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Custom Clearance of Imported Goods


Custom Clearance of Imported Goods

As per the Customs Act, all goods imported into India must pass through the procedure of customs for the proper assessment, appraisal, examination, and evaluation. This process helps the customs authorities charge the proper tax and check the goods against illegal import. In this article, we look at the procedure for the clearance of imported goods in detail.

Conditions for Clearance of Imported Goods

  • Every importer must file the bill of entry in the form prescribed by regulations.
  • Every importer must obtain an Importer-Export Code (IEC) number before filing a bill of entry from the Director-General of Foreign Trade.
  • The information given has to be certified by the importer in the form of a declaration at the bill of entry while filing the bill of entry.
  • The importer can submit a document in an electronic format containing all the relevant information to the service center.
  • A checklist should be generated for data verification by the importer, and after verification, the data filed by the service center operator generates a bill of entry number.
  • The importer is required to sign the final document before customs clearance.
  • The importer needs to get the bill of entry, which will be forwarded to the appraising division of the custom-house for assessment function, payment of duty, etc.
  • After registration, the bill of entry is forwarded electronically or manually to the concerned appraising group in the custom house.

Assessment under the manual mode

  • The assessing offer will determine the duty payable on imported goods and verify whether there are any prohibitions or restrictions. Assessment of duty involves classifying the imported goods as per the Customs Tariff Act and determining the duty liability.
  • Also, this assessment involves correctly determining value where the goods are assessable. For this process, the assessing officer will require an invoice and other declarations submitted along with the bill of entry to support the said value. The determination of value is done per the provisions under the Customs Act, and the assessing officer takes the contemporary values and other information on valuation available in the custom house.
  • The appraising officer can require a detailed examination of the nature of the goods where the description of the goods mentioned in the document is not satisfactory.
  • Upon receipt of the examination report, the appraising officer assesses the bill of entry, indicating the valuation, final classification, and various duties. Therefore, the bill of entry goes to Assistant Commissioner for confirmation depending upon certain value limits and calculates the duty amount.
  • After assessing and calculating the duty, the importer will have to deposit the duty with the respective banks. As the goods have already been examined for finalization of valuation, no further examination by the appraising staff is required at the delivery. The goods can be delivered after accepting relevant orders and payment of dues if any.

EDI Assessment

Under the EDI Assessment of a bill of entry, the cargo declaration is transferred to the assessing officer and assessed by him. Apart from that, the EDI system supplies information for the calculation of duty, and it automatically applies the relevant rate of exchange while calculating.

After the assessment, a copy of the assessed bill of entry and other supporting documents are examined at the time of the examination of goods. Further, this system calculates duty, which the importer pays.

Examination of goods

All goods imported are required to be examined for verification of correctness of description given in the bill of entry. However, part of the consignment is selected randomly and examined. Also, the goods will be examined prior to assessment in case the importer does not have complete information at the time of import or if the Customs Appraiser or Assistant Commissioner requires the goods are to be examined before assessment. The appraiser examines the goods as per the examination order and records his approval.

Amendment of Bill of Entry

On submission of documents, amendments to the bill of entry are carried out with the approval of the deputy or assistant commissioner. The request for amendment can be submitted with the supporting documents. Upon proof being submitted to the deputy or assistant commissioner amendment in the bill of entry will be allowed after the goods have been cleared.

Prior Entry Bill of Entry

For faster clearance of goods, filing of the bill of entry prior to the arrival of goods can be performed as per the section 46 of the customs Act. This bill of entry is valid for the aircraft carrying the goods arrives in one month from the presentation of the bill of entry. The importer is required to file five copies of the bill of entry, and the last copy is known as advance, noting copy. The importer has to identify that the aircraft is due within 30 days and present the bill of entry for final as soon as the Import General Manifest (IGM) is filed.

Bill of Entry for Warehousing

The separate form of a bill of entry is used for clearance of goods, and all documents are required to be furnished with a bill of entry for warehousing. Also, the bill of entry for warehousing has to be filed, and this bill of entry is assessed, and duty payable is determined. However, such duty is not payable at the time of warehousing of the goods; the purpose of assessing the goods is to secure the duty in case the goods do not reach the warehouse. The duty paid at the time of ex-bond clearance of goods from where the Ex-Bond bill of entry is filed. The rate of duty for imported goods cleared from a warehouse is the rate that is in force on the date of filing the Ex-Bond Bill of Entry.