customs clearance of imported goods

8/9/2019 Customs Clearance of Imported Goods

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Customs Clearance of imported goods

Custom Authorities

Under the ministry of finance(Department of Revenue), there are two independent Boards of

revenue viz., Central Board of Direct Taxes (for Income Tax, Wealth Tax etc) and Central Boardof Excise and Customs(CBEC)

The customs administration vests in CBEC for implementing the provisions of the Customs

Act.1962. There are two main wings of Customs House. In the 'Appraisement' wing the job of

collection of revenue is assigned, while the 'Preventive' one aims at prevention of smuggling.

The board is headed by a Chairman and assisted by Members.

Central Board of Excise & Customs (CBEC) in the MoF

Under which operates:Customs Commissionerates of Mumbai, Calcutta, Chennai, Kandla,

Bangalore, Cochin, Delhi, Vizag, Goa and Tuticorin.

Directorate of DrawbackField Level:Principal Commissioners Customs ,Commissioners,Addl. Commissioners ,Dy.

Commissioners,Asst. Commissioners,Port of clearance.

Customs Clearance of imported goods

Customs Authorities and the Clearing agents play the key role in the import of goods. All goodsimported into India have to pass through the procedure of Customs clearance as they cross Indian

border. The goods are examined, appraised, assessed, evaluated and then allowed to be taken out

of charge of the Customs for use by the importer. The entire process of customs clearance iscomplex and to carry out this procedure smoothly, the help of accredited customs clearing agents

has to be taken.

The importers need to present a Bill of Entry on receipt of the advise of the arrival of the vessel.

The B/E is noted in Import Department, with corresponding endorsement made against theconsignment entry in the IGM (Import General Manifest) along with the date. The B/E will then

be presented in the Appraising Department with all the relevant documents like invoice, Bill of

Lading, Import license and catalogue literature. The appraising procedure may be of two types.

The First Check Procedure-Applicable only when appraisers/assessing group finds it difficult tocomplete the assessment on the basis of the documents made available.

The Scrutinising Appraiser in the group gives the examination order. The goods are then

examined in the docks and the B/E rerutned to the Scrutinising Appraiser for completion and

license debit. In this case the Customs 'out of charge' is given by the Accounts Department soonafter the recovery of duty.

The Second Check Procedure-Under this 80 to 90 percent of the consignments are cleared.

If the documents are adequate for determining the classification, value, ITC license, the form is

completed by the Appraiser and then countersigned by The Assistant Collector. It is then

forwarded to the License Department for licensing debit and audit. Then it is returned to theimporters for payment of duty in the Accounts/Cash department. 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 docks.


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In the docks, the Shed Appraiser/Examiner shall examine the goods and if in order, shall give the

out of charge for taking delivery from the custodian of the goods viz. Port Trust, after payment

of Port Trust charges.

Irrespective of the procedure, examination of cargo for assessment purpose is chiefly thefunction of the Appraising Department having special staff of examiners in the docks/Air cargo

shed. The records of the examination and weighment should be declared, attested and dated atthe time of the examination. If the examination spreads over more than one day, the result oneach 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.

Classification of Customs tariff

The basic legislation is the Indian Customs Act, 1962 read with Customs Tariff Act, 1975.

Section 12 of the Customs Act,'62 empowers levy of duties on goods imported into or exported

from India.

However, the rates at which the different import export duties shall be leviable have beenrespectively specified in the First and Second Schedule to the Customs Tariff Act, 1975-called

the import Tariff and Export Tariff respectively.

With effect from Feb. 28, 1986, the new tariff import schedule based on international convention

of Harmonised Commodity and Coding system, commonly known as Harmonised CodingSystem came into being. The basic features of the Import Tariff

Mode of Levy of Customs duties:-

Customs duties are levied in three ways-

Specific rate - at the rate prescribed per unit of item i.e. weight or number of length;

Ad-valorem duty - levied on the value of the item;

Specific and advalorem - levied in both ways.

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. This Schedule is amended from time to time of Customs

Tariff Act. This duty can be levied either as a percentage of value of goods or at aspecified rate.

Surcharge: It is levied at the rate of 10% of the basic rate on all commodities except

crude oil and petroleum products, GATT-bound items, gold and silver.

Additional Duty: Also known as countervailing duty, is levied on the cost of imported

goods and is equal to excise duty levied on like goods when manufactured in India. Theobjective is to ensure that the protection provided by the import duty to domestic industry

is not eroded.

Special Additional Duty: It is levied at the rate of 4%. Anti-dumping Duty: This is leviedon specified goods imported from specified countries to protect indigenous industry from

injury resulting from USA, Korea and so on.


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Customs Duty Assessment: The assessment of goods to duty is done on the basis Whether the

goods covered by the B/E are such as are regularly imported, or are required to be tested by the

customs house laboratory for fulfilment of license conditions, or The appeaiser desires to see therepresentative sample before completing the bill of entry for the purpose of verification of the

value/description, etc. or The required document is not forthcoming.

Customs Duty Rates: When the import invoice is in any currency other than Indian rupees,customs fix the exchange rate for conversion into the Indian rupees at a predetermined ratewhich is published in customs houses on a daily basis.

Imports from specified countries enjoy preferential duty. This is generally the result of special

status accepted under bilateral trade agreements or otherwise. However, 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 dutyunder the Customs Tariff Act + Surcharge thereon + Additional duty + Special Additional duty

as per Finance Act).

Example:-

Landed cost including CIF of Hinges of Brass Rs. 1, 00,000

Basic customs duty under the Customs Tariff Act, say 30% Rs.30, 000

Rs. 1, 30,000

+ Additional duty as per Finance Act, say 16% Rs. 20,800

Rs.1, 50,800

+Special Additional Duty @4% Rs. 6,032

Rs. 1, 56,832

Total duty payable = 1, 56,832 - 1, 00, 00 i.e., Rs. 56,832

Getting Import License checked-The appraising official checks the license for their description,

value, validity period, importers name, etc. It is for the importer to establish that the goodssatisfied the description in the license unless he is able to establish the fact he would not be

entitled to lawful import thereof. If the appraising official is satisfied that the license is in order,

he will send the license with B/E to license section for registration and audit. The departmentmaintains a register for every license accepted and debited showing the last balance on the

license.

The importer is likely to know the term of license, the type of goods and whether they can be

lawfully imported as per the terms of the license. In case there is any error on the part of theappraising 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.

Bill of Entry-

This is a document on the strength of which clearance of imported goods can be effected. Its

form has been standardised by the Central Board of Excise and Customs. All goods discharrgedfrom a vessel, from foreign or coastal Ports, are cleared on this prescribed forms presented under

the B/E Regulations, 1971.


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Types of Bill of Entry:

1. Goods entered for home consumption are cleared on White Bill of Entry.

2. Goods entered for warehousing are removed into bond on Into Bond Bill of Entry

(Yellow Bill of Entry)

3. Goods cleared ex-bond for home consumption on payment of duty on Ex-Bond Bill ofEntry (Green Bill of Entry)

It should be presented for 'noting' in the import dept. of the customs house after the import

General Manifest which gives a detailed description item wise of the goods brought by the

concerned vessel is filed by the steamer Agent.

customs clearance of imported goods

Documents