Import Procedures & Documentation

Harikrishnan. M
Meaning - Import Trade
 Import trade refers to the purchase of goods from a foreign country.
 The procedure for import trade differs from country to country depending upon the
import policy, statutory requirements and customs policies of different countries.
 In almost all countries of the world import trade is controlled by the government.
 The objectives of these controls are proper use of foreign exchange restrictions,
protection of indigenous industries etc.
 Steps Involved in Import of Goods
 Trade Enquiry
 Procurement of Import License & Quota - For the purpose of issuing license, the importers are divided into three
categories:
a) Established importer,
b) Actual users, and
c) Registered exporters, i.e., those import under any of the export promotion schemes.

 Obtaining Foreign Exchange

 Placing the Indent or Order
 Despatching the Letter of Credit
 Obtaining necessary documents - There are two types of documentary bills:
a) D/P, D.P. (or Documents against payment) bills.
b) D/A, D.A. (or Document against acceptance) bills.

 Customs formalities & clearance of goods

 Making the Payment
 Closing the Transaction
 Import Procedure in the Customs
 Conveyances to call only at Notified Customs Ports / Airports:
 Customs Act, 1962, envisages that only places notified by the Government shall be Customs ports
or Customs airports for the unloading of imported goods and loading of export goods.
 At each such customs ports, the Commissioner of Customs is empowered to approve proper places
for the unloading and loading of goods and he also specifies the limits of any Customs area.
 The law further provides that the person in charge of the vessel or an aircraft shall not call or land
at any place other than the Customs port/airport, except in cases of emergencies.
 Power to board conveyance, to question and to demand documents:
 Section 37 empowers the proper officer to board any conveyance carrying imported goods or
export goods. He may remain on board as long as he decides to remain. The proper officer may
question the person in charge of the vessel or aircraft. He may demand production of documents
and also ask questions, to be answered by such person. The person in charge of the conveyance is
bound to comply with these requirements [Section 38].
 Delivery of Import Manifest:
 The Master / Agent of the vessel or an aircraft has to deliver an import manifest (an import report
in case of a vehicle), within 24 hours after arrival in the case of a vessel and 12 hours after arrival in
the case of an aircraft or a vehicle in the prescribed form.
 The time limit for filing the manifest is extendable on showing sufficient cause. In the case of a
vessel or an aircraft, a manifest may also be filed even before arrival of the vessel or aircraft (known
as Prior Entry Manifest). In the case of vessels, for administrative convenience, such advance
manifests are accepted on any day within 14 days before the expected arrival of the vessel.
 If the vessel does not arrive within the stipulated time of 14 days or such extended time as may be
granted by the Assistant Commissioner (Imports), the manifest accepted provisionally is cancelled
and the fact circulated through public notices.
 All the Bills of Entry filed against the cancelled manifest, become void. The importers have to return
those Bills of Entry to the Import Department and to claim refund of duty, if paid on any such Bills
of Entry. If the same vessel enters the port after the cancellation of the original manifests, it will be
treated as a fresh entry and a fresh manifest is insisted upon.
 General conditions:
 A person filing declarations under this section has to declare the truthfulness of contents. This
declaration has legal consequences, which bind the carrier. [Section 30(2)].
 Amendments:
 If for any reason, the carrier desires to amend or supplement the IGM, it will be permitted by the
proper officer on payment of prescribed fees, if he is satisfied that there is no fraudulent
intention behind the move. [Section 30(3)].
 Penal Liability:
 Any mis-declaration in this document will attract the penal provisions of Section 111(f) and
Section 112. Matters such as the number of copies of manifests to be filed, nature of forms,
manner of declaring cargo etc. are governed by the following Regulations:
 Import Report (Form) Regulation, 1976;
 Import Manifest (Aircraft) Regulation, 1976; and
 Import Manifest (Vessels) Regulation, 1971.
 Generally speaking, the above Regulations stipulate declaring separately cargo to be landed,
unaccompanied Baggage, goods to be transported and same bottom or retention cargo. Separate
declarations are also to be filed in respect of dangerous/prohibited/ sensitive goods such as Arms
and Ammunitions, Narcotics, Gold etc. The prime condition in the Regulations is that the manifest
shall cover all the goods carried in the conveyance. In respect of a vessel, an import manifest
shall, in addition, consist of an application for entry inwards.
 Entry Inwards:
 The Master of the vessel is not to permit the unloading of any imported goods until an order has been
given by the proper officer granting Entry Inwards of such vessel. Normally, Entry Inwards is granted only
after the import manifest has been delivered. This entry inward date is crucial for determining the rate of
duty, as provided in section 15 of the Customs Act, 1962. Unloading of certain items like accompanied
baggage, mail bags, animals, perishables and hazardous goods are exempted from this stipulation.
 Enclosures to Import General Manifest:
 The amendment made in 1995 (w.e.f. 1-7-1995) introduces a new form for obtaining entry inwards. The
forms are designed according to IMO-FAL Convention.
 The forms have to be filed in prescribed sizes only. Host of enclosures are sought along with these forms.
This practice has its origin in other statutes such as Merchant Shipping Act, 1880. The following
declarations have, however, to be filed along-with IGM:

(a)Deck Cargo Declaration / Certificate.

(f) Port Trust "No Demand" certificate.
(g) Immigration certificate.
(b)Last port clearance copy. (h) Application for sign on/sign off of crew
(c)Amendment application (when relevant). (when relevant).
(d)Income Tax Certificate in case of Export Cargo. (i) Application for crew baggage checking
(e)Nil export cargo certificate. when they sign on (When relevant).
 Procedure for filing IGM at Custom Houses operating EDI service centers:

(i) IGM by Shipping lines:

 The shipping line/steamer agent needs to submit the manifest in prescribed form at the Service
Centre. The shipping lines are required to submit the electronic version of the Import General
manifest in floppies, containing all the details and particulars. It is to be ensured by the Shipping
Lines that all the particulars and details of the Import general manifest submitted either manually
or through floppies are correct. On arrival of the vessel, the shipping line needs to approach the
Preventive officer for granting entry inwards. Before making the application, the shipping line has to
make payment of the Light House dues.
 In case the shipping line is filing an IGM after arrival of the vessel, the procedure as mentioned
above for prior IGM, is to be followed except that the date of arrival of vessel is also indicated. After
submission, the shipping line has to approach the proper officer for grant of entry inwards in the
system.

(ii) IGM by Air:

 The airlines are required to file IGM in prescribed format. In case of Air Cargo Complexes having
EDI, the IGMs may be filed through electronic mode. The IGMs to be submitted need to contain all
details and particulars. In other words, the airlines would not only be furnishing the details of the
Master Airway Bills but also the House Airway bills in the case of console cargo. The airlines are also
to furnish the additional information, namely, the ULD Nos. for use by the custodians.
 Filing of Stores List:
 When entering any port, all ships are required to furnish to the Commissioner of Customs, a list (or nil
return) of ships stores intended for landing (excluding any consumable stores issued from any dutified shops
in.
 Retention on board of imported stores is governed by Import Store (Retention on board) Regulations, 1963.
The consumable stores can remain on board without payment of import duties during the period the
vessel/Aircraft remains foreign going. Otherwise, such consumable stores are to be kept under Customs
seal.
 Even in respect of foreign going vessels, only the stores required for immediate use of the personnel may be
left unsealed. Excessive stocks of stores such as liquor, tobacco, cigarettes, etc are kept under Customs seal.
 Unloading and Loading of Goods:
 Imported goods are not to be unloaded from the vessel until Entry Inwards is granted. No imported goods
are to be unloaded unless they are specified in the import manifest/report for being unloaded at that
Customs station. No imported goods shall be unloaded at any place other than the places provided for such
unloading.
 Further, imported goods shall not be unloaded from any conveyance except under the supervision of the
proper officer. Similarly, for unloading imported goods on any Sunday or on any holiday, prior notice shall be
given and fees prescribed in this regard shall be paid.
 Procedure for clearance of imported goods from
the Customs
 Bill of Entry - Cargo Declaration:
 Goods imported in a vessel/aircraft attract customs duty and unless these are not meant for customs
clearance at the port/airport of arrival by particular vessel/aircraft and are intended for transit by the
same vessel/aircraft or transhipment to another customs station or to any place outside India,
detailed customs clearance formalities of the landed goods have to be followed by the importers.
 In regard to the transit goods, so long as these are mentioned in import report/IGM for transit to any
place outside, Customs allows transit without payment of duty. Similarly for goods brought in by
particular vessel/aircraft for transhipment to another customs station detailed customs clearance
formalities at the port/airport of landing are not prescribed and simple transhipment procedure has
to be followed by the carrier and the concerned agencies.
 The customs clearance formalities have to be complied with by the importer after arrival of the goods
at the other customs station. There could also be cases of transhipment of the goods after unloading
to a port outside India. Here also simpler procedure for transhipment has been prescribed by
regulations, and no duty is required to be paid.
 If the goods are cleared through the EDI system, no formal Bill of Entry is filed as it is generated in the
computer system, but the importer is required to file a cargo declaration - having prescribed particulars
required for The Bill of entry, where filed, is to be submitted in a set, different copies meant for different
purposes and also given different colour scheme, and on the body of the bill of entry the purpose for
which it will be used is generally mentioned in the non-EDI declaration.
 In the non-EDI system along with the bill of entry filed by the importer or his representative the
following documents are also generally required:-

1) Signed invoice 2) Packing list 3) Bill of Lading or Delivery Order/Airway Bill

4) GATT declaration form duly filled 5) Importers/CHA’s declaration

6) License wherever necessary 7) Letter of Credit/Bank Draft/wherever necessary 8) Insurance document

9) Industrial License, if required 10) Test report - in case of chemicals

11) Ad-hoc exemption order

12) Catalogue, Technical write up, Literature in case of machineries, spares or chemicals as may be
applicable 13) Separately split up value of spares, components machineries

14) Certificate of Origin, if preferential rate of duty is claimed

15) No Commission declaration

 Assessment:
 The basic function of the assessing officer in the appraising groups is to determine the duty liability
taking due note of any exemptions or benefits claimed under different export promotion schemes.
 They have also to check whether there are any restrictions or prohibitions on the goods imported
and if they require any permission/license/permit etc., and if so whether these are forthcoming.
 Assessment of duty essentially involves proper classification of the goods imported in the customs
tariff having due regard to the rules of interpretations, chapter and sections notes etc., and
determining the duty liability.
 It also involves correct determination of value where the goods are assessable on ad valorem basis.
 The assessing officer has to take note of the invoice and other declarations submitted along with the
bill of entry to support the valuation claim, and adjudge whether the transaction value method and
the invoice value claimed for the basis of assessment is acceptable, or value needs to be
redetermined having due regard to the provisions of Section 14 and the valuation rules issued
thereunder, the case law and various instructions on the subject.
 He also takes note of the contemporaneous values and other information on valuation available with
the Custom House.
 In most cases, the appraising officer assesses the goods on the basis of information and details furnished
to the importer in the bill of entry, invoice and other related documents including catalogue, write-up
etc.
 He also determines whether the goods are permissible for import or there are any
restriction/prohibition.
 He may allow payment of duty and delivery of the goods on what is called second check / appraising
basis in case there are no restriction/prohibition .
 In this method, the duties as determined and calculated are paid in the Custom House and appropriate
order is given on the reverse of the duplicate copy of the bill of entry and the importer or his agent after
paying the duty submits the goods for examination in the import sheds in the docks etc., to the
examining staff.
 If the goods are found to be as declared and no other discrepancies/mis-declarations etc., are detected,
the importer or his agent can clear the goods after the shed appraiser gives out of charge order.
 Wherever the importer is not satisfied with the classification, rate of duty or valuation as may be
determined by the appraising officer, he can seek an assessment order.
 An appeal against the assessment order can be made to appropriate appellate authority within the time
limits and in the manner prescribed.
 EDI Assessment:

 In the EDI system of handling of the documents/declarations for taking import clearances as mentioned
earlier the cargo declaration is transferred to the assessing officer in the groups electronically.
 The assessing officer processes the cargo declaration on screen with regard to all the parameters as given
above for manual process. However in EDI system, all the calculations are done by the system itself.
 In addition, the system also supplies useful information for calculation of duty, for example, when a
particular exemption notification is accepted, the system itself gives the extent of exemption under that
notification and calculates the duty accordingly.
 Similarly, it automatically applies relevant rate of exchange in force while calculating
 After assessment, a copy of the assessed bill of entry is printed in the service center. Under EDI,
documents are normally examined at the time of examination of the goods. Final bill of entry is printed
after ‘out of charge’ is given by the Custom Officer.
 In EDI system, in certain cases, the facility of system appraisal is available. Under this process, the
declaration of importer is taken as correct and the system itself calculates duty which is paid by the
importer. In such case, no assessing officer is involved.
 Also, a facility of tele-enquiry is provided in certain major Customs stations through which the status of
documents filed through EDI systems could be ascertained through the telephone. If nay query is raised,
the same may be got printed through fax in the office of importer/exporter/CHA.
 Examination of Goods:
 All imported goods are required to be examined for verification of correctness of description given
in the bill of entry. However, a part of the consignment is selected on random selection basis and is
examined.
 In case the importer does not have complete information with him at the time of import, he may
request for examination of the goods before assessing the duty liability or, if the Customs
Appraiser/Assistant Commissioner feels the goods are required to be examined before assessment,
the goods are examined prior to assessment. This is called First Appraisement.
 The importer has to request for first check examination at the time of filing the bill of entry or at
data entry stage. The reason for seeking First Appraisement is also required to be given.
 On original copy of the bill of entry, the Customs Appraiser records the examination order and
returns the bill of entry to the importer/CHA with the direction for examination, who is to take it to
the import shed for examination of the goods in the shed. Shed Appraiser/Dock examiner examines
the goods as per examination order and records his findings.
 The goods can also be examined subsequent to assessment and payment of duty. This is called
Second Appraisement. Most of the consignments are cleared on second appraisement basis.
 It is to be noted that whole of the consignment is not examined. Only those packages which are
selected on random selection basis are examined in the shed.
 Green Channel facility:
 Some major importers have been given the green channel clearance facility. It means clearance of
goods is done without routine examination of the goods.
 They have to make a declaration in the declaration form at the time of filing of bill of entry.
 The appraisement is done as per normal procedure except that there would be no physical
examination of the goods.
 Only marks and number are to be checked in such cases.
 However, in rare cases, if there are specific doubts regarding description or quantity of the goods,
physical examination may be ordered by the senior officers/investigation wing like SIIB.
 Execution of Bonds:

Refer Circular No. 9/2007-Cus Dated 7/2/2007

 Wherever necessary, for availing duty free assessment or concessional assessment under different
schemes and notifications, execution of end use bonds with Bank Guarantee or other surety is
required to be furnished.
 These have to be executed in prescribed forms before the assessing Appraiser.
 Payment of Duty:
 The duty can be paid in the designated banks or through TR-6 challans. Different Custom Houses
have authorized different banks for payment of duty.
 It is necessary to check the name of the bank and the branch before depositing the duty.
 Bank endorses the payment particulars in challan which is submitted to the Customs.
 Specialised Schemes:
 The import of goods are made under specialised schemes like DEEC or EOU etc.
 The importer in such cases is required to execute bonds with the Customs authorities for
fulfillment of conditions of respective notifications.
 If the importer fails to fulfill the conditions, he has to pay the duty leviable on those goods. The
amount of bond would be equal to the amount of duty leviable on the imported goods. The bank
guarantee is also required along with the bond.
 However, the amount of bank guarantee depends upon the status of the importer like Super Star
Trading House/Trading House etc.
 Prior Entry for Bill of Entry:

 For faster clearance of the goods, provision has been made in section 46 of the Act, to allow filing of bill of
entry prior to arrival of goods. This bill of entry is valid if vessel/aircraft carrying the goods arrive within 30
days from the date of presentation of bill of entry.
 The importer is to file 5 copies of the bill of entry and the fifth copy is called Advance Noting copy. The
importer has to declare that the vessel/aircraft is due within 30 days and they have to present the bill of entry
for final noting as soon as the IGM is filed.
 Advance noting is available to all imports except for into bond bill of entry and also during the special period.
 Bill of Entry for Bond/Warehousing:

 A separate form of bill of entry is used for clearance of goods for warehousing. All documents as required to
be attached with a Bill of Entry for home consumption are also required to be filed with bill of entry for
warehousing.
 The bill of entry is assessed in the same manner and duty payable is determined. However, since duty is not
required to be paid at the time of warehousing of the goods, the purpose of assessing the goods at this stage
is to secure the duty in case the goods do not reach the warehouse.
 The duty is paid at the time of ex-bond clearance of goods for which an ex-bond bill of entry is filed. The rate
of duty applicable to imported goods cleared from a warehouse is the rate in-force on the date on which the
goods are actually removed from the warehouse.
Thank You
References:

• http://accmumbai.gov.in/aircargo/import/import_proced
ure.html#proc_for_clearance

• https://www.indiafilings.com/learn/export-and-import-pr
ocedure-in-india/

• https://www.yourarticlelibrary.com/export-management
/procedure-and-steps-involved-in-import-of-goods/4210
6