Step by Step Guide on Imports process - Finance Ppl

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Step by Step Guide on Imports process

Following are the steps involved in import procedure

  1. Obtain registration and license:

    2. Importer has to apply to DGFT for getting registration and required license.

    1. Obtain IEC:

      2. Prior to importing from India, every business must first obtain an Import Export Code (IEC) number from DGFT. It is a unique 10-digit alpha numeric code with lifetime validity which is required for export import clearance.
      Upon introduction of GST, IEC number is the same as the PAN of the firm.
      Note: PAN is not IEC by default, as the IEC would be separately issued by DGFT after applying for it.

      The process to obtain the IEC registration is completely online. An application for IE is filed online in DGFT portal through form ANF 2A, on payment of application fee of Rs. 500/- along with requisite documents as mentioned in the application form. The Code will be issued in 15 working days.
      The IEC does not require filing of any returns but note that the IEC holder must do an electronic verification between April and June of every year to prevent it from being deactivated.

    2. Obtain import license

      3. Certain goods can be imported freely, while others require licensing. Importer to refer Export-Import policy to determine whether the goods to be imported, requires import licensing. If so, importer must obtain an import license.
      Import license is a document issued by DGFT authorizing the import of certain goods into the territory and are to submitted along with other import documents during import clearance of shipments. They are valid for 24 months for capital goods or 12 months for raw materials components, consumables, and spare parts and have to be renewed periodically.
      An import license may be general or specific. A general license allows imports from any country. But a specific license allows imports from a specific country only.

    3. Tariff Rate Quotas:
      4. Under TRQ, the importer can import specified products upto specified quantity at nil or reduced import duty. Most of eligible products under TRQ are in agriculture sector.importers applying for TRQ shall be issued TRQ authorisation electronically by the DGFT and transmitted to ICES system.
  2. Arrangements before importing

    3. In order to arrange fund for the settling the import transaction, the importer shall forward through his bank, the application for release of requisite foreign exchange, to Exchange Control Department of RBI.
    On receipt of application, ECD scrutinizes the application and if found valid, sanctions the foreign exchange for that particular transaction.

    The importer shall also arrange for Letter of credit in favour of the international supplier. LC is an arrangement where the importer's bank gives an undertaking stating that payment will be released to the exporter if the agreed terms and required documents are presented to the bank.

    Importer has to arrange for finance in advance to avoid incurring demurrages on imported goods that are lying uncleared at the port due to lack of payments.

    The importer can either take responsibility for clearing on his own or make arrangements for clearing and forwarding agents to take care of customs related formalities and clearing the goods from customs.

  3. Receipt of Shipment advice and import documents from the Supplier.

    4. The supplier, after loading the goods onto the ship/vessel, sends shipping advice to the importer. Shipment advice contains bill of lading/airways bill number and date, vessel name with date, port of origin, invoice number, quantity and description of goods and the date the ship departs from the port. (sailing date).

    Meanwhile, the importer’s bank receives the documents that includes commercial invoice, copy of bill of lading, packing list, certificate of origin, bill of exchange and other relevant documents from the exporter's bank. The importer makes payment to the bank and collects these documents.

  4. Bill of entry

    5. Bill of Entry is a document that captures import declaration, evidencing the fact that goods of stated value and description and specified quantity are entering into the country from abroad.

    The customs office supplies this form which is prepared in triplicate. One copy is retained by the customs department, another is retained by port trust and the third is kept by the importer.

    In cases where goods are cleared through Electronic Data Interchange (EDI) system, no formal bill of entry is filed as it auto by the system, but importer must file a cargo declaration for customs clearance. In Non-EDI system, the importer should file BOE along with other documents that include certificate of origin, certificate of inspection, bill of exchange, commercial invoice cum packing list etc.

  5. CFS clearance

    6. Once cargo arrived at port of destination, goods are moved to customs bonded area where in customs clearance procedures are carried out.
    The import cargo will be under the custody of CFS authorities who acts as custodian of cargo. The CF agent will have to settle the freight dues to the shipper/carrier, post which the carrier shall issue delivery order. CF also has to pay the necessary dock or port trust dues and get the Port Trust Receipt issued.

  6. Customs verification

    7. Customs authorities may examine the imported goods conducting physical inspection or order for conduct of laboratory tests or X-ray scans of the goods, to confirm/verify the product information provided in the declaration and also to ensure compliance with other regulatory requirements.

  7. Customs duty payment and release

    8. Customs authorities assess applicable duties, taxes based on the information provided in the BOE and results of the examination of goods. This includes calculating the basic customs duty, additional duties, and IGST based on the declared value of the goods.

    Importer to make payment of customs duties and taxes based on the assessed value. payment of import duty can be through TR-6 challans or payment at designated bank .

    If there are no irregularities and the customs duties and taxes are paid, customs authorities issue a ‘pass out order’ following which the imported goods can be removed from customs. Note that CFS shall release the goods to importing party only with the approval/consent of Customs authorities and carrier of cargo.

  8. Post-Clearance

    9. The importer then informs the exporter about the receipt of goods. If there are any discrepancies or damages to the goods, he should inform the exporter. Importers should comply with any post-clearance requirements, such as maintaining records, reporting to customs authorities, or fulfilling any additional obligations based on the nature of the imported goods.