Exim Documentation

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EXPORT & IMPORT DOCUMENTATION

EXPORT DOCUMENTATION

INTRODUCTION:

The export process is made more complex by the wide variety of documents that the exporter

needs to complete to ensure that the order reaches its destination quickly, safely and without problems.

These documents range include those required by the exporter (such as bills of entry, foreign exchange

documents, export permits, etc.), those required by the importer (such as the proforma and commercial

invoices, certificates of origin and health, and pre-shipment inspection documents), those required for

payment (such as the Reserve Bank forms, the letter of credit and the bill of lading) and finally, those

required for transportation (such as the bill of lading, the airway bill or the freight transit order).

Documentation requirements for export shipments also vary widely according to the country of

destination and the type of product being shipped. Most exporters rely on an international freight

forwarder to handle the export documentation because of the multitude of documentary requirements

involved in physically exporting goods and it is strongly recommended that you also make use of a

freight forwarder to help you work your way through the maze of documentation.

Functions of export documentation:

An attestation of facts, such as a certificate of origin

Evidence of the terms and conditions of a contract if carriage, such as in the case of an

airwaybill

Evidence of ownership or title to goods, such as in the case of a bill of lading

A promissory note; that is, a promise to pay

A demand for payment, as with a bill of exchange

A declaration of liability, such as with a customs bill of entry


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A receipt for goods received.

STEPS IN EXPORT:

Few step for an enterprise to become an export organisation are:-

1) REGISTRATION AS A BUSINESS ENTITY:

A new export unit can be started by registering as proprietorship, partnership or Limited

Liability Company.

2) IEC NUMBER:

Any company wish to export/import need to obtain a Import Export code(IEC) number. IEC is

issued by Regional licensing authority of DGFT. For communication with any office in regard to for

export and import needs IEC number.

3) RCMC:

It means the certificate of registration and membership granted by an Export Promotion

Council/ Commodity Board/ Development Authority or other competent authority as prescribed by

Foreign Trade Policy to an exporting unit.

Any person, applying for a license/ authorization/certificate/permission to import/ export or any

other benefit or concession under Foreign Trade Policy is required to furnish (RCMC). It is also

required for executing a bond before Central Excise authorities, which exempts exporters to furnish

bank guarantees.

Export Promotion Councils have been set up by various ministries of the Central Government

to promote and develop the exports of particular group of products, projects and services. For certain

group of products, which are sensitive from the viewpoint of national consumption, there are

commodity boards instead. Thus while we have export promotion councils for apparel, leather,

software, chemicals, engineering goods etc., India has commodity boards for tea, coffee, jute etc.

4) REGISTRATION WITH SALES TAX OFFICE:

Exported goods from India are exempt from central & state sales tax. However, for getting

exemption of such taxes or claiming their refund, wherever permissible under Foreign Trade Policy,


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the exporting unit should be registered with sales tax authorities.

5) REGISTRATION WITH EXCISE DEPT.:

If an exporting unit is engaged in manufacturing of products, it needs registration with excise

department & formalities remain the same as for any domestic unit. This registration is required for

claiming refund of excise duties under various schemes of the government.

PRE-SHIPMENT DOCUMENTS

These documents can be broadly classified into the following categories:

I) Documentation as per requirements of the contract:

Commercial Invoice

Packing List

Insurance Certificate/Policy

Bill of Exchange

Shipment Advice

Certificate of Origin

Inspection Certificate

Transportation Documents:

- Bill of Lading

- Airway Bill

- Combined Transport Document

II) Documentation as per requirement of Government of India:

Export License, if necessary,

AR4/AR5 Form

Pre shipment Inspection Certificate

Export Declaration Form GR/PP/VPP/COD/SOFTEX Form

Shipping Bill

III) Documents as per requirement of the importing Country:


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Customs Invoice

GSP Certificate of Origin

IV) Documents required for claiming export assistance:

Application form

Shipping Bill duly authenticated by customs

Commercial invoice attested by bank Bank certificate

Statement of Exports certified by the negotiating bank

Registration cum membership form of concerned export promotion council.

Another way of looking at the documents is to classify them as principal and auxiliary documents.

Principal Documents

These are:

1. Commercial Invoice

2. Packing List

3. Marine Insurance Policy/Certificate

4. Bill of Exchange

5. Letter of Credit

6. Bill of Lading

7. Airway Bill

8. Combined Transport Document

9. GR/PPNPP/COD/SOFTEX Forms

10. Export Inspection Certificate

11. AR4/AR5 Forms

12. Shipping Bill

13. Certificate of Origin

14. Shipment Advice

15. Consular Invoice

Auxiliary Documents

These documents may be required for the preparation or procurement of some of the principal

documents or for arranging some of the preliminaries in effecting shipment of goods, such as giving

shipping instructions to freight forwarders, arranging pre-shipment inspections, marine insurance

cover, shipping space, procurement of bills of lading etc.

Documents normally required are:


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1. Shipping Instructions Form

2. Application for Export Inspection Agency

3. Shipping Order

4. Mate Receipt and

5. Dock Challan.

Essential Documentation:

The invoice and bill of lading are the two documents required for every export shipment. As

such, you should ensure that all other documents associated with the shipment match the information

on these documents.

Invoices

Commercial Invoice

It is a basic document which gives full details of the contents of the shipment and serves as

seller's bill of goods and, therefore, sets out the terms of sale. An exporter is required to prepare this

complete document which must fully identify the overseas shipment and serve as a basis for the

preparation of all other documents which, in greater or lesser detail reproduce information from it.

Normally, apart from the special requirements of the importer, form of invoice will be similar to that

used for domestic business. There is no standard form and it is left to the exporter to change his own

design, always ensuring that it will be convenient for use by foreign parties. In fact, the exporter

should strictly follow the requirements of the purchaser in regard to invoicing and, as the requirements

of foreign laws vary widely and are revise from time to time,' it is important for an exporter to keep

himself fully informed, about such changes in government regulations of the importing countries.

Pro-forma Invoice

A pro-forma invoice is an invoice sent to the buyer before the shipment, giving the buyer a

chance to review the sale terms (quantity of goods, value, specifications) and get an import license, if

required in their country. It also allows the buyer to work with their bank to arrange any financial

process for payment. For example, to open a Documentary Credit (Letter of Credit), the buyers bank

will use the pro-forma invoice as a source of information. The exporter/seller should not send their


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customer a pro-forma invoice unless they fully understand what they are offering to the buyer. If no

changes are required on the pro-forma invoice after the buyer reviews it, the exporter can simply

change its date and title and turn it into a commercial invoice.

Consular invoice:

A consular invoice is the commercial invoice stamped or notarized by the consulate or embassy

of your customers country, if required. For example, if you are exporting to Egypt and your buyer

requires a consular invoice, the Egyptian embassy in India will do this for a small fee. Usually a freight

forwarder will offer this service, but an exporter can send the original invoice to the consulate, have it

notarized/legalized as required, pay the fee, and have the documents returned or forwarded on. It is

important to understand that consular invoices are required in the buyers country, so you need to add

the time/costs associated with obtaining one to the price of the goods you are shipping.

Material Handling

Packing List:

A packing list is prepared by the shipper and is a detailed breakdown of the items within a

shipment. It may also include any special marks for identification. For example, the customer may

want ABC XX in blue letters on the side of the packaging. For insurance claims and tracking

purposes, it helps to describe what is in each package. The packing list should also reference the

customers purchase order number and destination. Often, a packing list is taped to palletized cargo or

on the main carton/box of a shipment so that the importers customs agency or any transportation

handlers can have easy access to it to know what the goods are and their destination. The quantity and

items listed on the commercial invoice must match with the packing list, but not necessarily match the

pro-forma invoice. Some companies prepare a packing list that is identical to the commercial invoice,

minus the prices and other monetary details.

Dock (or Warehouse) Receipt:

The dock or warehouse receipt is issued by a warehouse supervisor or port officer and certifies

that the goods have been received by the shipping company. This document is used to transfer

accountability when goods are moved by the domestic carrier to the port of embarkation and left with


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the international carrier. At this time, the carriers Bill of Lading is also signed by both parties and

copies are issued accordingly

Bill of Lading

Of all the documents, bill of lading is unquestionably the most important and valuable document.

Issued by the shipping company, a bill of lading is

A receipt/acknowledgement of cargo delivered for transportation.

A contract of affreightment between the shipper and the carrier specifying their respective

responsibilities and obligations.

A document of title to goods and provides interested parties including banks with title to the goods

mentioned therein.

A collateral, that can be used for any advances made to the seller or to the buyer in the process of

financing the shipment.

Bills of lading are prepared by the shippers on printed forms supplied by the shipping company

concerned and necessary particulars are entered therein the blank spaces provided for the purpose.

Normally, a bill of lading shows the date of shipment., port of shipment, name of the carrying vessel,

name of the consignor, consignee and notify party, port of discharge, number, contents and

identification marks of packages and goods shipped, and the amount of freight `paid' or to 'pay'. Bills

of lading are normally issued in sets of four. Three copies duly signed are delivered to the shipper,

while the fourth copy is unsigned and retained by the shipper's master for his own use. Different copies

are sent by different mails to reduce the risk involved by delay or loss in transit. Goods are released at

the port of destination against one of the copies of the bill of lading presented first and other copies

becoming void. Banks invariably take possession of full set of bi 11 of lading, the number comprising

the full set being indicated by the bill of lading itself.

Bills of lading may be issued either in negotiable or non negotiable form. A negotiable bill of

lading is issued to the order of consignee, or endorsed either in blank by a shipper or endorsed to the

order of named party.

Bill of Lading can.be of various types as discussed below :


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Received for Shipment B/L:

It is issued by the shipping company when goods have been given into the custody of the

shipping company but have not yet been placed on board the ship.

On Board Shipped B/L:

It certifies that the goods have been received on board the ship.

Clean B/L:

It indicates a clean receipt. In other words, it implies that there was no defect in the apparent

order and condition of the goods at the time of receipt or shipment of goods by the shipping

company, as the case may be.

Claused or Dirty B/L:

This bill bears a superimposed clause of annotation, which expressly declares a defective

condition of the goods. The clause may state "package number 20 broken" or "bale number 20 hook-

damaged". By superimposing such clauses on the B/L, the shipping company limits its responsibility at

the time of delivery of goods at the destination. It is very important to note that only a clean B/L is

acceptable for negotiation of documents with the bank.

Combined B/L:

It covers several modes of transport for performing the complete journey from the exporting

country to the importer's warehouse. For example, part of the journey may be completed by ship while

subsequent parts may be undertaken by road, rail and air.

Through B/L:

It covers goods being transshipped enroute but where the first carrier had the responsibility as the

principal carrier for all stages of the journey. For example, goods may be shipped from Bombay to

Dubai and transshipped from Dubai to port in Latin America.

Trans-shipment B/L:

It has similar characteristic as the Through B/L except that in this case the first carrier acts only

as an agent for effecting Trans-shipment of cargo.

Charter Party B/L: It covers shipment on a chartered ship.


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The contract or the letter of credit will specify the nature of bill of lading that the exporter has

to procure for the importer. Generally, the importers insist on the "clean on-board shipped" bill of

lading, with the prohibition of the trans-shipment of goods.

Air Way Bill (AWB)/Air Consignment Note

In air carriage, the transport document is known as the Air Way Bill (AWB) or Air

Consignment Note. The AWB merely evidences the air carrier's receipt of the goods on the terms of

the contract of carriage and does not represent the goods/title of goods. The goods are delivered to the

consignee (receiver) mentioned in the AWB. The consignee will have to identify himself as the party

named in the AWB and the goods may be delivered to him without any hindrance, usually on payment

of some charges (depending upon the terns of the trade). When the seller has made the contract with

the air carrier, the buyer can protect himself against the seller's rerouting of the goods by obtaining the

shipper's copy of the AWB.

The air carrier may not accept instructions from any person other than the holder of such a

copy of AWB, and if this duty is not observed, the air carrier will be liable to pay compensation for the

loss incurred.

Some of the important details contained in the AWB are the name of the consignee/

consignor/notified party, the flight number and date on which the goods will be airlifted, brief

description of the goods and quantity, departure airport and the destination airport, freight amount and

AWB number, teens on which carriage is undertaken, and signature of carrier/its agent and

shipper/agent.

Certificates

Marine Insurance Policy/Certificate

A marine insurance policy/certificate is a document associated with transit of goods in trade,

whereby the insurer undertakes to indemnify the assured against damage for loss of goods due to

risks/hazards in transit, to the extent and in the manner mentioned in this document. In a OF contract

of sale, the seller has to take the requisite insurance cover to protect his own as well as the buyer's

interests in case of damage or loss of goods. The insurance policy/certificate must be, such as to satisfy

the conditions of the letter of credit/ sale contract, and roust coder all risks specified therein, or which

are considered to be normally associated with trade in a particular product.


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Certificate of Inspection:

Some customers will require a pre-shipment inspection to satisfy their own requirements or

local regulations, according to an industry, government, or carrier specification. Neutral organizations

specialize in these types of certifications, whereby an inspector checks the goods in question prior to

shipment. Sometimes an inspector can look at a sample, but other times inspection must occur when

the goods are packaged to issue a certificate.

Certificate of Authentication:

An original document that has been notarized may require authentication by the Secretary of

the Commonwealth. An Apostille certificate will be issued according to the country (language) of

destination, confirming the status of the notary who has witnessed the original document.

Letter of Credit

A letter of credit is a written undertaking by a bank, the issuing bank, to the seller, thebeneficiary in accordance with the instructions of the buyer, the applicant, to effect payment upto a

prescribed amount, within a prescribed time period against prescribed documents, provided these are

correct and in order i.e. they conform with the instructions of the applicant. Letters of credit are one of

the most used methods of payment in international transactions. Letters of credit are usually issued

subject to the provisions of the "Uniform Customs and Practices for Documentary Credits" issued by

the International Chamber of Commerce. It contains the rules governing the letter of credit transactions

and the interpretation of various terms relating thereto and has been subscribed by almost all the major

trading countries of the world.

There are usually two banks involved in a documentary credit operation. The issuing bank is

the bank of the buyer. The second bank, the advising bank, is usually a bank in the seller's country.

The second bank can, be simply an advising batik, or it can also assume the more important role of a

confirming bank. In either case, it undertakes the transmission of the credit, and by doing so, implies

the authenticity of the signature of the issuing bank. If the second bank is simply "advising the credit"

it will mention this fact when it forwards the credit to the seller. Such a bank is under no commitment

to pay the seller. If the advising bank is also 'confirming the credit' it will so state. This means that the

confirming bank, regardless of any other consideration, must pay, accept, or negotiate without recourse

to the seller, provided all the documents are in order & the credit requirements are met. Figure below

summarizes the relationships between the partners to the letter of credit. A letter of credit contains


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(whether ascertainable at the time of export or not) has been, or will within the prescribed period

be, paid in the prescribed manner.

These Forms are:

GR Form: It is required to be filled in duplicate for all exports in physical form other than by post.

PP Form : It is required to be filled in duplicate for all exports to all countries, made by post

parcel, except when made on "value payable" or"cash on delivery" basis.

VP/COD Form: It is required to be filled in one copy for exports to all countries by post parcel

wider arrangements to realise proceeds through postal channels on "value payable" or "cash on

delivery" basis.

SOFTEX Form: It is required to be prepared in triplicate for export of computer software in non-

physical form.

AR4 and AR5 Form

Refund of central excise is an important fiscal incentive for export promotion. As you know,

exports should not bear the burden of indirect taxes. Hence, exportable goods are either exempted from

such taxes or these taxes are refunded, if exemption is not possible. In India, excisable goods are free

from the incidence of excise duty levied by the central government, both on finished product and raw

materials. The scheme is governed by section 37 of the Central Excise and Salt Act, 1944 as amended

from time to time. The rebate is granted on the duty levied at finished product and on inputs for this

finished product. Rule.12, 191-B, and 191-BB of Central Excise Rules have been integrated into Rule

13. This rule is applied for exports of goods in bond and utilisation of non-duty paid raw material for

manufacture and export of excisable goods.

Both AR4 and AR5 forms can be used for export in Bond or under Rebate of Central Excise duty.

AR4 form is to be used where either finished stage duty is not paid or its rebate is to be claimed later

on. It can be elaborated as under:

i) Form AR4 is to be used in case of exports in Bond, of all goods without payment of duty on

finished item (not on inputs).

ii) AR4 Form is also used where finished stage duty is paid and rebate thereof is to be claimed

after exports.

Form AR5 is used where goods are manufactured/exported without the payment of duty or inputs

(inputs stage duty). It can be elaborated as under:


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AR5 form is used where no duty is paid on production inputs and the finished stage duty is also

not paid on the account of their export being made in bond.

AR5 form is also used where inputs stage duty is not paid but duty on finished goods is paid

and the rebate thereof is to be claimed after export.

Shipping Bill

Shipping Bill is the principal document required by the customs authorities. It contains

description of export goods and other particulars like number and description of package(s), marks and

number,. quantity and value as defined in the Sea Customs Act, Indian or foreign merchandise, name

of the vessel in which goods are to be shipped, country of destination, etc. It is only after the Shipping

Bill, is stamped by the customs that cargo is allowed to be carted to Port sheds and Docks. It is used

for export by sea or air or even for transportation from one port to another within the country.

There are separate forms of shipping bill for free goods (Free Shipping Bill), goods on which export

duty is payable (Dutiable Shipping Bill), goods for which there is a claim for drawback of duty

(Drawback Shipping Bill) and in case of imported goods for re-export which are kept in custom

bonded warehouses (Shipping Bill for Shipment ex-bond).

AUXILIARY DOCUMENTS

Shipping Instruction Form

It is used to send shipping instructions to the shipping company or the shipping agent regarding

shipment of export cargo. This facilitates the preparation of bill of lading and other documents by the

shipping agent. Also known as Cargo Declaration Form, it usually contains information about country

of origin, marks on cases, number of packages, name and address of the consignee, exporter's name

and address, invoice value, steamer freight payable etc.

Application for Export Inspection


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For obtaining the certificate as required under the provisions of Export (Quality Control and

Inspection) Act, 1963, the exporter has to submit an application in the prescribed form (in duplicate)

submitting the original to Export Inspection Agency and duplicate to the Export Inspection Council,

seven days in advance of the expected date of shipment. The application form contains details of

shipment including technical requirement including specifications as stipulated in the export contract.

Upon receipt of the application, the goods are inspected and certificate issued, if found in order.

Shipping Order

For booking space, the exporter has to apply to the shipping company either directly or through a

freight broker. If the space is available, the shipping company will issue to the broker/shipper a

document called a shipping order, instructing the Commanding Officer of the ship that the goods from

the shipper concerned, as per details given, should be received on board the vessel. The original is

given to the shipper and duplicate is sent to the Commanding Officer of the ship.

IMPORT DOCUMENTATION


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The procedures are similar to procedures for export, of course, in reverse direction.

WHO IS 'PERSON IN CHARGE'

As per section 2(31), 'person in charge' means (a) In case of vessel its master (b) In case of

aircraft - its commander or pilot-in-charge (c) In case of train - its conductor or guard and (d) In case

of vehicle or other conveyance - its driver or other person in charge.

The significance of this definition is

He is responsible for submitting Import Manifest and Export Manifest

He is responsible to ensure that the conveyance comes through approved route and lands at approved

place only.

He has to ensure that goods are unloaded after written order, at proper place. Loading also has to be

only after permission.

He has to ensure that conveyance does not leave without written order of Customs authorities.

He can be penalised for (a) Giving false declaration and statement (b) shortages or non-accounting of

goods in conveyance

PROCEDURE TO BE FOLLOWED BY THE CARRIER

The 'person in charge of conveyance' (carrier of goods) has to follow prescribed procedure.

Arrival at customs port/airport only

Section 29 provides that person-in-charge of a vessel or an aircraft entering India shall call or

land at customs port or customs airport only. It can land at other place only if compelled by accident,

stress of weather or other unavoidable cause. In such case, he should report to nearest police station or

Customs Officer. While arriving by land route, the vehicle should come by approved route to land

customs station only.

Import Manifest / Report- Person-in-charge of vessel, aircraft or vehicle has to submit Import Manifest

/ Report.

[also termed as IGM - Import General Manifest]. (In case of a vessel or aircraft, it is called import

manifest, while in case of vehicle, it is called import report.) The import manifest in case of vessel or

aircraft is required to be submitted prior to arrival of a vessel or aircraft. Import report (in case of

vehicle) has to be submitted within 12 hours of arrival at the customs station. If the report / manifest

could not be submitted within prescribed time, person-in-charge or any person specified as responsible


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The Bill of Entry should be in prescribed form. The standard size of Bill of Entry is 16" 13".

However, for computerisation purposes, 15" 12" size is permitted. (Mumbai Customs Public Notice

No. 142/93 dated 3-11-93).

Bill of Entry should be submitted in quadruplicate original and duplicate for customs,

triplicate for the importer and fourth copy is meant for bank for making remittances.

Under EDI system, Bill of Entry is actually printed on computer in triplicate only after out of

charge order is given. Duplicate copy is given to importer.

Types of Bill of Entry

Bills of Entry should be of one of three types. Out of these, two types are for clearance from

customs while third is for clearance from warehouse.

BILL OF ENTRY FOR HOME CONSUMPTION

This form, called Bill of Entry for Home Consumption, is used when the imported goods are to be

cleared on payment of full duty.Home consumption means use withinIndia. It is white coloured and

hence often called white bill of entry.

BILL OF ENTRY FOR WAREHOUSING

If the imported goods are not required immediately, importer may like to store the goods in a

warehouse without payment of duty under a bond and then clear from warehouse when required on

payment of duty. This will enable him to defer payment of customs duty till goods are actually

required by him. This Bill of Entry is printed on yellow paper and often called Yellow Bill of Entry.

It is also called Into Bond Bill of Entry as bond is executed for transfer of goods in warehouse

without payment of duty.

BILL OF ENTRY FOR EX-BOND CLEARANCE

The third type is for Ex-Bond clearance. This is used for clearance from the warehouse on payment of

duty and is printed on green paper. The goods are classified and value is assessed at the time of

clearance from customs port. Thus, value and classification is not required to be determined in this bill

of entry. The columns in this bill of entry are similar to other bills of entry. However, declaration by

importer is not required as the goods are already assessed.

RATE OF DUTY FOR CLEARANCE FROM WAREHOUSE


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Appraiser has to (a) correctly classify the goods (b) decide the Value for purpose

of Customs duty (c) find out rate of duty applicable as per any exemption notification and (d) verify

that goods are not imported in violation of any law. He can call for any further documents that may be

required for assessment. If he is of the opinion that goods have to be examined for appraisal, he will

issue an examination order, usually on the reverse of Bill of Entry. If such order is issued, the Bill of

Entry is presented to appraising staff at docks / air cargo complexes, where the goods are examined in

presence of importers representative. Assessment is finalised after getting the report of examination.

VALUATION OF GOODS

As per rule 10 of Customs Valuation Rules, the importer has to file declaration about full

'value' of goods. If the assessing officer has doubts about the truth and accuracy of 'value' as

declared,he can ask importer to submit further information, details and documents. If the doubt

persists, the assessing officer can reject the value declared by importer. [rule 10A(1) of Customs

Valuation Rules]. If the importer requests, the assessing officer has to give reasons for doubting the

value declared by importer. [rule 10A(2)]. If the value declared by importer is rejected, the assessing

officer can value imported goods on other basis e.g.value of identical goods, value of similar goods

etc. as provided in Customs Valuation Rules. [This amendment has been made w.e.f. 19.2.98, as per

WTO agreement. However, it has been held that burden of proof of under valuation is on department].

- - Assessing Officer should not arbitrarily reject the declared value and increase the assessable value.

He should follow due process of law and issue appealable order. MF(DR) circular No.16/2003-Cus

dated 17-3-2003.

APPROVAL OF ASSESSMENT

The assessment has to be approved by Assistant Commissioner, if the value is more than Rs

one lakh. (in cases covered under fast track clearance for imports, appraiser is also authorised to

approve valuation). After the approval, duty payable is typed by a pin-point typewriter so that it

cannot be tampered with. As per CBE&C circular No. 10/98-Cus dated 11-2-1998, Assessing Officer

should sign in full in Bill of Entry followed by his name, preferably by rubber stamp.

EDI ASSESSMENT

In the EDI system, the cargo declaration is transferred to assessing officer in the groups

electronically. Processing is done on the screen itself. All calculations are done by the system itself. If

assessing officer needs clarification, he can raise a query. The query is printed at service centre and

importer replies through service centre. Facility of tele-enquiry about status of documents is provided

in major customs stations.


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Under EDI, normally, documents are inspected only after assessment. After assessment, copy

of Bill of Entry is printed at service centre. Final Bill of Entry is printed only after Out of Charge

order is given by customs officer.

PAYMENT OF CUSTOMS DUTY

After assessment of duty, necessary duty is paid. Regular importers and Custom House Agents

keep current account with Customs department. The duty can be debited to such current account, or it

can be paid in cash/DD through TR-6 challan in designated banks. After payment of duty, if goods

were already examined, delivery of goods can be taken from custodians (port trust) after paying their

dues. If goods were not examined before assessment, these have to be submitted for examination in

import shed to the examining staff. After shed appraiser gives out of charge order, delivery of goods

can be taken from custodian.

First and second system of assessment

There are two systems of assessment. Section 17(2) provides for assessment after examination

of goods and section 17(4) provides for assessment on basis of documents, followed by inspection and

testing of goods. First appraisement system or 'first check procedure' is followed if the appraiser is

not able to make assessment on the basis of documents submitted and deems that inspection is

necessary. Goods are examined first and then these are assessed. This method is followed only if

assessment is not possible on basis of documents. - - The importer himself may also request 'first check

procedure', if he cannot give all required details regarding description / value of goods. He has to make

request for first check examination at the time of filing of Bill of Entry or at data entry stage in case of

EDI. He has to give reason for seeking first appraisement. The examination order is recorded on Bill of

Entry and then returned to importer / CHA. It is then presented to import shed for examination. The

shed appraiser / Dock examiner examines the goods as per examination order and records his findings.

If samples are required, they are taken out. In case of EDI system, the report of examination is given in

the computer itself. The goods are then assessed to duty by appraiser.

In Second Appraisement System o r 'second check procedure', which is normally followed,

assessment is done on basis of documents and then goods are examined. Such examination is not

mandatory. It is done on selective basis on the basis of risk assessment or specific intelligence report.

Section 17(4) of Customs Act specifically provides that if initially assessment is done on basis of

documents, re-assessment can be done after examination or testing of goods or otherwise, if it is found


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Section 18 of Customs Act, 1962 provide that provisional assessment can be done in

following cases (a) when Customs Officer is satisfied that importer or exporter is unable to produce

document or furnish information required for assessment (b) it is deemed necessary to carry out

chemical or other tests of goods (c) when importer/exporter has produced all documents, but Customs

Officer still deems it necessary to make further enquiry. In such cases, assessment is done on

provisional basis. The importer/exporter has to furnish guarantee/security as required by Customs

Officer for payment of difference if any. Goods can be cleared after payment of duty provisionally

assessed and after providing the security. After final assessment, difference is paid by importer or

refunded to him as the case may be. If the imported goods were warehoused after provisional

assessment, the Customs Officer may require importer to execute a bond for twice the difference in

duty, if duty finally assessed is higher [section 18(2)(a)]. The bond is called as 'P D Bond' (Provisional

Duty Bond). The bond is with security or surety. Bank guarantee can also be given as a security.

Checking of duty drawback / license documents

Documents in respect of Duty Entitlement Pass Book(DEPB), advance license, duty drawback

etc. will be checked.

Execution of bond and payment of duty

Once the duty is assessed, the bill of entry is returned to importer. The Bill of Entry should be

presented to comptist for calculation and pinpointing of the duty. If bond has to be executed, it will be

taken in bond section.

Payment of duty

If goods are to be removed to a warehouse, duty payment is not required. The goods can be

taken to a warehouse under bond, without payment of duty. However, if goods are to be removed for

home consumption, payment of customs duty is required. CHA or the importer can take it for payment

of customs duty. Large importers and CHA have P.D. accounts with customs. Duty can be paid either

in cash or through P.D. account. P. D. account means provisional duty account. This is a current

account, similar to PLA in central excise. The importer or CHA pays lump sum amount in the account

and gets credit on the amount paid. He can pay customs duty by debiting the amount in P.D.

(Provisional Duty) account. If the importer does not have an account, he can pay duty by cash using

TR-6 challan. Of course, payment through PD account is very convenient and quick.The duty should

be paid within five working days (i.e. within five days excluding holidays) after the Bill of Entry is

returned to the importer for payment of duty. [section 47(2)]. (Till 11-5-2002, the period allowed was

only 2 days).

Interest for late payment


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If duty is not paid within 5 working days as aforesaid, interest is payable. Such interest can be

between 10% to 36% as may be notified by Central Government. [Section 47(2) of Customs Act,

1962.]. - - Interest rate is 15% w.e.f. 13-5-2002. [Notification No. 28/2002-Cus(NT) dated 13-5-2002]

Earlier, interest rate was 24% p.a, w.e.f. 1-3-2000, as per notification No. 34/2000-Cus(NT)].

Disposal if goods are not cleared within 30 days - As per section 48 of Customs Act, goods must be

cleared within 30 days after unloading. Customs Officer can grant extension. Otherwise, goods can be

sold after giving notice to importer. However, animals, perishable goods and hazardous goods can be

sold any time - even before 30 days. Arms & ammunition can be sold only with permission of Central

Government.

Out of Customs Charge Order

After goods are examined, it is verified that import is not prohibited and after customs duty is

paid, Customs Officer will issue Out of Customs Charge order under section 47. Goods can be

cleared from customs area only on receipt of such order. This is an adjudicating order within the

meaning of Customs Act, even if it is passed by Appraiser and not by Assistant Commissioner.

Demurrage if goods not cleared

Heavy demurrage is payable if goods are not cleared from port within three

days.

Import of software through data communication

Import of software through data communication / telecommunication is permitted. Since such imports

are not available for physical verification, proper accountal in books should be maintained. Unit

intending to import software through datalink is required to inform estimated annual requirement to

Development Commissioner of EOU / Director of STP. This should be approved by him.[what for ?].

After import of software through internet, written information should be submitted to Director of STP /

Development Commissioner of EOU and importer shall get a certificate. This certificate should be

submitted to Assistant / Dy Commissioner of Customs within 48 hours, along with Bill of Entry and

certificatefrom Development Commissioner of EOU / Director of STP. He will issue 'out of charge'

order. The documents such as invoice etc. will be routed through bank. - MF(DR) circular No.

58/2000-Cus dated 10-7-2000.

Relevant Date for Rate and Valuation of Customs Duty

Section 15 of Customs Act prescribes that rate of duty and tariff valuation applicable to

imported goods shall be the rate and valuation in force at one of the following dates. (a) if the goods


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Exim Documentation

Documents

Transcript of Exim Documentation