The imported goods before clearance for home consumption or for warehousing are required to comply with prescribed Customs clearance formalities. All these formalities have to be completed at the Customs station (Sea Port / Airpot / Land Customs)
The importer is supposed to file a Bill of Entry for home consumption or for warehousing.
It necessarily involves two functions:
- Assessment by Appraisers
- Examination by Examiners
Both the Appraisers and Examiners are Customs officials and are placed under Assistant Commissioner.
Supporting Documents for Import Clearance:
- Signed invoice
- Packing list
- Bill of Lading or Delivery Order/Airway Bill
- GATT (General Agreement on Tariff and Trade) declaration form duly filled in
- License wherever necessary
- Letter of Credit/Bank Draft/wherever necessary
- Insurance document
- Import license
- Industrial License, if required
- Test report in case of chemicals
- Catalog, Technical write up, Literature in case of machinery, spares or chemicals as may be applicable
- Separately split up value of spares, components machinery
- Certificate of Origin, if preferential rate of duty is claimed
Functions of Appraisers:
After filing the Bill of entry along with other relevant documents, the appraiser takes up the scrutiny of these documents. The basic function of the appraiser is
- Scrutiny of the documents presented
- Appraisement of value or to determine the value of the goods
- Determine the rate of duty liable taking into consideration any exemptions or benefits claimed under different Export promotion schemes
- to check the import permissibility in terms of the Foreign Trade Policy and any other laws regulating imports.
If the appraiser is satisfied with the documents, he passes the Bill of Entry by putting his signature on it. The Bill of Entry is countersigned by the Assistant Commissioner of Customs if the value of the goods is more than Rs. 1 lac.
The Bill of entry is then sent to completist (collector) who calculate the duty amount taking into account the rate of exchange.
Payment of Customs Duties:
The customs duties are to be paid at the designated banks through TR 6 challans or bank draft.
In a majority of cases, the appraiser assesses the goods and completes the assessment on the basis of details furnished by the importer on the Bill of Entry and other related documents and he allows payment of duty and delivery of goods which is called as the “Second Check System Appraisement”. In this method, the customs duties as determined and calculated are paid in the Customs house and the importer after paying the duty gets the goods examined at the docks by the examining staff.
First Check System:
After filing Bill of Entry with customs which is the prime and legal document to file to complete import customs procedures, you can approach customs authorities for permission of ‘first check procedure’. Once you obtained permission for first check procedures, you will be permitted to draw samples of goods shipped by your foreign buyer as well as to arrange a surveyor to survey the goods. You can satisfy yourself with the quality and quantity of goods supplied by the exporter. If quality meets your requirement, you can continue to complete import customs procedures and formalities to take delivery of goods.
If you have any dispute in quality, you can suspend in completing further import clearance procedures and formalities to take delivery of goods. You can inform your overseas buyer in this regard and you can stop proceeding further with completing customs procedures and formalities. Either you can reject the cargo or you can demand compensation with the overseas shipper based on your business relationship with your overseas supplier.
Examination of Goods:
A part of the consignment is selected on a random basis and is examined by the Dock examiner / Shed appraiser. Examination takes place at the Docks (Import Shed). If the goods are found to be as declared and no other discrepancies/misdeclaration etc are deteced, the importer can clear the goods after the shed appraiser gives an “Out of Charge” order.
After payment of Customs duties and completion of the examination procedures, the importer can seek delivery of goods from the custodians after paying the necessary charges.
Execution of Bonds:
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.