Expanding your business in India is one of the best decisions you can make as its expanding market offers many business opportunities; however, the customs clearance process in India is highly complex and can be a hurdle to sustained operations. That is why it is important that you partner with custom agents in India who will help you navigate the complex customs processes
Overview Of Customs Clearance Process in India
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Obtain IEC
If you wish to import goods into India, you first need to obtain an IEC i.e, the Importer Exporter code from the Directorate General of Foreign Trade. You will need to submit certain documents such as proof of establishment, address, and bank account for this.
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Ensure Legal Compliance
After obtaining the IEC, you are free to import any product into India if it falls under the Customs Act, Foreign Trade Act and the Foreign Trade Policy 2023.
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Procure Import Licenses
The next step in the import procedure is obtaining the necessary import licenses. To know whether your product needs a license, you must classify it by identifying its ITC clarification.
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File Bill of Entry and Other Documents
After obtaining the import licenses, you will need to furnish the import declaration in the bill of entry and your PAN-based Business Identification Number (BIN)
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Determine The Import Duty Rates
The final step in the customs procedure is determining the import duty rates. These rates are specified within the first schedule of the Customs Tariff Act 1975. The Indian government also levies additional duties which you be informed about. Once the duties are paid, the goods are cleared for delivery to the importer.
Documentation Required for Customs Clearance
Commercial invoice: Contains information about the product like its type, quantity, value and terms of sale.
Packing List: Specifies the contents of each package or container and its total weight, dimensions, and markings.
Bill of Lading/Airway Bill: Issued by the carrier during confirmation of the arrival of goods for transportation
Import License: Certain goods may require import licenses or permits from the relevant authorities for clearance.
Certificate of Origin: Certifies the country of origin of the imported goods and whether it is eligible for preferential tariff treatment under certain trade agreements.
What Are Import Duties in India?
Import duties are taxes imposed by the Indian government on imported goods. They serve multiple purposes, such as revenue generation, protection of domestic industries, and regulation of imports.
Types Of Duties Levied in India
The three types of import duties levied in India include basic customs duty (BCD), additional customs duty (ACD), and integrated goods and services tax (IGST).
Basic Custom Duty: A type of import duty, levied on the assessable value of imported goods that have arrived on the customs border of India.
Additional Customs Duty: Also known as countervailing duty (CVD) it is imposed on imported goods to counterbalance any excise duty imposed on similar goods produced within the country. Its main purpose is to promote fair trade and competition within the country
National Calamity Contingent Duty: Imposed on goods harmful for health like tobacco and pan masala. The rate can range anywhere between 10-45%
Anti-dumping Duty: Levied to prevent dumping i.e, import prices that are much lower than the actual price
Understanding import duties and customs clearance procedures is essential for your business to succeed, especially if you are engaged in international trade. By working with a custom clearance agent in Mumbai, you can mitigate any risks and capitalize on the opportunities presented by India’s dynamic market.
Looking to streamline your import process and ensure compliance with Indian customs regulations? Contact LAC Relocations, the best custom agents in India. Their experienced representatives will assist you in navigating the complexities of importing goods into India, allowing you to focus on growing your business.
