CUSTOM ACT

Here's an overview of some key legislation and regulatory

bodies related to customs in India:

1. **Customs Act, 1962**: This is the primary legislation

governing customs procedures and duties in India. It
provides the legal framework for the levy and collection of
customs duties, regulation of imports and exports, and
prevention of smuggling.

2. **Central Board of Indirect Taxes and Customs

(CBIC)**: CBIC is the apex body responsible for
administering customs laws and policies in India. It
formulates policies and procedures related to customs,
excise, and service tax, and ensures their effective
implementation.
3. **Customs Tariff Act, 1975**: This act provides for the
classification of goods for the purpose of levy of import
and export duties. It incorporates the Harmonized System
of Nomenclature (HSN) for uniform classification of goods
internationally.

4. **Foreign Trade (Development and Regulation) Act,

1992**: This legislation empowers the government to
formulate and implement foreign trade policy and regulate
imports and exports to promote the country's trade
interests.

5. **Foreign Exchange Management Act (FEMA),

1999**: FEMA regulates foreign exchange transactions in
India. It governs various aspects of international trade,
including payments, receipts, and remittances for imports
and exports.
6. **Directorate General of Foreign Trade (DGFT)**:
DGFT is the nodal agency responsible for implementing
India's foreign trade policy. It issues licenses and
authorizations for imports and exports, administers trade
promotion schemes, and monitors foreign trade-related
matters.

7. **Customs Valuation Rules**: These rules prescribe the

methods for determining the customs value of imported
goods for assessment of duties. The valuation is based on
principles of fair market value and transparency.

8. **Customs Clearance Process**: India has a prescribed

customs clearance process for imports and exports,
including submission of documents, assessment of duties,
examination of goods, and clearance for release.
Overall, these laws and regulatory bodies play a crucial
role in facilitating international trade while ensuring
compliance with customs regulations and revenue
collection for the government. It's essential for businesses
engaged in import-export activities to understand and
adhere to these regulations to avoid penalties and ensure
smooth operations.

FEATURES OF INDIAN CUSTOM ACT

The Indian Customs Act, 1962, is a comprehensive

legislation that governs the levy and collection of customs
duties, regulation of imports and exports, and prevention of
smuggling in India. Here are some of the key features of
the Indian Customs Act:

1. **Customs Duties**: The Act provides for the

imposition and collection of customs duties on goods
imported into or exported from India. These duties include
basic customs duty, additional customs duty (commonly
known as countervailing duty or CVD), and special
additional duty (SAD).

2. **Classification and Valuation of Goods**: The Act

establishes a system for the classification and valuation of
imported and exported goods based on the Harmonized
System of Nomenclature (HSN). Customs authorities use
this system to determine the applicable customs duty rates
and assess the value of goods for duty calculation purposes.

3. **Prohibited and Restricted Goods**: The Act

empowers the government to prohibit or restrict the import
or export of certain goods deemed harmful to public health,
safety, morality, or national security. Importation or
exportation of such goods is subject to specific conditions
or outright prohibition.
4. **Customs Procedures**: The Act prescribes
procedures for the clearance of goods through customs
ports, airports, and land customs stations. It includes
provisions for the submission of customs declarations,
examination of goods, assessment of duties, and release of
goods for importation or exportation.

5. **Customs Clearance**: The Act outlines the process

by which imported and exported goods are cleared by
customs authorities. This includes the submission of
documents such as the Bill of Entry for imports and
Shipping Bill for exports, payment of duties, and physical
examination of goods, if necessary.

6. **Offences and Penalties**: The Act defines various

offences related to customs, including smuggling, evasion
of customs duties, and fraudulent practices. It prescribes
penalties, fines, and imprisonment for individuals or
entities found guilty of such offences.

7. **Adjudication and Appeals**: The Act establishes

adjudicating authorities to adjudicate customs-related
disputes and appeals mechanisms for aggrieved parties to
challenge decisions of customs authorities. This includes
appeals to higher authorities within the customs
department and appellate tribunals.

8. **Customs Tariff Act**: The Customs Act works in

conjunction with the Customs Tariff Act, 1975, which
provides for the classification of goods and determination
of customs duty rates. The two acts together form the legal
framework for customs duties and tariffs in India.
9. **Facilitation of Trade**: While the Act enforces
customs regulations, it also aims to facilitate legitimate
trade by providing for special procedures, exemptions, and
incentives for certain categories of goods or
importers/exporters. This includes provisions for duty
drawback, export promotion schemes, and special
economic zones.

10. **International Trade Agreements**: The Act enables

the government to enter into trade agreements and treaties
with other countries to regulate customs duties and
promote trade relations. India is a signatory to various
bilateral and multilateral trade agreements that influence
customs policies and procedures.

These are some of the key features of the Indian Customs

Act, which plays a crucial role in regulating international
trade and ensuring compliance with customs laws and
regulations in India.

IMPORTANT DEFINITIONS IN CUSTOM ACT

The Customs Act of India, 1962, provides numerous

definitions that are crucial for understanding its provisions
and regulations. Here are some important definitions as per
the Customs Act:

1. **Customs Area**: Any area of land or water that is

appointed or approved by the Central Government for the
purpose of customs.

2. **Customs Station**: Any customs port, customs

airport, or land customs station appointed under the Act.
3. **Customs Port**: Any port appointed under the Act for
the unloading of imported goods and the loading of export
goods.

4. **Customs Airport**: Any airport appointed under the

Act for the unloading of imported goods and the loading of
export goods.

5. **Goods**: Includes vessels, aircraft, and vehicles.

6. **Import**: Bringing goods into India from a place

outside India.

7. **Export**: Taking goods out of India to a place outside

India.
8. **Prohibited Goods**: Goods, the import or export of
which is subject to prohibition under the Act or any other
law in force.

9. **Dutiable Goods**: Goods subject to duty under the

Act.

10. **Baggage**: All goods including unaccompanied

baggage imported by a passenger or a crew in the course of
his or her journey.

11. **Smuggling**: Importing or exporting goods in

contravention of the provisions of the Act or any other law
for the time being in force.

12. **Customs Duty**: Duty payable under the Act or any

other law for the time being in force.
These definitions form the foundation of various
provisions within the Customs Act and are essential for
understanding the legal framework governing customs
procedures, duties, and enforcement in India. It's crucial for
individuals and businesses engaged in international trade
to familiarize themselves with these definitions to ensure
compliance with customs regulations.

BAGGAGE RULES

The Customs Act of India contains provisions regarding

the regulation of baggage brought into or taken out of India
by passengers. These rules are essential for travelers to
understand to ensure compliance with customs regulations.
Here's an overview of the baggage rules as per the Customs
Act:
1. **Definition of Baggage**: The Customs Act defines
baggage as all goods, including unaccompanied baggage,
imported by a passenger or a crew member in the course of
their journey. Baggage can include personal effects, goods
for personal use, and articles intended as gifts.

2. **Duty-Free Allowances**: The Act specifies duty-free

allowances for certain categories of goods brought into
India as part of baggage. These allowances may vary
depending on factors such as the duration of stay abroad
and the mode of travel (air, sea, land).

3. **Exemptions**: Certain goods may be exempted from

customs duty or may be subject to concessional rates of
duty if they fall within specified limits or categories. These
exemptions are often provided for personal effects and
items of nominal value.
4. **Declaration Requirements**: Passengers are required
to make a declaration to the customs authorities regarding
the contents of their baggage, including any dutiable or
prohibited goods. Failure to declare goods accurately can
result in penalties or confiscation.

5. **Red Channel/Green Channel**: Airports and other

points of entry typically have separate channels for
passengers to declare or bypass customs inspection. The
Red Channel is for passengers carrying dutiable or
prohibited goods who need to declare them to customs
authorities, while the Green Channel is for passengers with
no dutiable goods.

6. **Prohibited and Restricted Items**: Certain goods are

prohibited or restricted from being imported or exported
under the Customs Act and other relevant laws. Passengers
must be aware of these restrictions to avoid legal
consequences.

7. **Examination of Baggage**: Customs authorities have

the right to examine baggage to ensure compliance with
customs regulations. Baggage may be subject to physical
inspection or screening using x-ray machines.

8. **Penalties and Seizure**: Non-compliance with

baggage rules, including failure to declare dutiable goods
or attempting to smuggle prohibited items, can result in
penalties, fines, or confiscation of goods.

These are some of the key provisions regarding baggage

rules under the Customs Act of India. Travelers should
familiarize themselves with these rules before embarking
on international journeys to ensure smooth customs
clearance and avoid legal issues. It's also advisable to check
for any updates or amendments to the regulations before
traveling, as rules may change over time.

IMPORT PROCEDURE

The import procedure in India, as governed by the Customs

Act, involves several steps and compliance requirements to
ensure smooth and lawful importation of goods. Here's an
overview of the import procedure as per the Indian
Customs Act:

1. **Importer Registration**: Importers need to obtain an

Importer-Exporter Code (IEC) from the Directorate
General of Foreign Trade (DGFT) before importing goods
into India. The IEC is a 10-digit code required for customs
clearance and other import-export transactions.
2. **Classification of Goods**: Importers must classify the
goods they intend to import according to the Harmonized
System of Nomenclature (HSN) code, which determines
the applicable customs duty rates and regulatory
requirements.

3. **Preparation of Import Documents**: Importers need

to prepare and submit various documents for customs
clearance, including:

- Bill of Entry: A document declaring the details of

imported goods, including their description, quantity,
value, and classification.

- Commercial Invoice: An invoice issued by the seller

providing details of the transaction, including the
description and value of the goods.

- Packing List: A document detailing the contents,

quantities, and packaging of the imported goods.
 - Import License or Authorizations: If required for
specific goods or categories, import licenses or
authorizations need to be obtained from relevant
authorities.

4. **Payment of Customs Duty**: Importers are required

to pay customs duties applicable to the imported goods
based on their classification and value. Customs duty rates
may vary depending on factors such as the nature of goods,
country of origin, and applicable trade agreements.

5. **Customs Clearance**: The imported goods must

undergo customs clearance procedures upon arrival at the
customs port or airport. This involves submission of the
Bill of Entry and other required documents to the customs
authorities for assessment of duties and examination of
goods.
6. **Examination of Goods**: Customs authorities may
physically examine the imported goods to verify their
description, quantity, and value. Goods may also be subject
to inspection for compliance with safety, quality, and
regulatory standards.

7. **Release of Goods**: Once customs duties are paid,

and all clearance procedures are completed, the customs
authorities issue a Customs Clearance Certificate, and the
imported goods are released for onward delivery to the
importer.

8. **Post-Clearance Compliance**: Importers are

responsible for complying with post-clearance
requirements, such as filing of periodic returns,
maintaining records, and adherence to applicable
regulations governing imported goods.

9. **Special Procedures**: Certain goods may be eligible

for special import procedures or concessions, such as duty
drawback, warehousing, or duty-free import under specific
schemes or agreements.

It's essential for importers to adhere to the provisions of the

Customs Act and other relevant laws and regulations
governing importation to avoid delays, penalties, or legal
consequences. Additionally, engaging the services of
customs brokers or consultants can help navigate the
complexities of import procedures and ensure compliance
with customs requirements.

EXPORT PROCUDURE
The export procedure in India, as governed by the Customs
Act, involves several steps and compliance requirements to
ensure lawful exportation of goods. Here's an overview of
the export procedure as per the Indian Customs Act:

1. **Exporter Registration**: Exporters need to obtain an

Importer-Exporter Code (IEC) from the Directorate
General of Foreign Trade (DGFT) before exporting goods
from India. The IEC is a 10-digit code required for customs
clearance and other export transactions.

2. **Classification of Goods**: Exporters must classify the

goods they intend to export according to the Harmonized
System of Nomenclature (HSN) code, which determines
the applicable customs duty rates and regulatory
requirements.
3. **Preparation of Export Documents**: Exporters need
to prepare and submit various documents for customs
clearance and shipment of goods, including:

- Shipping Bill: A document declaring the details of

exported goods, including their description, quantity,
value, and classification.

- Commercial Invoice: An invoice issued by the seller

providing details of the transaction, including the
description and value of the goods.

- Packing List: A document detailing the contents,

quantities, and packaging of the exported goods.

- Export License or Authorizations: If required for

specific goods or categories, export licenses or
authorizations need to be obtained from relevant
authorities.
4. **Payment of Export Duties (if applicable)**: Certain
goods may be subject to export duties based on their
classification and value. Exporters are required to pay
applicable export duties, if any, before shipping the goods.

5. **Customs Clearance**: The exported goods must

undergo customs clearance procedures before shipment.
This involves submission of the Shipping Bill and other
required documents to the customs authorities for
assessment of duties and examination of goods.

6. **Examination of Goods**: Customs authorities may

physically examine the exported goods to verify their
description, quantity, and value. Goods may also be subject
to inspection for compliance with export regulations and
quality standards.
7. **Issuance of Shipping Documents**: Once customs
clearance is obtained, the customs authorities issue
necessary shipping documents, including the Shipping Bill
and Export Declaration Form (EDF), which are required
for the shipment of goods.

8. **Transportation and Shipment**: After obtaining the

necessary shipping documents, the goods are transported to
the port of export and loaded onto the exporting vessel or
aircraft for shipment to the destination country.

9. **Post-Shipment Compliance**: Exporters are

responsible for complying with post-shipment
requirements, such as filing of export declarations,
submission of export proceeds, and maintenance of export
records as per regulatory requirements.
10. **Special Procedures**: Certain goods may be eligible
for special export procedures or incentives, such as duty
drawback, export promotion schemes, or duty-free export
under specific schemes or agreements.

It's essential for exporters to adhere to the provisions of the

Customs Act and other relevant laws and regulations
governing exportation to ensure compliance and avoid
delays, penalties, or legal consequences. Additionally,
exporters may benefit from engaging the services of
customs brokers or consultants to navigate the
complexities of export procedures and ensure smooth
customs clearance.

EXEMPTION AVAILABLE IN CUSTOM ACT

The Customs Act of India provides for various exemptions

from customs duty for certain categories of goods,
importers, and specific circumstances. These exemptions
are aimed at promoting trade, facilitating imports for
specific purposes, and encouraging certain industries. Here
are some common exemptions available under the Customs
Act:

1. **Personal Effects**: Importers may be allowed to

import personal effects such as clothing, jewelry, and
personal electronics duty-free under certain conditions,
especially if they are returning residents or non-residents
arriving in India for a specific duration.

2. **Gifts and Samples**: Certain gifts and samples may

be exempt from customs duty, subject to specified
conditions such as value limits and frequency of
importation. Gifts received from abroad up to a certain
value may be exempt from duty.
3. **Baggage Allowance**: Travelers may be entitled to a
duty-free allowance for goods accompanying them as
baggage, subject to specified limits and conditions.

4. **Import for Diplomatic Missions and Personnel**:

Goods imported by diplomatic missions and personnel
accredited to foreign diplomatic missions in India may be
exempt from customs duty under diplomatic privileges and
immunities.

5. **Import for Charitable Purposes**: Goods imported for

charitable purposes or for relief work may be eligible for
duty exemption, subject to approval from relevant
government authorities.

6. **Import for Scientific or Educational Institutions**:

Goods imported by recognized scientific or educational
institutions for research, education, or training purposes
may be eligible for customs duty exemption.

7. **Import of Capital Goods**: Machinery, equipment,

and raw materials imported for use in specified industries
or for setting up new industrial units may be eligible for
duty exemptions or concessions under government
schemes such as Advance Authorization or Export
Promotion Capital Goods (EPCG) Scheme.

8. **Import for Export Promotion**: Goods imported for

the purpose of export promotion, such as raw materials
used in export-oriented production or goods for packaging,
labeling, or processing for export, may be eligible for duty
exemption or drawback.
9. **Import under Free Trade Agreements (FTAs)**:
Goods imported from countries with which India has
signed free trade agreements may be eligible for
preferential duty rates or duty exemptions, subject to
compliance with rules of origin and other conditions
specified in the respective agreements.

10. **Import for Defense and Security**: Certain imports

for defense and security purposes, such as military
equipment and supplies, may be exempt from customs duty
under specific provisions for defense procurement or
national security.

It's important to note that eligibility for customs duty

exemptions depends on various factors such as the nature
of goods, purpose of importation, importer's status, and
compliance with relevant regulations and procedures.
Importers should carefully review the applicable
exemptions and comply with all requirements to avail of
the benefits without encountering any legal issues.