Import and Export

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Meaning

As per to the Customs Act, 1962 "import" means bringing to India from a place outside India; "imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption; and "importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer.

   

Steps guiding importers actions

  • Market Survey
    The initial step to be taken by an importer is to conduct a market survey to decide on the goods that he wants to import. He needs to analyze the domestic market to determine items that are in demand, or for which a demand is likely to arise. He should also examine the present competition and future potentialities. The following are some of the sources for carrying out such research:-
    • India Trade Journal
    • Export Import Data Bank of Ministry of Commerce
    • Directorate General of Commercial Intelligence and Statistics
    • Foreign Trade Performance Analysis
    • Exim Bulletins
    • Directory of Indian Importers
  • Familiarization with policies and procedures
    It is very important for the importer to get acquainted with all the policies, regulations and procedures governing foreign trade and also foreign trade agreements between India and other outside countries before starting any venture.

  • Registration
    It is mandatory for the importer to register with the Directorate General of Foreign Trade (DGFT) and acquire Importer Exporter Code (IEC) before starting with the business. It is a unique 10 digit code issued by DGFT to Indian companies An IEC no. assigned to an applicant shall be valid for all branches/units/divisions as indicated in the IEC format.

  • Finding of source
    After deciding upon the items to be imported, the source has to be identified. The importer must identify the legal formalities involved in trading of the short listed item in both the countries and also the integrity of the overseas supplier.

    The importer can seek assistance from trade fairs and exhibitions organized by:-
    • Indian Commercial Missions abroad
    • International Trade Promotion Organization
    It is also very important for him to stay aware about the notifications issued by DGFT related to imports and by Bureau of Indian Standards for specific items.

  • Classification of Items
    • Freely importable: These do not require import licenses.

    • Licensed Items: These include some consumer goods; precious stones; products related to safety; seeds, plants and animals; some insecticides, pharmaceuticals and chemicals; electronic items; items withheld for production by the small-scale sector. Licence for import of these items is issued by the DGFT.

    • Canalised Items: These can only be imported by some specific channels such as the State Trading Corporation.

    • Prohibited items: Tallow fat, animal rennet, wild animals and unprocessed ivory-are prohibited to be imported.
  • Import of Samples
    Commercial samples are specimen of products/commodities that may be imported by the traders in India, to know its features and usage and to evaluate the scope of its marketability in India. The bona fide trade samples can be imported provided the proposed products have been supplied free of charge. Samples of Prohibited items cannot be imported.

Import Procedure

  • Import Duties
    The government levies import duties on many items imported for trade purposes. These are of different types including :
    • Basic Duty
    • Additional Customs Duty
    • True Countervailing Duty
    • Safeguard Duty
    • Education Cess
  • Bill of Entry
    It is a document testifying that the goods of specified kind and value are arriving into the country from abroad. If the goods are cleared through the Electronic Data Interchange System then no formal Bill of Entry is required to be filed, but the importer has to file a cargo declaration.

  • Green Channel facility
    Some major importers are given the green channel clearance facility. Clearance of goods takes place without routine examination of the goods. No physical examination of the goods takes place.

  • Dumping
    When an exporter sells a product to India at a price lower than the price prevailing in his/her home market, it is called as dumping.

Exports

  • Meaning
    As per The Customs Act, 1962 “export” means taking out of India to a place outside India; “exported goods” means any goods which are to be taken out of India;and "exporter", in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner or any person holding himself out to be the exporter.

Steps guiding exporters actions

  • Market Survey
    The exporter must carry out International market survey to find out suitable markets for the goods he wants to export. He should also examine the present competition and future potentialities.

    Some sources to acquire such information are :-
    • India Trade Journal
    • Export Import Data Bank of Ministry of Commerce
    • Directorate General of Commercial Intelligence and Statistics
    • Foreign Trade Performance Analysis
    • Exim Bulletins
    • Directory of Indian Importers
  • Familiarization with Policies, Procedures and Agreements
    It is very important for the exporter to get acquainted with all the policies, regulations and procedures governing foreign trade and also foreign trade agreements between India and other outside countries before starting with any venture.

    The exporter can seek assistance from trade fairs and exhibitions organized by:-
    • Indian Commercial Missions abroad
    • International Trade Promotion Organization
    Exporters must also familiarize themselves with Non Tariff Measures (NTM), which are measures other than normal tariffs.

  • Registration
    Before commencing business, you need to register with the Directorate General of Foreign Trade (DGFT) and obtain Importer Exporter Code Number. Exporters must also obtain PAN based Business Identification Number (BIN) from DGFT before submission of shipping bill for clearance of export goods.

  • Export Licence
    Majority of goods are permitted to be exported without acquiring a license. Export licenses are only required for items listed in the Schedule 2 of ITC (HS) Classifications of Export and Import items. Application for grant of Export Licence must be filed to the DGFT.

  • Export of Samples
    Upto a specified limit export of sample are allowed free. The exporter has to register himself with the appropriate Export Promotion Council to avail this benefit. Samples with permanent marking as "sample not for sale" can be exported free.

  • Processing of Shipping Bill
    In case of export via air or sea, the exporter must file the 'Shipping Bill', and in case of export by road he/she must file 'Bill of Export' in the prescribed form containing details such as the name of the exporter, consignee, invoice number, FOB value, etc.

    There are five types of shipping bills:-
    • Shipping Bill for export duty free goods (white colored)
    • Shipping bill for export of goods under claim for duty drawback (green colored)
    • Shipping Bill for export of duty free goods ex-bond (pink colored)
    • Shipping Bill for export of dutiable goods (yellow colored)
    • Shipping bill for export under DEPB scheme. ( blue colored)
    Following are the Bills of Export :-
    • Bill of export for goods under claim for duty drawback
    • Bill of export for dutiable goods
    • Bill of export for duty free goods
    • Bill of export for duty free goods ex-bond
  • Let Export Order
    The exporter must contact the Customs Officer and present him the checklist which is sanctioned by the Port Authority and other testimonies along with all original documents. Customs Officer would crosscheck the quantity of the goods actually received and then mark the Electronic Shipping Bill and transfers all original documents to the Dock Appraiser. If the Dock Appraiser is satisfied that the details entered in the system comply with the description given in the original documents, he may go forward to allow "let export" for the shipment.

Facilities offered to exporters

  • Special Economic Zones
    The Special Economic Zone Act, 2005 was enacted to provide for the establishment, development and management of the Special Economic Zones for the promotion of exports. The objectives of the SEZ Act are:
    • Generation of additional economic activity.
    • Promotion of exports of goods and services.
    • Promotion of investment from domestic and foreign sources.
    • Creation of employment opportunities.
    • Development of infrastructure facilities.
  • Commodity Boards
    Under the Department of Commerce there are 5 Commodity Boards. These Boards regulate production, development and export of coffee, tea, rubber, spices and tobacco.

  • Other statutory bodies
    • Export Promotion Council
    • India Trade Promotion Orgnisation
    • Foreign Investment Promotion Board