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

How How

[As governed by the Foreign Trade (Development & Regulation) Act, 1992] With the globalisation of Indian economy and consequent 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.

Pricinpal Principal Law






Imports in to India are governed by Foreign Trade (Development & Regulation) Act 1992. 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.In exercise of

application for grant of licence.03. signing of any declaration/statement or documents. ITC(HS) Classification of Import and Export Items. provide for grant of special licence.1999 Handbook of Import . Notifications and Circulars The Import . Handbook of Import . declaration as to the value and quality of imported goods. 1993.2000. amendment of licence. power to enter the premises and inspect. inter alia.Export Procedures(Volume 1). cancellation of licence. refusal of licence. search and seizure of goods. 1997-2002 as modified upto 31. are. suspension of a licence. documents.Exporter Code number. which inter alia. Foreign Trade (Exemptio n from Application of Rules in Certain Cases) Order 1993 Notifications under Foreign Trade (Development & Regulation) Act 1992. fee.03. Import Export Policy The present import policy and procedures in respect of various commodities/category of importers. contained in the following publications issued by the Ministry of Commerce and revised from time to time: Import Export Policy. 1997 -2002 as modified upto 31.Export Procedures: (Volume 2) Duty Exemption Scheme: Input Output and Value Addition Norms. The types of Notifications/Clarifi cations/Instructions issued by the Ministry for this purpose are: Public Notifications Policy Circulars Notices. declaration as to the Importer. provisions regarding making. .the powers conferred by the Foreign Trad e (Development & Regulation) Act 1992 the Government has issued the following Rules & Order: Foreign Trade(Regulation)Rules. 1997-2002. utilisation of imported goods. confiscation and redemption and confiscation of conveyance. conditions for licences. things and conveyance. settlement.Export Policy and Procedure books issued by the Government are amended/clarified/ explained by the Ministry of Commerce from time to time.

no such registration is necessary for persons importing goods from/ to Nepal provided Value of a single Consignment does not exceed Rs. Registration with Regional Licencing Authority and obtaining IEC Code Registration with Regional Licensing Authority: Registration with Regional Licensing Authority is a pre -requisite for import of goods. A large number of Consumer goods are freely importable without licence. 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 Exports & Imports items. Third category of items comes under the Canalised list of items.Select the commodity/Product you wish to import : Be aware of the import potential and the commercial viability of the commodity/product. Prohibited items are not permitted to be imported at all. However. 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. animal rennet and wild animals including their parts and products and ivory any part and products. Fat or Oils rendered. including ivory. Restricted list and or in Canalised list can be imported Freely without any import licence.1000/Certificate from the Banker of the applicant firm as per Annexure1 to the form. . Import of items included in Canalised list are permitted to be imported through Canalising Agencies.I. unrendered or otherwise of any animal origin. Thus items not appearing in Prohibited list. List of Prohibited items of import are detailed below: Tallow. The Customs will not allow clearance of goods unless: The importer has obtained IE Code Number from Regional Licensing Authority. 25000/= Obtaining IEC Code Number An application for grant of IEC Code Number should be made in the prescribed proforma given at Appendix 3.

y . is likely to be granted within 3 days of the receipt of the complete application and requisite documents. is allotted to a company and the same is valid for all its branches/offices/units. However. should be made to the Regional Licensing Authority concerned as specified in Appe ndix 3. How to fill up IEC application: y Application form should be made in the prescribed form in duplicate along with the above enclosures. y y The form should be neatly typed/handwritten in bold capital letters only. The Registered Office or HO or Branch Office (duly authorized by the HO in this behalf) should apply for allotment of IEC No. a copy may also be furnished.III.Two copies of passport size photographs of the applicant duly attested by the banker of the applicant. Declaration by the applicant that the proprietors/partners/directors of the applicant firm/company. Import Licence Application Fee. also in duplicate. only one IEC no. In case of specific approval. The applilcation for grant of IEC No. as the case may be. a copy of the letter of legal authority may be furnished. full particulars thereof along with a photocopy of RBI's approval. If there is any non-resident interest in the firm and NRI investment is to be made with repatriable benefits. 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. The IEC No. are not associated as proprietor/partners/directors with any other firm/company the IEC No. Each copy of the application form should be signed in ink by the authorised person. if PAN has not been allotted. A copy of Permanent Account Number issued by Income Tax Authorities. If there is NRI investment without repatriation benefit.II. i s allotted with a condition that be can export only with the prior approval of the RBI. Items of information relevant to applicant should only be filled and remaining items may be marked not applicable. Profile of the exporter/importer in a given format at Appendix 3. mentioned against serial 1 to 8 of above paragraph. 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 Export Promotion Minor Head 102.

200 where the value of goods specified does not exceed Rs.000. the matter should be brought under the notice of the Regional Licensing Authority to make the Code number ino perative. There is no need to obtain any license or permission f or importing such goods. in case an IE Code holder no longer wishes to operate under the allotted code number.1 lakh 50 thousand. 200 and a maximum of Rs. items description.000. Rs. Rs. policy and nature or restriction. 200 where Application is filed be SSI units where the CIF value of goods specified in the application does exceed Rs.Minor Head 102. . 200 where application is fro grant of duplicate licence. 2 lakh. Restricted or Canalised List for import in ITC(HS) Classification of Export and Import items. Procedure to be followed for grant of import license: 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 Export and Import items may be made to the regional licensing authority concerned. Rs.y Modification of particulars of the applicant should also be fur nished on this form by filling the relevant items. Rs. 2 per thousand or part thereof subject to a minimum of Rs. 50. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. import of such items are freely permitted. 50. The application fee shall be deposited either: By way of deposit in an authorized branch of Central Bank of India indicating the Head of Accounts 1453 Foreign Trade and Export Promotion . Licence Fees for Licence Application: Application Fees Every 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. However. Import Policy: For items not mentioned as Prohibited. The ITC(HS) Classification of Export and Import items contains 99 chapters and in each chapter there are column heading covering Exim Code. where the value of goods exceeds Rs.

the license shall be deemed to be valid until the last day of that month. Such fees can also be deposited with Indian Missions abroad. Last date for filling applications: the last date for receipt of applications for grant of licenses is 28th February of the licensing year unless otherwise specified. The Bank receipt must show the name of the department viz. The bank receipt should be drawn in favour of Pay & Accounts Officer concerned. Conditions Licensing conditionalities: The consideration provided: y of license for import is Licence taken into the goods covered by the license shall not be disposed of except in accordance with the provisions of the EXIM Policy.Import Licence Application Fee. y the applicant for a license shall execute a bond for complying with th e terms and conditions of the license. Validity of Licence Besides import licence for import of restricted items there are other variety of licences and such licences have different period of validity. "Director General of Foreign Trade". 1997-2002 or in the manner specified by the licensing authority in the license. Crossed DD on a scheduled bank for the requisite amount should be made in favour of the concerned licensing authority. Or. Revalidation of License: 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. . Export Promotion Capital Goods Licence validity 24 months Customs Clearance Permit " 12 months DEPB " 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.

7 working days Fixation of Standard input -output norms . 3 working days Duty free license where input-output norms are notified .It shall be deemed to be a condition of every license for import that no person shall transfer or acquire by transfer any license issued by the licensing authority except in accordance with the provisions of the P olicy. 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.5 working days Duty free license where input-output norms are notified but cases are to be placed Duty free before license where ALC input-output -15 norms are working not notified.10 working days Issuance/renewal of Export House/Trading House/Star Trading House/Super Star Trading House .45 working days DEPB All licenses Miscellaneous falling under 5 Chapter 15 8 working 5 working working days days days . Disposal period for import application: Provided the application is complete in all respects along with prescribed documents. days EPCG licenses/export licenses/export licenses/specific working Acceptance Redemption of of Bank Guarantee/Legal undertaking 3 working Bank Guarantee/Legal undertaking/Endorsement import licenses 15 working days days days of Revalidation of license and extension of export obligation period by RLA . the goods for the import of which a licensee is granted shall be new goods.15 working days Amendment of any category of license . the goods covered by the license for import shall not be exported without the written permission of the DGFT. unless otherwise stated in the license.5 Transferability .5 working days SIL . the applicant -importer can expect the disposal in: IEC No.

Fixation of deemed exports drawback rate - 45 working days N. Counter Assistance may also offices at the counter. a " Counter Assistance" service is provided in all the offices of the DGFT for speedy disposal of applications. of India has framed the certain schemes to promote exports. 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. Importer's own Identity Card: An application for issuance of an Identity Card may be made in the prescribed form . dies and moulds may be imnported at a concessional rate of customs duty as per table given below. Export Promotion Capital Goods Schemes: Capital goods including jigs. Subject to an export obligation to be fulfilled over a period of time. Applications in such cases will be received in the licensing The Govt. 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. A foreign trade development officer (FTDO). This apart. a duplicate card is issued. 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 NEF basis. fixtures. In case of loss of an Identity Card.B. 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% . for amendments of minor nature/enquiries. Imports under Special Scheme for Exporters be availed of. in charge of the counter in each office. The period of fulfillment of the export obligation is 8 years reckoned from the date of issuance of licence. If deficiency is noticed the same is sent back to the applicant.

1997-2002. both dated 1st April. Before clearance of goods through customs. The report should be submitted in the prescribed form 10C of the Handbook of Procedu res. For Customs duty exemption exemption in respect of imports under EPCG scheme. Export House.4. Reference: Notification No. Annual Advance License . except for products which are not excisable for which no such registration is required.97. shall be entitled for Annual Advance License. the Ministry of Finance has issued Notification No.The licence holder under EPCG 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.granted to merchant exporter or manufacturer exporter for the import of inputs required for the manufacture of goods without payment of basic customs duty. Special Additional Duty. duty free import of inputs is permitted under the following schemes: Advance License .. The entitlement under this scheme shall be up to 125% of the average FOB value of export in the preceding licensing year. 1997. 1 crore in the preceding year and registered with excise authorities.Manufacturer exporter with export performance of Rs. Such annual advance license shall be issued with positive value addition without stipulation of minimum value addition. & 29/97-Cus. the importer has to execute a bond supported by a bank guarantee with the Customs Authority in the prescribed manner. duly certified by a Charted Accountant/Cost and Works Accountant to the Licensing Authority. . Imports against this is exempted from payment of Additional customs duty. This license and/or material imported thereunder shall not be transferable even after completion of export obligation. Duty Exemption Scheme: According to the EXIM Policy 1997-2000. 1997-2002 along with documents prescribed therein. 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. The license holder will also hav e to submit progress report of the export/supplies made and services provided. 28/97-Cus. However. such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import. Trading House. 30/97-Customs both dated 1.

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. 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 Lice nse/Special Imprest License. in addit ion to Basic customs duty and surcharge thereon. Duty Entitlement Pass Book scheme: It aims at neutralising the incidence of customs duty and surcharge thereon on the import content of the export .C. The indigenous supplier may supply the goods on the strength of L. 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. opened in his favour . MoF. holders of license under the EPCG scheme. 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. projects financed by multilateral/bilateral agencies/funds as notified by the Dept. Fertilizer Plants if the supply is made under the procedure of International Competitive Bidding.Anti Dumping Duty. Advance Release Order: A duty free license holder except Advance Intermediate License Holder intending to source source them the against inputs Advance from Release indigenous Order sources/canalising in foreign agencies/EOUs/EPZ/EHTP/STP units in lieu of direct imports has the option to denominated exchange/Indian rupees. 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. duly endorsed by the bank concerned and the said documents shall for all purposes be deemed to be an ARO. In such cases. Safeguard duty. an indigenous supplier shall produce the copy of the L/C together with a photocopy of the Duty Free License. supply of goods to refineries and proejcts/purposes for which MpF permits import of such goods on zero customs duty. of Economic Affairs. 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. if any. For the purpose of claiming Deemed Export benefits.

(vide MoF Customs Notification No. Dt.2000. Dated 7. This provision has been withdrawn from 31. for exports. Procedure. Manufacturers/processors with the quality certification from ISO. This scheme is allowed to be operated on pre and post export basis by a manufacturer exporter and merchant exporter. 34/97 . Deemed exporters. units in EPZ/FTZ can be set up in specific areas separated from the DTA by physical barriers. exporters of telecom and electronic equipments. EOUs/EPZs . particularly for Commercial purposes one should know the export regulations in the exporting Countries.03.WHO-GMP or SSI CMM level 2 and above certification.4. License and diamond imprest license from the licensing authority. if any. Although items outside the restricted list can be exported without Customs duty. Gem & Jewellery Export Promotion Scheme: Exporters of gem and jewellery are eligible to import their inputs by obtaining Rep. Exporters of gold/silver/platinum jewellery and articles thereof may import their essential inputs e.03. value of the exports made in freely convertible currency.HACCP.o. The scheme allows exporter to claim credit of cus toms duty at a specified percentage of the f. service providers and other exporters.product. DEPB holder may pay additional customs duty in cash.1997 and Circular No. No SIL licen ses will be issued for exports made after 31.17. DGFT issues public notice featuring eligible products along with the credit rates under this scheme.Cus.1997).g. Such units may be set up under the EOU/EPZ scheme. while selecting the product.2000. precious metals and stones in accordance with the procedure specified in this regard. small scale exporters(certified). 10/97-Cus. Diamond. excluding rejects and items otherwise specifically permitted to be supplied to the domestic tariff area(DTA).4. .b. Hints/Suggestion for finalisation of import order/contract: Proper selection of the Commodity will depend up on Various Commercial and legal Considerations including the regulations Contained in the Current Import Export Policy. Special Import License(SIL): issued to Export/Trading/Star Trading/Super Star Trading houses. 100% EOU/EPZ/FTZ Scheme -This means an industrial unit offering i ts entire production. 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. While EOUs can be set up anywhere in India subject to certain locational conditions. Third party exports are also permissible for grant of credit under this scheme and DEPB is valid for 12 months from the date of issue.

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

Currency. There should not be any am biguity regarding the exact specifications of the goods and terms of the purchase including import price. 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. 154/94 dated 13. etc. The different aspects of an import contract are enumerated as under some of which may be relevant and other may not be: Product. Besides. all relevant conditions of the trade deal. vide Customs Notification No. Inspection.their principal abroad. Once you are satisfied with the samples and the creditworthiness of the overseas supplier.1994. Quantity. 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. you should call for the samples or catalogue and other relevant literatures a nd the specification of the items to be imported. port of shipment. Marking. It is advisable to import through such agents as they can be readily contacted in case of any difficulty with regard to quality of goods. vide Notification No. 1952.1994. Samples are subject to re-export and other conditions as specified in the Geneva Convention. value of of the Contract. 154/94 dated 13. Similarly. It is advisable that before finalising the terms of Import Order. delivery schedule. Likewise. type of packaging. Duties and Charges payable at Exporting Country and payable in India on .07. Terms of of Labelling Payment-Amount.07. Taxes. Total Terms importation. payment and documentation. etc. For this purpose. Standards and specifications. Finalising the Terms of Import This is an important subject and should be handled with extreme care and caution. Import of samples of goods is exempt from import duties under 'Geneva' Convention of 7th November. the Import Contract should be carefully and comprehensively drafted incorporating therein precise terms. you can proceed to finalise the term of the contract to be entered into. 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. Period Packing. and Mode & Delivery/Shipment. Delivery. mode of payment.

but they are also used for road transport. It is mostly used for sale of plantation commodities such as tea. Documentary Guarantee. Free on Rail (FOR)/Free on Truck (FOT) These terms are used when the goods are to be carried by rail. . To avoid ambiguity in interpretation of such terms. Requirements. for Non-performance of Contract. Arbitration. the overseas supplier normally quote the terms prevailing in international trade. inter alia. Paris. Force Majeure or Excuse and and Commissions. The importer for his benefits should know the meaning of the technical terminology. coffee and cocoa.Discounts Licenses Insurance. The seller's obligations are fulfilled when the goods are delivered to the carrier. Permits. International Chamber of Commerce. The full cost and risk involved in bringing the goods from this place to the desired destination will be borne by the buyer. Free Alongside Ship (FAS) Once the goods have been placed alongside the ship. As regards mode of pricing. Has give detailed definition of a few standard terms popularly known as 'INCO TERMS'. Mode of Pricing and INCO TERMS While finalising the terms of import contract. Remedies. This terms thus represents the minimum obligation for the seller. be fully conversant with the mode of pricing and the manner of payment for the imports. The buyer has to bear all costs and risks of loss or damage to the goods hereafter. the Importer. These terms have almost universal acceptance and are explained below: Ex-work 'Ex-work' means that the seller's responsibility is to make the goods availab le to the buyer at works or factory. should. The buyer has to contract with the sea carrier for the carriage of the goods to the destination and pay the freight. the seller's obligations are fulfilled and the buyer notified.

Letters of Credit are Separate Transactions . contract for the carriage of the goods to the port of destination named in the sale contract and pay the freight. Cost Insurance Freight (CIF) 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. 'On board' means that a Received for Shipment' Bill of Lading is not sufficient. Gaurantee A letter of credit differs from a bank guarantee. An issuing or confirming bank's obligation is independent of. As will be seen though the seller bears the cost of carriage to the named destination. Cost and Freight (C & F) The seller must on his own risk and not as an agent of the buyer. the risk is already transferred to the buyer at the port of shipment itself. A commercial credit is neither a performance bond. free of cost to the buyer at a port of shipment named in the sales contract. 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'. This being a shipment contract. and unqualified by .Free on Board(FOB) The sellers's responsibility ends the moment the contracted goods are placed on board the ship. the contract of sale under the transaction. nor it is a guarantee of the quantity or quality of the goods shipped. Payment against imports Payment under better of Credit is a universally accepted mode of payment. 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. 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 Letter of terms Credit vs and Bank Conditions.

Customer/importer : The person we intends to import the goods and instructs bank to established Letter of Credit. therefore. Parties to a Letter of Credit: Following persons are generally parties. 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. The credits stipulate documents which have to be tendered for payment and it. They are now applied by the banks in nearly all countries including India. the International Chambers of Commerce in Paris has worked out t he "Uniform Customs and Practice for Documentary Credit". a number of practices. It is. therefore. January 1. Correspondent Bank or Advising Bank: The banker in the exporters co untry. Issuing Bank: The Banker in the importers Country who opened the L/C. Banks accept documents under letters of credit for what those document purport to be on their face.e. 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. To ensure uniformity of interpretation in international trade. Contract between the buyer and the seller is obligatory between themselves. and banks are not concerned or bound by such sale contracts even if the credits bear reference to them. The latest in the line of revisions is the UCP 500 (w. expressions and terms have evolved between banks dealing with documentary credits. follows that in credits parties deal with documents and not with goods. services or performances to which the documents relate.f. in the interest of all the parties concerned that the conditions and terms of credit are complete and precise and barefit of excessive details. 1994) which updates and consolidates the previous UCP 400. Letters of credit by their nature are separate from the sale contract. These have been revised and brought up to date several times in the past. to a letter of Credit: Benificiary : The exporter of goods in whose favour the L/C has been established.A contract for sale of goods between the seller and the buyer incorporates mode of settlement. who is authorised by the issuing bank to advise the beneficiary of the Credit and to . Uniform Customs and Practice for Documentary Credit In the course of time.

the opener must be satisfied with the creditworthiness and general reputation of the seller. Confidential report on the seller must be obtained at the time of first transaction with him. The opener has to submit an L/C application to the opening bank. Revocable Confirmed Transferable With Revolving Transit Back The The Credit available The Deferred payment Credit. 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. Entire success of an L/C transaction depends on proper conduct of the seller. 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. The Confirming bank may be correspondent bank itself or some other bank. therefore. Precautions to be taken at the time of establishing Letter of Credit 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. necessary that complete and precise information must be given in the L/C to Sight against Time Draft (Usance Back or without Letter Recourse of or Irrevocable Letters of Credit Credit Credit Credit Credit Credit Credit Credit Credit) .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. therefore be necessary to know the nature of goods and specify submission of quality reports/inspection reports from an independent agency to ensure receipt of goods of proper quality. Confirming Bank: The banker in the exporters(beneficiary) country. 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. It would. Letter of credit also does no t offer any protection for the quality/quantity of goods supplied under the L/C.

All exchange rates by authorised dealers are quoted in terms of their capacity as buyer or seller. These rates are applied by banks to standardise the forei gn exchangerupee conversion process. the payment is made in Indian rupees equivalent to the foreign currency. When the price of foreign currency is quoted in terms of home or local currency it is called direct quotation basis. a copy thereof must be obtained immediately.e. However. Inter-bank rates are the rate for transactions amongst the authorised dealers in foreign exchange and depend on the market conditions. if any. There is always some difference in buying and selling rates. The L/C application must nevertheless contain all the required/information based on which L/C could be opened by the bank. 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). where the bill is drawn in foreign currency. Merchant rates are the exchange rates applied by the bankers for transaction with their customers for various purposes. These rates are calculated by the banks as per the guidelines issued by the Foreign Exchange Dealers Association of India (FEDAI). The L/C must be scrutinized to ensure that it has been properly issued and is in conformity with L/C application. Import contact may be concluded either in terms of INR or in foreign currency. there is a difference between inter -bank exchange rates and merchant rates. This has been in application since 02. TT Selling Rate . Forex rates are always quoted as two way price i. The equivalent rupee value is arrived at by applying suitable exchange rate. must be brought to the notice of opening bank immediately. the maximum spread available to bank is restricted in terms of celling imposed by RBI. Discrepancy. The reference to underlying sale contract must be avoided as far as possible. Where the contracts are in INR. However. Howev er.application form specifying therein the description.08.1993. unit rate and quantity of the goods covered under L/C and details of documents required in absolute clear and unambiguous terms. the related documents are also prepared in INR and no conversion is involved. Since exchange rates are volatile. including imports and exports. After the L/C has been issued by the bank. documents delivered by the bank at the time of a favourable exchange rate will enable the Indian purchaser to pay less of Indian rupees.

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 . Spot rates are applicable on the day of transaction. The amount. 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. 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. Reading Rates-The rates announced by the banks every day morning are card rates. The bank will book a forward contract only against genuine trade transaction. For selling foreign currency to its customer by the bank such as for issuance of bank drafts. mail/telegraphic transfer etc.000 drawn on any commercial bank having branch at the overseas destination will be converted into rupees at TT buying rate. A mail transfer issued by a bank in Dubai for US $ 10. The bank will verify suitable documents to ensure the authenticity and the amount of permitted currency of the underlying transaction. y This involves booking of forward exchange contract with the bank of the importer. TT Buying Rate This rate is applied for purchase of foreign currency by banks when the banks in India have already obtained the cover in India. 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. Hedging against Forex risk: Exchange risk arising on account of adverse movement of the exchange rates.This rate is applied for all clean remittances outside India. can be avoided by the following methods: y By requesting the supplier to invoice the goods in Indian rupees (possible only when the seller agrees to i t) By entering into a forward exchange contract. Thus all foreign inward remittances which are made payable in India are converted by applying this rate.

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

policy and nature or restriction. Scrutiny of documents This is a very important function and this should be done with great care. The importer should also scrutinise the documents to ensure that: They were presented when the credit was in force and had not expired. Restricted or Canalised List for import in ITC(HS) Classification of Export and Import items. The ITC(HS) Classification of Export and Import items contains 99 chapters and in each chap ter there are column heading covering Exim Code. For discrepancies in the documents following principles are adopted: If discrepancies are such which violates any of exchange control or import control regulations. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. If the discrepancies are of trivial nature not affecti ng the character of the transactions the documents may be accepted on merits. the overseas banker can either refuse to negotiate further and ask the seller to send them on collection basis only.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 amendments and special instructions have been taken care of . 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. If the documents are rejected. the documents should straightaway be rejected. There is no need to obtain any license or permission for importing such goods. items description. Procedure to be followed for grant of import license: 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 Export and Import items may be made to the regional licencin g authority concerned. 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. Import Policy: For items not mentioned as Prohibited. import of such items are freely permitted.

For any overdue period a penal interest will be charged. The payment in either case is accepted only from the bank account of importer. This process. known as retirement of documents. where applicable. This can be done by tendering the funds equivalent to the value of documents and the bank charges exchange control copy of import license.The All amount documents of bill does in the not L/C exceed have the been value made of L/C required available Documents carry required endorsements The documents do not contain discrepancies which violate any exchange control/import control regulations The invoice is duly signed. If the bank is out of funds the interest is charged to the importer's account. needs the importer to apply to authorised dealer/banker who is in possession of documents. The documents are released to the importers against payment in case of DP bills and against acceptance in case of DA bills. documents against payment(D/P) or documents against acceptance(D/A) basis. Form A-1 duly completed for remittance of foreign exchange. Exact quantities 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). Checklist for Document (received under L/C) scrutiny: General-check whether all documents in full sets as per L/C terms have been received Documents had been in presented all before documents Exchange-check the the are expiry date All the documents are dated subsequent to the date of issue of the L/C Cancellation/overwriting Bills of of authenticated whether credit Drawn on the person indicated in the L/C and duly signed up by the beneficiary 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 . the importer needs to take delivery of documents from the banker before completion of the customs formalities. tallies with amount of draft.

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

marks. Following Terms Uniform Uniform INCO Rules Rules for a of Combined Terms Collections Transport Document (ICC522) (ICC298) 1990 are the brochures: Uniform Customs and Practice for Documentary Collection and Commercial RBI regulations for Making Payments by importers Import Policy: For items not mentioned as Prohibited.Certificate/policy Risk Amount Whether Description Risks The place Adequately agree Certificate The Name The certificates of samples as of drawn is according insurance in the goods per claims are to as same L/C Letter date per currency agree of Credit of L/C as with the terms B/L terms L/C B/L covered commences w.f. the authority is goods the stipulated properly actually in B/L weighment. ports of load ing/destination. Restricted or Canalised List for import in ITC(HS) Classification of Export and Import items. of where are is as per L/C payable terms stamped Details such as name of carrying vessel.e. with of are the drawn issued relate by shipper to the analysis. the importers are likely to be conversant with the brochures issued by the International Chamber of Commerce(ICC). Paris. L/C shown shipped Date of sample verification is within the date of shipment Certificate It is issued by the of authority stipulated in the origin L/C The description of goods agrees with that in the invoice Checking other documents 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 required by the L/C For matter relating to Documentary Collections and Commercial terms.etc. import of such items are .

by debit to the account of the importer with themselves or by means of a crossed cheque drawn by him on his other bankers. policy and nature or restriction. items description. an equivalent amount(plus bank charges) is debited to the account of the importer by the authorised dealer and the amount remitted to the foreign seller. . Fixing of Re. Equivalent-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. the importer's liability on the foreign currency bill shall be crystallised by converting the foreign currency amount in to rupee at the B. 20.C. Payment for import bills -Where the import bills are drawn in Indian Ruppes (INR). The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. irrespective of amount. must be received by authorised dealers.000 or more. There is no need to obtain any license or permission for importing such goods. Mode of payment Payments in retirement of bills drawn under L/C as well as bills received from abroad for collection against imports into India.freely permitted. In case the bills are drawn in foreign currencies. may be held in foreign currency for a maximum period of 10days from the date of receipt of documents by the Bank. the INR equivalent is arrived at by applying the appropriate foreign exchange rate. The ITC(HS) Classification of Export and Import items contains 99 chapters and in each chapter there are column heading covering Exim Code. Payment against bills should not be accepted in cash. Procedure to be followed for grant of import license: 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 Export and Import items may be made to the regional licencing authority concerned. In case of non-payment by the drawee within 10days. This rule also applies to private imports where the amount involved is Rs. Authorised dealers shall keep a proper record of the date of receipt of documents. Selling rate prevailing on the 10day or the forward exchange contract rate where applicable.

No interest payment should be allowed to be remitted on these withheld amounts. In case. it may be allowed in accordance with the provisions contained in para 7A. Authorised dealers may make remittances of amounts so withheld provided the earlier remittance had been made through them.In case the 10th day is holiday or a Saturday. No payment of interest is involved for the additional period. the charges as per FEDAI rule 9 shall be levied. 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. provided Authorised dealer is satisfied about the bona fides of the circumstances leading to the delay in payment. Time limit for import remittance: The remittance against imports should be completed not later than 6 months from the date of shipment. Authorised dealers shall charge commission/handling charges at the rate of 0. Accordingly. Authorised dealers are permitted by the RBI to make r emittances in such cases even if the period of 6 months expires. However. where the overseas supplier insists on payment of interest. settlement of import dues may be delayed due to disputes. deferred payment arrangements involving payments beyond 6months are not permissible without approval of RBI/Gol. financial difficulties.15% on the bill amount at the time of converting foreign currency into INR irrespective of the fact whether the bill is retired within 10 days or la ter.12 up to a . 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. Authorised dealer shall carry swap costs from the customer. Sometimes. When the rupee liability on an import bill is crystallised at the Forward Exchange Contract Rate and it results in early/late delivery. no objection to importers withholding a small part of the cost of the goods not exceeding 15 percent towards guarantee of performance etc. the importer's liability in rupees shall crystallise in the next following working day.

since goods would normally be cleared before the due date of payment. However. Remittances against import of books may be allowed without restrictions as to time-limit. Authorised deale rs should also advise this requirement to their importer customers in writing while delivering the documents against acceptance. these are submitted by their importer customers and are verified.e. In respect of imports made on D/A basis. including cases of advance remittances permitted (Vide para 7A. authorised dealers should insist on production of documentary evidence of import i. not exceeding 6 months from the date of shipment in respect of imports w ithout prior approval of RBI. whichever is higher. provided the goods imported are . 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 equivalent) of the country in the currency of which the goods are invoiced. 10. interest under normal interest clause would mean interest at the prime rate (or its equivalent) of the country in the currency of which the goods are invoiced. Impoter's documents-The importer should comply with certain obligations: submission of Exchange Control Copy of Bill of Entry for Home Consumption/Postal Wrappers to the authorised dealer. 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. Exchange Control Copy of Bill of Entry for Home Consumption/ postal wrappers at the time of effecting remittance of import bill. 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. have actually been imported into India. Where 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'. Postal Imports Remittances against bills received for collection in respect of imports by post parcel may be made by authoris ed dealers. Authorised dealers should ensure that in all cases. In case of pre -payment of usance import bills. This will act as evidence that the goods for which the payment was made.maximum period of 60 days beyond 180days from the date of shipment provided the import bill is paid within that p eriod.

The importers need to present a Bill of Entry on receipt of the advise of the arrival ofthe vessel. All goods imported into India have to pass through the procedure of Customs clearance as they cross Indian border.such as are normally despatched by post -parcel. Customs Clearance of imported goods Customs Authorities and the Clearing agents play the key role in the import of goods. with corresponding endorsementmade against the consignment entry in the IGM along with the date. 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. The B/E will then be presented in the Appraising Department with all the relevant documents like invoice. The goods are examined. Import license and catalogue literature. the parcel wrapper should be produced in support of the remittance application. 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 help of accredited customs clearing agents has to be taken. Where 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. assessed. If the documents are adequate for determining the classification. The entire process of customs clearance is complex and to carry out this procedure smoothly. The appraising procedure may be of two types. In this case the Customs 'out of charge' is given by the Accounts Department soon after the recovery of duty. value. the form is completed by the Appraiser and then countersigned by The . The Scrutinising Appraiser in the group gives the examination order. The B/E is noted in Import Department. The Second Check Procedure-Under this 80 to 90 percent of the consignments are cleared. If the parcel has already been received in India. The goods are then examined in the docks and the B/E rerutned to the Scrutinising Appraiser for completion and license debit. ITC license. evaluated and then allowed to be taken out of charge of the Customs for use by the importer. appraised. Bill of Lading.

The board is headed by a Chairman and assisted by Members. attested and dated at the time of the examination. after payment of Port Trust charges. while the 'Preventive' one aims at prevention of smuggling. Regulations. In the 'Appraisement' wing the job of collecti on of revenue is assigned. 100% Bonded EOUs Warehouses. 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. concerning Export imports and and policy and broad procedures(Other Enforcement Foreign Baggage Customs Agents Warehousing. Customs House inland EPZs.Customs procedures. Tariff Classification and Tariff advices.Assistant Collector. Then it is returne d to the importers for payment of duty in the Accounts/Cash department. If the examination spreads over more than one day. than anti-smuggling) prohibitions exports rules. Valuations. etc. There are two main wings of Customs House. The records of the examination and weighment should be declared.1962. shall give the out of charge for taking delivery from the custodian of the goods viz. Irrespective of the procedure. The Customs authority functions under the Ministry of Finance (MoF) with the Central Board of Excise & Customs at the apex. the result on each day's progress should be disclosed. These apart some of the Customs house in India have introduced the simplified computer procedure for speedy clearance of consignment through B/E. . Custom Authorities The customs administration vests in CBEC for implementing the provisions of the Customs Act. After recovery of duty the original B/E 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. Port Trust. The Member (Customs) looks after the following matters: Customs Law and its of Travel and interpretation those Import Cases on concessions and application. FTZs. the Shed Appraiser/Examiner shall examine the goods and if in order. It is then forwarded to the License Department for licensing debit and audit. In the docks.

With effect from Feb. the new tariff import schedule based on international convention of Harmonised Commodity and Co ding system. Bangalore. customs. 1962 read with Customs Tariff Act. Goa and Tuticorin and Customs Divisions of other Central Excise Commissioners. The basic features of the Import Tariff Nomenclature are outlined below: The headings. Goa and T uticorin. Commissioners. Commissioners . Delhi. the Section and Chapter Notes and the interpretive Rules. Bangalore.Commissioners. Customs Co-operations Council. Kandla. The Changes are made each year on the Day of the Fiscal Budget. Directorate Field Level:Principal of Commissioners Customs Drawback . 1975-called the import Tariff and Export Tariff respectively. Customs duties are levied in three ways-Specific rate-at the rate prescribed per . 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.'62 empowers levy of duties on goods imported into or exported from India. Visakhapatnam. Classification of Customs tariff The basic legislation is the Indian Customs Act. Chennai. 1975. and laboratories Under which operates:Customs Commissionerates of Mumbai. Delhi . All other works relating organisations on Customs to concerning not specified Drawback. Vizag. commonly known as Harmonised Coding System came into being.Asst. Kandla. However.Addl. 1986. Commissioners.Port of clearance. Cochin. Calcutta. Chennai. 28. GATT and ESCAP and international talks and Supervision and control over Customs Commissionerate of M umbai. Assistant Commissionerates Chemical Directorate of Drawback The Ministry of Finance (MoF) issues Customs Notifications to levy duty on the imported goods.Dy. Section 12 of the Customs Act. The hierarchy of the Authorities: Central Board of Excise & Customs (CBEC) in the MoF regarding Customs work handled by them. Calcutta. Customs clearance of the imported goods is done by the customs Authorities functioning under the overall charge of MoF. elsewhere. Cochin.Matters agreements.

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. or are required to be tested by the customs house laboratory for fulfilment of license conditions. Surcharge: It is levied at the rate of 10% of the basic rate on all commodities except crude oil and petroleum products. Customs Duty Assessment: The assessment of goods to duty is done on the basis Whether the goods covered by the B/E are su ch as are regularly imported. 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. . Anti -dumping Duty: This is levied on specified goods imported from specified countries to protect indigenous industry from injury resulting from USA. This Schedule is amended from time to time of Customs Tariff Act. Additional Duty: Also known as countervailing duty. Korea and so on. gold and silver. weight or number of length. Specific and advalorem -levied in both ways. is levied on the cost of imported goods and is equal to excise duty levied on like goods when manufactured in India. The objective is to ensure that the protection provided by the import duty to domestic industry is not eroded. Customs Duty Rates: When the import invoice is in any currency other than Indian rupees.unit of item i. GATT -bound items. 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). However. This is generally the result of special status accepted under bilateral trade agreements or otherwise. This duty can be levied either as a percentage of value of goods or at a specified rate. Ad -valorem duty-levied on the value of the item. etc. Imports from specified countries enjoy preferential duty. or The required document is not forthcoming. 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.e. Special Additional Duty: It is levied at the rate of 4%.

The department maintains a register for every license accepted and debited showing the l ast balance on the license. from foreign or coastal Ports. etc. . validity period.Getting Import License checked-The appraising official checks the license for their description. 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. he will send the license with B/E to license section for registration and audit. Import Policy: For items not mentioned as Prohibited. The ITC(HS) Classification of Export and Import items contains 99 chapters and in each chapter there are column heading covering Exim Code. If the appraising official is satisfied that the license is in order. The importer is likely to know the term of license. All goods discharrged from a vessel. 1971. are cleared on this prescribed forms presented under the B/E Regulations. Restricted or Canalise d List for import in ITC(HS) Classification of Export and Import items. Procedure to be followed for grant of import license: 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 Export and Import items may be made to the regional licencing authority concerned. import of such items are freely permitted. the type of goods and whether they can be lawfully imported as per the terms of the license. Its form has been standardised by the Central Board of Excise and Customs. There is no need to obtain any license or permission for importing such goods. value. items description. Bill of Entry-This is a document on the strength of which clearance of imported goods can be effected. 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. policy and nature or restriction. The information related to import policy for any item can be obtained from our site under Customs Duty Calculator Schedule. importers name. It should be presented for 'noting' in the import dep t. 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.

This process does away with the procedure of processing. provided he is satisfied with the arrangement. consignment of a single product of well known brand name and importers with identified and unblemished track record are allowed to avail this facility. Bulk importers. Instead of going in for a hundred per cent examination only a part of the cargo is checked. including Govt. The salient provisions of EXIM 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. In that case the importer can deposit the goods in a Public or Private Bonded Warehouse. When the duty is paid.. Thus.Warehousing of Imported goods 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/E known as warehousing B/E. Any importer. with proven identity and track record can avail of this. bodies and PSUs. Self-Assessment Scheme: Applicable to goods without any ITC license/CCP or any restrictions thereof. provided the goods are partly examined and payment of duty verified. recognising the importance of export of services and the potential in the sector. Govt. & PSUs. Depts. Export of services A new Chapter has been added in the revised EXIM Policy 1997 -2002. . March 1999 Ed. has been pegged at 1/3rd of the level prescribed for merchandise exports. 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. Green Channel : This fast-track facility has been introduced to simplify and expedite the process of cargo clearance. and the time consumed by the appraising and licensing sections. the threshold limit for recognition as Service Export House etc. The objective is to enable importers effecting repetitive imports of some commodities to assess their own B/E and determine their duty liability and pay the duty accordi ngly. Apart from extending all possible facilities applicable to merchandise exports.

Service providers are also permitted to import drawings. 100000 or more. The new system of assessment and clearance of goods imported by courier is now governed under the Courier Imports & Exports (Clearance) Regulations 1998. If the CIF value is Rs. authorised dealers should ensure submission of Exchange Control Copy of Bill of Entry for home consumption in the case of imports valued at Rs.100000.5(vii) shall also extend to the service providers availing licences under this scheme. The service providers shall also be eligible for the facility of EOU/EPZ/ EHTP/STP scheme. Imports by courier are now classified on merits in the respective customs Tariff headings. import of goods through courier is permitted in accordance with the Courier Imports & Exports (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 provisions of paragraph 6. integrated circuits and layout designs. the relative Bill of Entry is required to be filed by the registered courier service. This is not regarded as baggage for the purpose of assessment of duty and clearance therof. The practice of charging a uniform duty on articles imported through courier has been discontinued. 1998.Facilities for service providers: The service providers shall be eligible for the facility of EPCG Scheme as described in Chapter 6 of EXIM Policy. software in diskettes and CDs related to their line of services as a part of passenger baggage without a licence. In case of remittances for imports through courier services. including of fice and other equipment required for their own professional use. designs. If the CIF value of the consignment imported does not exceed Rs. Import through Courier As laid down by the current Exim Policy. importers are to file separate B/E as in the case of other imports.100000 or more. Imports without Forex remittances: .

Import for personal use Importers under this category do not need any IEC number. Foodstuffs and Medicines by Charitable organisations are als o allowed. Import of food parcels. However. Import of Medical Equipment by Indian Doctors and Professionals is allowed under the Baggage Rules. Also import of equipments. raw-films etc. 100 000 per annum is allowed for personal consumption of foreign citizens.g. Import of exhibits including construction and decorative materials required for the temporary stands of the foreign exhibitors at the exhibitions. 2000 can also be imported through Post or otherwise for personal use. National Defense Fund is allowed. by foreign publicists like Radio. are allowed. Press. except alcohol and tobacco.i. those goods shall be deemed to be regarded as prohibited goods under the Customs Act. Television teams are allowed. for any tourist.Imports not involving foreign exchange remittance is allowed as given below( vide Para 5.f. 1994. value shall not exceed Rs. 1962. Import of free gifts and relief supplies by certain organisations/institutions e. Films. Goods as Baggage by Foreign Mountaineering Expedition Teams and Painting and other Display Articles. Othe rwise. quinine of more than 500 tablets or = pounds powder or 100 ampules is not permissible. 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. Indian Red Cross Society.41 of the Handbook of Procedures): Import of items by United Nations 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. Any type of goods for which the c. provided they are no t: . except consumables. Also. subject to a limit of Rs. articles of high value whose re-export is obligatory under the Baggage Rules shall be re-exported on his leaving India. Import of goods by any person as passenger baggage is permitted to the extent admissible under the Baggage Rules 1994.

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

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