n the latter case. the documents are prepared strictly in conformity with the letter of credit. The bank. hen the documents are under L/C. The importers should be careful in chosing the period of forward contract. the maturity of the forward contract matches with that of the underlying transaction. as per FDAI rules. The RBI allows substitution of an import order on specific re uest. In case the documents are received before the stipulated date and the importer wants early delivery. the bank will a gain levy charges for early delivery. The period and extent to which an exposure is to be covered is left to the choice of the customer. c . no financial facility is extended to the overseas seller. The seller's banker may advance some money against documents sent on collection basis while. the contract needs to be cancelled(an fresh contract booked if desired) for which the bank will levycancellation charges as per FDAI rules. will examine them to ensure that t hey are strictly drawn as per the terms of the credit.

c If the documents are not in line with the terms of the credit.    . or it can contact the importer's bank(in the buyer's country) for authorisation. or it can also make payment under the reserve against seller's indemnity. the overseas banker can either refuse to negotiate further and ask the seller to send them on collection basis only.

items description. import of such items are freely permitted. There is no need to obtain any license or permission for importing such goods. policy and nature or restriction. The ITC(HS) Classification of xport and Import items contains 99 chapters and in each chap ter there are column heading covering xim Code. For items not mentioned as Prohibited. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule.  . Restricted or Canalised List for import in ITC(HS) Classification of xport and Import items.

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  An application for grant of an import licence or CCP for import of the items mentioned as restricted for import in ITC(HS) Classification of xport and Import items may be made to the regional licencin g authority concerned. .


If the documents are rejected. After receiving the document from the overseas supplier's bank the importer's bank will scrutinise them to verify the extent of correctness as per the terms of the L/C. The amendments and special instructions have been taken care of c . For discrepancies in the documents following principles are adopted: If discrepancies are such which violates any of exchange control or import control regulations. the documents should straightaway be rejected. The importer should also scrutinise the documents to ensure that: They were presented when the credit was in force and had not expired. If the discrepancies are of trivial nature not affecti ng the character of the transactions the documents may be accepted on merits.   This is a very important function and this should be done with great care. immediate notice to that effect should be given to the bank to safeguard the importer's interests.The documents prescribed by the beneficiary are carefully scrutinised by the issuing banker.

The payment in either case is accepted only from the bank account of importer. known as retirement of documents. documents against payment(D/P) or documents against acceptance(D/A) basis. For any overdue period a penal interest will be charged. xact uantities are shown and is drawn in appropriate currency of the origin of goods Bill of leading is presented in full set of negotiable copies and is on board bill of lading and duly signed In case the goods are imported on cash against documents(CAD). The documents are released to the importers against payment in case of DP bills and against acceptance in case of DA bills. where applicable. the importer needs to take delivery of documents from the banker before completion of the customs formalities. If the bank is out of funds the interest is charged to the importer's account. . tallies with amount of draft. This can be done by tendering the funds e uivalent to the value of documents and the bank charges exchange control copy of import license. Form A-1 duly completed for remittance of foreign exchange. This process. needs the importer to apply to authorised dealer/banker who is in possession of documents.c The amount of bill does not exceed the value of L/C All documents re uired in the L/C have been made available Documents carry re uired endorsements The documents do not contain discrepancies which violate any exchange control/import control regulations The invoice is duly signed.

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   General-check whether all documents in full sets as per L/C terms have been received Documents had been presented before the expiry date All the documents are dated subse uent to the date of issue of the L/C Cancellation/overwriting in all documents are authenticated Bills of xchange-check whether Drawn on the person indicated in the L/C and duly signed up by the beneficiary of the credit Drawing is within L/C amount and in the same currency as per the L/C The amounts in words and figures are the same and identical with the amou nt stated in the invoice c .

Invoice. of the License/OGL indicated Bill of lading is submitted within 21days from the date of shipment. Scrutiny for Insurance documents-check whether the policy is taken out in the name of the shipper c . if part shipment is not allowed Full set is submitted Freight is shown as prepaid/payable at des tination. check whether invoice: Is made out in the name of the person who had opened the L/C Quantity. numbers. B/L shows freight amount. regarding drawing under L/C has been made and the Bill must have been issued stamped./Indent ½o. mentione d as per L/C ½o charge other than stipulated in L/C in included Additional copy for xchange Control purposes is submitted The date and no./Order ½o. unit price and value are uoted as per L/C hether unit price and value are uoted as per L/C The description of the merchandise corresponds to the description in the L/C The arithmetical calculations are correct Import license/OGL/Contract ½o.c Superscription. if no specific time is between the date of issue and expiry of L/C The date of shipment is between the date of issue and expiry of L/C Full uantity of goods is shipped. unless L/C terms permits third party bill of lading The consignee's name is as per L/C The B/L is manually signed The description of goods is consistent with L/C The ports of loading/destination are mentioned as per L/C Marks. uantity and weight agree with the invoice The carrying vessel belongs to any particular line as per L/C Ade uately stamped Properly endorsed If AB. whether flight number and date of departure mentioned If freight has been added separately in invoice and no separate freight certificate of shipping company is submitted. as per L/C Bill of lading shows 'on board shipment' Parties are notified as per L/C terms Carrying vessel's name has been mentioned in Bill of Lading The beneficiary's name is shown as consignor.

marks. date of B/L Amount of insurance as per L/C terms hether drawn in the same currency as the L/C Description of goods agree with B/L Risks as per L/C are covered The place where claims are payable is as per L/C terms Ade uately stamped Details such as name of carrying vessel. agree with the B/L Certificate of analysis.etc.e. weighment. ports of load ing/destination.f.c Certificate/policy is according to Letter of Credit terms Risk commences w. The certificates are issued by the authority stipulated in L/C ½ame of the shipper is properly shown The samples drawn relate to the goods actually shipped Date of sample verification is within the date of shipment   .

     It is issued by the authority stipulated in the L/C The description of goods agrees with that in the invoice .

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Paris. the importers are likely to be conversant with the brochures issued by the International Chamber of Commerce(ICC). &      ! .   All other documents stipulated in the L/C are ver ified They are issued by the authorities specified in the L/C They contain the details as re uired by the L/C For matter relating to Documentary Collections and Commercial terms.

  Uniform Customs and Practice for Documentary Collection and Commercial Terms Uniform Rules of Collections (ICC522) Uniform Rules for a Combined Transport Document (ICC298) I½CO Terms 1990 RBI regulations for Making Payments by importers     .

import of such items are c . For items not mentioned as Prohibited. Restricted or Canalised List for import in ITC(HS) Classification of xport and Import items.

 . items description. There is no need to obtain any license or permission for importing such goods. The ITC(HS) Classification of xport and Import items contains 99 chapters and in each chapter there are column heading covering xim Code.c freely permitted. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. policy and nature or restriction.

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Œ     Payments in retirement of bills drawn under L/C as well as bills received from abroad for collection against imports into India. Selling rate prevailing on the 10day or the forward exchange contract rate where applicable. In case of non-payment by the drawee within 10days. Payment against bills should not be accepted in cash. by debit to the account of the importer with themselves or by means of a crossed che ue drawn by him on his other bankers. 20.C. the importer's liability on the foreign currency bill shall be crystallised by converting the foreign currency amount in to rupee at the B. Fixing of Re.  An application for grant of an import licence or CCP for import of the items mentioned as restricted for import in ITC(HS) Classification of xport and Import items may be made to the regional licencing authority concerned. may be held in foreign currency for a maximum period of 10days from the date of receipt of documents by the Bank.000 or more. the I½R e uivalent is arrived at by applying the appropriate foreign exchange rate. This rule also applies to private imports where the amount involved is Rs.  uivalent-In order to bring uniformity in the handling of import bills under L/C authorised dealers have been directed by the RBI of follow the following procedure: Sight import bills received under L/C and conforming to credit terms. must be received by authorised dealers. irrespective of amount. In case the bills are drawn in foreign currencies. Payment for import bills -here the import bills are drawn in Indian Ruppes (I½R). Authorised dealers shall keep a proper record of the date of receipt of documents. an e uivalent amount(plus bank charges) is debited to the account of the importer by the authorised dealer and the amount remitted to the foreign seller. c .

c In case the 10th day is holiday or a Saturday. the charges as per FDAI rule 9 shall be levied. '        . the importer's liability in rupees shall crystallise in the next following working day.15% on the bill amount at the time of converting foreign currency into I½R irrespective of the fact whether the bill is retired within 10 days or la ter. Authorised dealer shall carry swap costs from the customer. Such interest shall be recovered from the date of negotiation or the date of crystallisation of the rupee liability and thereafter penal interest shall be recovered. Authorised dealers shall charge commission/handling charges at the rate of 0. Authorised dealer shall charge interest at the rate as prescribed by RBI for advances to non-priority sectors from time to time on rupees advances made against the import bills pending retirement by the customer. hen the rupee liability on an import bill is crystallised at the Forward xchange Contract Rate and it results in early/late delivery.

Authorised dealers are permitted by the RBI to make r emittances in such cases even if the period of 6 months expires.12 up to a c . In case. Authorised dealers may make remittances of amounts so withheld provided the earlier remittance had been made through them. Accordingly. Sometimes. settlement of import dues may be delayed due to disputes. The remittance against imports should be completed not later than 6 months from the date of shipment. deferred payment arrangements involving payments beyond 6months are not permissible without approval of RBI/Gol. it may be allowed in accordance with the provisions contained in para 7A. financial difficulties. ½o payment of interest is involved for the additional period. However. where the overseas supplier insists on payment of interest. ½o interest payment should be allowed to be remitted on these withheld amounts. no objection to importers withholding a small part of the cost of the goods not exceeding 15 percent towards guarantee of performance etc. provided - Authorised dealer is satisfied about the bona fides of the circumstances leading to the delay in payment.

since goods would normally be cleared before the due date of payment. 10. have actually been imported into India. Interest remittance on import bills-interest accrued on usance bills under 'normal interest clause' or of overdue interest paid on sight bills for a period. In case of pre -payment of usance import bills. Impoter's documents-The importer should comply with certain obligations: submission of xchange Control Copy of Bill of ntry for Home Consumption/Postal rappers to the authorised dealer. However.c maximum period of 60 days beyond 180days from the date of shipment provided the import bill is paid within that p eriod. including cases of advance remittances permitted (mide para 7A. not exceeding 6 months from the date of shipment in respect of imports w ithout prior approval of RBI. This will act as evidence that the goods for which the payment was made. Authorised deale rs should also advise this re uirement to their importer customers in writing while delivering the documents against acceptance. xchange Control Copy of Bill of ntry for Home Consumption/ postal wrappers at the time of effecting remittance of import bill. provided the goods imported are c . Remittances against import of books may be allowed without restrictions as to time-limit. Authorised dealers should ensure that in all cases. remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which the interest has been claimed or the 'prime' rate (or its e uivalent) of the country in the currency of which the goods are invoiced. providedno interest payment is involved nor has the importer forgone any part of the discount/rebate normally allowed to importers towards compensation for del ay in settlement of dues. here interest is not separately claimed remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at th e prevalling 'prime'. these are submitted by their importer customers and are verified.e. whichever is higher. In respect of imports made on D/A basis.    Remittances against bills received for collection in respect of imports by post parcel may be made by authoris ed dealers. authorised dealers should insist on production of documentary evidence of import i. interest under normal interest clause would mean interest at the prime rate (or its e uivalent) of the country in the currency of which the goods are invoiced.

here goods to be imported are not of a kind normally imported by post parcel or where authorised dealer is not satisfied about the bona fides of the applications the case should be referred to RBI for prior approval with full particulars together with relative parcel receipts/or wrappers.     .c such as are normally despatched by post -parcel. the parcel wrapper should be produced in support of the remittance application. In these cases the relative parcel receipts must be produced as evidence of dispatch through the post and on undertaking to submit importers should furnish post parcel wrappers within three months from the date of remittance. If the parcel has already been received in India.

The importers need to present a Bill of ntry on receipt of the advise of the arrival ofthe vessel. appraised. The goods are then examined in the docks and the B/ rerutned to the Scrutinising Appraiser for completion and license debit. value. the help of accredited customs clearing agents has to be taken. The B/ is noted in Import Department. The entire process of customs clearance is complex and to carry out this procedure smoothly. The B/ will then be presented in the Appraising Department with all the relevant documents like invoice. If the documents are ade uate for determining the classification. The Second Check Procedure-Under this 80 to 90 percent of the consignments are cleared. The First Check Procedure-Applicable only when appraisers/assessing group finds it difficult to complete the assessment on the basis of the documents made available. the form is completed by the Appraiser and then countersigned by The c . The appraising procedure may be of two types.       Customs Authorities and the Clearing agents play the key role in the import of goods. All goods imported into India have to pass through the procedure of Customs clearance as they cross Indian border. The Scrutinising Appraiser in the group gives the examination order. ITC license. In this case the Customs 'out of charge' is given by the Accounts Department soon after the recovery of duty. Import license and catalogue literature. evaluated and then allowed to be taken out of charge of the Customs for use by the importer. The goods are examined. assessed. Bill of Lading. with corresponding endorsementmade against the consignment entry in the IGM along with the date.

FTZs. Then it is returne d to the importers for payment of duty in the Accounts/Cash department. There are two main wings of Customs House. examination of cargo for assessment purpose is chiefly the function of the Appraising Department having special staff of examiners in the docks/Air cargo shed. The Customs authority functions under the Ministry of Finance (MoF) with the Central Board of xcise & Customs at the apex. attested and dated at the time of the examination. These apart some of the Customs house in India have introduced the simplified computer procedure for speedy clearance of consignment through B/. It is then forwarded to the License Department for licensing debit and audit. PZs. If the examination spreads over more than one day. Irrespective of the procedure. In the 'Appraisement' wing the job of collecti on of revenue is assigned. The records of the examination and weighment should be declared.        The customs administration vests in CBC for implementing the provisions of the Customs Act. In the docks. after payment of Port Trust charges. arehousing. The board is headed by a Chairman and assisted by Members.1962. Customs House Agents Regulations. Port Trust.Customs procedures. policy and broad procedures(Other than those concerning anti-smuggling) nforcement of Import xport prohibitions Foreign Travel and Cases on imports and exports Baggage concessions and rules. the Shed Appraiser/xaminer shall examine the goods and if in order. Tariff Classification and Tariff advices. the result on each day's progress should be disclosed. The Member (Customs) looks after the following matters: Customs Law and its interpretation and application. inland Bonded arehouses. After recovery of duty the original B/ is retained in the Accounts Department and the duplicate and other copies are returned to the importer for getting the goods examined in the doc ks. shall give the out of charge for taking delivery from the custodian of the goods viz.c Assistant Collector. c . while the 'Preventive' one aims at prevention of smuggling. 100% OUs etc. Customs maluations.

Delhi .Dy. mizag. The Changes are made each year on the Day of the Fiscal Budget.   . The hierarchy of the Authorities: Central Board of xcise & Customs (CBC) in the MoF Under which operates:Customs Commissionerates of Mumbai.c Matters relating to Drawback. Assistant Commissionerates regarding Customs work handled by them. Calcutta. Customs Co-operations Council. Supervision and control over Customs Commissionerate of M umbai. Cochin. Calcutta. Chennai. Kandla. Delhi.Commissioners. Commissioners. Goa and T uticorin. Cochin. Commissioners.Asst. Chennai. Kandla.Addl.Port of clearance. Goa and Tuticorin and Customs Divisions of other Central xcise Commissioners. misakhapatnam. All other works on Customs not specified elsewhere. Bangalore. organisations concerning customs. Bangalore. Directorate of Drawback Field Level:Principal Commissioners Customs . Customs clearance of the imported goods is done by the customs Authorities functioning under the overall charge of MoF. Commissioners . Chemical laboratories and Directorate of Drawback The Ministry of Finance (MoF) issues Customs ½otifications to levy duty on the imported goods. GATT and SCAP and international talks and agreements.

Section 12 of the Customs Act. 1962 read with Customs Tariff Act. commonly known as Harmonised Coding System came into being. However. The basic features of the Import Tariff ½omenclature are outlined below: The headings.'62 empowers levy of duties on goods imported into or exported from India. 1975. the new tariff import schedule based on international convention of Harmonised Commodity and Co ding system. 1975-called the import Tariff and xport Tariff respectively.        The basic legislation is the Indian Customs Act. 1986. the rates at which the different import export duties shall be leviable have been respectively specified in the First and Second Schedule to the Customs Tariff Act. the Section and Chapter ½otes and the interpretive Rules. 28. Customs duties are levied in three ways-Specific rate-at the rate prescribed per c . ith effect from Feb.

e.c unit of item i. This duty can be levied either as a percentage of value of goods or at a specified rate. Korea and so on. c . This Schedule is amended from time to time of Customs Tariff Act. or are re uired to be tested by the customs house laboratory for fulfilment of license conditions. customs fix the exchange rate for conversion into the Indian rupees at a predetermined rate which is published in customs houses on a daily basis. Types & Levy of Customs duties: - Basic duty: all goods imported into India are chargeable to duty as prescribed in the 1st Schedule of Customs Tariff Act. Additional Duty: Also known as countervailing duty. weight or number of length. Special Additional Duty: It is levied at the rate of 4%. is levied on the cost of imported goods and is e ual to excise duty levied on like goods when manufactured in India. GATT -bound items. Imports from specified countries enjoy preferential duty. Surcharge: It is levied at the rate of 10% of the basic rate on all commodities except crude oil and petroleum products. or The re uired document is not forthcoming. This is generally the result of special status accepted under bilateral trade agreements or otherwise. Specific and advalorem -levied in both ways. The objective is to ensure that the protection provided by the import duty to domestic industry is not eroded. Ad -valorem duty-levied on the value of the item. However. gold and silver. the incidence of customs duties on various goods imported are obtained as follows: Total duty payable=(Landed cost including CIF of the item concerned + Basic customs duty under the Customs Tariff Act + Surcharge thereon + Additional duty + Special Additional duty as per Finance Act). etc. Anti -dumping Duty: This is levied on specified goods imported from specified countries to protect indigenous industry from injury resulting from USA. or The appeaiser desires to see the representative sample before completing the bill of entry for the purpose of verification o f the value/description. Customs Duty Rates: hen the import invoice is in any currency other than Indian rupees. Customs Duty Assessment: The assessment of goods to duty is done on the basis hether the goods covered by the B/ are su ch as are regularly imported.

1971. It is for the importer to establish that the goods satisfied the description in the license unless he is able to establish the fact he would not be entitled to lawful import thereof. of the customs house after theimport General Manifest which gives a detailed description item wise of the goods brought by the concerned vessel is filed by the steamer Agent. The department maintains a register for every license accepted and debited showing the l ast balance on the license. etc. from foreign or coastal Ports. In case there is any error on the part of the appraising authority then possession of even a valid license will not confer any right upon the importers to import such goods again on the basis of similar licenses. the type of goods and whether they can be lawfully imported as per the terms of the license. are cleared on this prescribed forms presented under the B/ Regulations. Bill of ntry-This is a document on the strength of which clearance of imported goods can be effected. If the appraising official is satisfied that the license is in order.    .c Getting Import License checked-The appraising official checks the license for their description. importers name. Its form has been standardised by the Central Board of xcise and Customs. he will send the license with B/ to license section for registration and audit. The importer is likely to know the term of license. validity period. All goods discharrged from a vessel. It should be presented for 'noting' in the import dep t. value.

There is no need to obtain any license or permission for importing such goods. The ITC(HS) Classification of xport and Import items contains 99 chapters and in each chapter there are column heading covering xim Code.  . The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. Restricted or Canalise d List for import in ITC(HS) Classification of xport and Import items. import of such items are freely permitted. policy and nature or restriction. For items not mentioned as Prohibited. items description.

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  An application for grant of an import licence or CCP for import of the items mentioned as restricted for import in ITC(HS) Classification of xport and Import items may be made to the regional licencing authority concerned. c .

with proven identity and track record can avail of this. Govt.c          An importer may not like to clear or may have certain problems in clearing the imported goods immediately on payment of duty for home consumption. Towards this the importer should file a set of yellow coloured B/ known as warehousing B/. Bulk importers. & PSUs. provided he is satisfied with the arrangement. Instead of going in for a hundred per cent examination only a part of the cargo is checked. This process does away with the procedure of processing. provided the goods are partly examined and payment of duty verified. Green Channel : This fast-track facility has been introduced to simplify and expedite the process of cargo clearance. consignment of a single product of well known brand name and importers with identified and unblemished track record are allowed to avail this facility. bodies and PSUs. In that case the importer can deposit the goods in a Public or Private Bonded arehouse. Thus. and the time consumed by the appraising and licensing sections. hen the duty is paid. Self-Assessment Scheme: Applicable to goods without any ITC license/CCP or any restrictions thereof. Any importer. the importer can avail the facility of deferring payment of duty on imported goods pending their actual clearance. the goods would be cleared in the docks. including Govt. Depts.    # . The objective is to enable importers effecting repetitive imports of some commodities to assess their own B/ and determine their duty liability and pay the duty accordi ngly.

has been pegged at 1/3rd of the level prescribed for merchandise exports. The salient provisions of IM Policy relating to services exports are given below : "Services" include all the 161 tradeable services covered under the General Agreement on Trade in Services where payments for such services is received in free foreign exchange. Apart from extending all possible facilities applicable to merchandise exports. March 1999 d. A new Chapter has been added in the revised IM Policy 1997 -2002. the threshold limit for recognition as Service xport House etc. recognising the importance of export of services and the potential in the sector.. c .

authorised dealers should ensure submission of xchange Control Copy of Bill of ntry for home consumption in the case of imports valued at Rs. Imports without Forex remittances: c . designs. 1998.c Facilities for service providers: The service providers shall be eligible for the facility of PCG Scheme as described in Chapter 6 of IM Policy. Imports by courier are now classified on merits in the respective customs Tariff headings.5(vii) shall also extend to the service providers availing licences under this scheme. software in diskettes and CDs related to their line of services as a part of passenger baggage without a licence. If the CIF value is Rs.100000. integrated circuits and layout designs. the relative Bill of ntry is re uired to be filed by the registered courier service. This is not regarded as baggage for the purpose of assessment of duty and clearance therof.        As laid down by the current xim Policy. importers are to file separate B/ as in the case of other imports. The new system of assessment and clearance of goods imported by courier is now governed under the Courier Imports & xports (Clearance) Regulations 1998. In case of remittances for imports through courier services. including of fice and other e uipment re uired for their own professional use. Service providers are also permitted to import drawings.100000 or more. The provisions of paragraph 6. import of goods through courier is permitted in accordance with the Courier Imports & xports (Clearance) Regulations. Facility of import of restricted items by service providers: Service providers shall be entitled to import restricted items up to 10% of the foreign exchange earned by them during the preceding licensing year for import of essential goods related to their line of business. The practice of charging a uniform duty on articles imported through courier has been discontinued. If the CIF value of the consignment imported does not exceed Rs. 100000 or more. The service providers shall also be eligible for the facility of OU/PZ/ HTP/STP scheme.

those goods shall be deemed to be regarded as prohibited goods under the Customs Act. Foodstuffs and Medicines by Charitable organisations are als o allowed. 100 000 per annum is allowed for personal consumption of foreign citizens. Any type of goods for which the c. except alcohol and tobacco. Television teams are allowed. Import of exhibits including construction and decorative materials re uired for the temporary stands of the foreign exhibitors at the exhibitions.g. Import of free gifts and relief supplies by certain organisations/institutions e. Othe rwise. Films. raw-films etc. by foreign publicists like Radio. uinine of more than 500 tablets or = pounds powder or 100 ampules is not permissible. value shall not exceed Rs. are allowed.41 of the Handbook of Procedures): Import of items by United ½ations Organisation and Specialised Agencies and its officials without payment of Customs duty. of India in the Ministry of Commerce/India Trade Promotion Organisation and is being held in public interest. fair or similar show or display for a period of 6 months on re -export basis is allowed provided these fairs are sponsored/approved by the Govt.i. ½ational Defense Fund is allowed. Indian Red Cross Society. 1994. Also.c Imports not involving foreign exchange remittance is allowed as given below( vide Para 5. Also import of e uipments. Press. provided they are no t: c . 1962. Import of food parcels. However. Import of Medical  uipment by Indian Doctors and Professionals is allowed under the Baggage Rules. subject to a limit of Rs. Import of goods by any person as passenger baggage is permitted to the extent admissible under the Baggage Rules 1994. for any tourist. except consumables.        Importers under this category do not need any IC number. articles of high value whose re-export is obligatory under the Baggage Rules shall be re-exported on his leaving India. Goods as Baggage by Foreign Mountaineering xpedition Teams and Painting and other Display Articles. 2000 can also be imported through Post or otherwise for personal use.f.

1 lakh(CIF) in one consignment save vegetable seeds. Tea samples not above ecgaged in the production of or hgaving industrial license/LoI or research. bees.   . even those in the restricted in ITC(HS)Classifications of xport and Import items is allowed without a license for a value notmore than Rs. bees and new drugs by any importer. consumer electronic items (save hearing aids and life saving e uipments and items for which import is canalised under IM Policy.           Computers including personal computers. 1. as applicable.50 lac and Rs. as the case may be. alcoholic beverages. tea. Computer Software can also be imported freely without licence despite the fact computer software is regarded as Consumer Goods. shall have to be paid. Keyboards or monitor valued upto Rs. As regards the procedure for personal imports is concerned the same may involve sending of advance remittance if re uired by the overseas supplier. industri. Under the Rules various kinds of articles can be imported upto certain value limit depending upon the duration of sta y of the passenger abroad and on the basis of Resident and ½on-Resident Status of the passenger. 7000/. the customs duty. retirement of documents and remittance of foreign exchange. opening of letter of credit. ½evertheless.c megetable seeds exceeding 1 pound in weight. books and periodicals.      This may be allowed on payment of duty without a license to an actual user.2000 (CIF) in one consignment is allowed without a license by any person connec ted with Tea industry. provided the number of items i mported does not exceed 10 in number in a year.respectively can be imported freely without any licence. customs clearance of the goods and payment of customs duty.     Bona fide technical and trade samples of items. Passenger Baggage Rules and import duty structure for baggage as applicable for such imports under the Baggage Rules has been given seperately c .

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