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Laws for Import of Goods in India

By Bhavneet Vohra July 29, 2016


Introduction

Since in the previous two articles, we have covered the laws related to the Exports and Legislations and Preliminary Registration that one needs to comply with to follow the foreign trade. In a layman’s language, Import trade is the purchase of goods from a foreign country. In this article, focus is specifically on the Import Procedure and laws related to the same.

Understanding the Import Procedure and Import duties

What are the different types of Import duties?

It is very important for every exporter to understand the different types of duties that are imposed for the different kinds of articles manufactured in different countries across the world.

The duty that is charged on the importation of goods into India and exportation of goods to the countries outside India is known as the Exports Duty. The duties can be imposed because of the authorization of the Section 12 of the Customs Tariffs Act, 1975.

Different kinds of Import Duties are as follows:

  1. Basic Customs Duty- It is listed in the first schedule of the Custom Tariffs Act, 1975. To get the full details following link can be accessed: http://www.cbec.gov.in/htdocs-cbec/customs/cs-tariff2015-16/cst2015-16-idx
  2. Additional duty- It is usually imposed to make the price of imported goods at par with the price of the domestic goods produced in our country. (Section 3 of Customs Tariff Act, 1975)
  3. Special Additional Customs duty- In some cases, Central Government often place a tax equivalent to the VAT (Value Added Tax)  and any local tax that can also be imposed.( Section 3A of the Customs Tariff Act, 1975)
  4. Anti- Dumping duty- When the price of the article imported comes out to be less than the normal sale price of that particular product in our country. So to reduce the difference and bring it at with the par with the price of the domestic country, this duty can be imposed.(Section 9A, Customs Tariff Act 1975)
  5. Safeguards Duty- Some goods can cause serious injury and can be threatening to the domestic industry, in that regard, such duty can be imposed.(Section 8B of the Customs Tariff Act, 1975)

How the Import Duty is calculated?

By taking reference from the Schedule 1 of the Customs Tariffs Act, 1975 the import duties on different products can be calculated. In this particular schedule, the import duties on articles are listed in the form of Harmonized System of International Tariff Classification which is an 8 digit code.

There is another easy and alternate way to calculate the import duty on various articles. Online Custom duty calculator can be taken for help to do the same. To access the calculator following link can be accessed: https://www.icegate.gov.in/Webappl/index_imp.jsp

What are the basic requirements for the Import of Goods?

There are certain requirements that every Importer needs to follow in order to Import goods from the other country, which area as follows:

An IEC (Import- Export Code Number) needs to be obtained. One more thing also needs to be ensured that every good that is to be imported into the country shall be in conformity with Section 11 of the Customs Act, 1962, Foreign Trade (Development and Regulation), 1992 along with the Foreign Trade Policy for the particular term like for current it is FTP (2015-2020).

What are the steps involved in the Import of Goods?

Step 1: To present a Bill of Entry and Import General Manifest (IGM) to the Superintendent or Appraiser

As per the Section 30 of the Customs Act 1962, IGM is a document that needs to be filed in prescribed form with the Customs by the carrier of goods which includes Streamliner or Airlines.

On the other hand Bill of Entry is a certificate that is delivered by the importer to the Custom Authorities giving specified details and particulars about the imported goods and the place of import.

There are generally 3 kinds of bill of exchange which are as follows:

  • Home consumption Bill of entry
  • Into bond Bill of entry
  • Ex- Bond Bill of Entry

Step 2: The second step involves to Self-Assessment and Verification

As per the modification in the Finance Act, 2011 a Self-Assessment Procedure has been established where the Importer on the basis of self-assessment only files the Bill of Entry in the electronic form.

Step 3: To execute the necessary bonds and guarantees

The third step in this chain involves the execution of necessary bonds and guarantees.

Step 4: To make the payment of the Duty Imposed

After performing the above three steps, the fourth step involves the payment of duty that must be paid after its assessment. Within 5 days the duty must be paid, otherwise it may lead to the payment of interest levied by the Central Government which can vary between 10%-36%.

Step 5: Examination of the Goods

After performing the above stated steps, the Authorized Officer in the Custom Authorities undertakes the examination of the goods to ensure that the goods imported are not Prohibited Goods (To access the list of the Prohibited items the following link can be accessed by clicking on the right tab of “Prohibited Items” under Policies: http://dgft.gov.in/) and the importer has paid the appropriate duty. Then an Out of Customs Charge order is issued in case of Imports.

Conclusion

The above article covers almost the main aspects and steps related to the Import Procedure in India and the laws related to the same. One thing must be noted that it is necessary for every importer to obtain the Import License for importing goods. To see the fees related to the same refer to the Schedule of FOREIGN TRADE (REGULATION) RULES, 1993 by following this link: http://dgft.gov.in/exim/2000/download/Appe&ANF/38C.pdf .

Sources:

http://dgft.gov.in/exim/2000/Updated_FTP_2015-2020.pdf (Foreign Trade Policy 2015-2020)

http://dgft.gov.in/exim/2000/FTPproc2015-20E.pdf (Handbook of Procedures)

http://www.indiantradeportal.in/vs.jsp?lang=0&id=0,55,279

http://kalyan-city.blogspot.in/2011/03/how-to-import-goods-in-india-procedure.html

Author- Bhavneet Singh Vohra

Vivekananda Institute of Professional Studies

 

 

 

Tags: Laws for Import of Goods in India , different types of Import duties , Understanding the Import Procedure and Import duties , Basic Customs Duty , Additional duty , Special Additional Customs duty , Anti- Dumping duty , Safeguards Duty , Import Duty calculation , basic requirements for the Import of Goods , steps involved in the Import of Goods


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