After the Government adopted the global development of LPG in India, mainly with the effect of this Liberalization and Globalization the barrier free trade in India initiated. The functioning of foreign trade mainly started after this initiation in leaps and bounds.
All these give rise to the import procedures and their related documentations. In this chapter a student is introduced to the concept of Import Procedure, detailing about its processes, and further informing the students about the required documents for such import.
1. Before the initial step of importing the product information about the nations and the firm is to be initialized. This is to be accumulated from the trade organizations and trade associations.
2. Next the Importer consults the (EXIM) Policy to gather information about the licensing policy which might be subjected to the product or not.
3. Then the request of the instalment of foreign cash takes place which includes the trading of Indian Currency into foreign notes. In this matter, The Exchange Control Department of the Reserve Bank of India (RBI) manages foreign trade exchange in India.
4. The importer then puts in an import request with the exporter for the supply of merchandise.
5. After the payment terms concur between the importer and the overseas provider, the importer gets the letter of credit.
6. The importer arranges for the payment of the advance money on arrival of the goods at the port. This saves the importer from the high penalties.
7. The overseas supplier after in-loading the merchandise on the ship dispatches the “Shipment Advice” to the importer to give information with respect to the shipment of goods.
8. Later the importer also pays the dock charges in receiving of the goods and all other formalities are carried out.
The Import Procedure in India follows the same track as already discussed above, adding to this important documentation in India are required to make an import procedure successful.
The important documents are as follows:
Invoice, Packing List, Certificate of Origin, B/L, Authority letter, GATT declaration, IEC no. – these are the basic documents required for import.
Catalogue, Technical Write ups – required for import of machinery and equipment.
Chemical Composition, Test bond required by the respective customs – all are needed in case of Chemical Import.
Phytosanitary Certificate with Fumigation, Certificate of Origin – required for un-processed food, plant products, wood imprints, fruits and seeds import.
Test Report and Composition – for processed food product import.
Azo Dye Inspection Certificate – in Import of Fabric.
PLAT T essential for valuation – In case of import of Plastic Granules.
Registered EPCG License, Panelised Undertaking by Importer, Bond com BG Bank Covering Letter, Signature Attestation from Bank, Copy of Board of Regulation, Particles of Memorandum, and Detail of Previous License – Import under EPCG license.
Form a necessary from Supplier for customs duty advantage – Import of Ceramic Tiles.
Test Certificate – Import of Wine and Whiskey.
Import procedure means all the steps involved in purchase of goods from any foreign country. The procedural steps involved in import trade differ from country to country in respect of their import policy, statutory requirements. In majority of the countries import trade is being controlled by the government.
The objective of empowering the government in the import trade is to keep a strict restriction policy in regards of foreign exchange, protection of Indigenous industries etc. For importing goods, a specified and regulated procedure is to be followed. The procedure is summed into quick steps as below:
Procurement of Import License and Quota
Obtaining Foreign Exchange.
Placing the Order.
Dispatching a letter of Credit.
Obtaining Necessary Documents.
Customs Formalities and Clearing of Goods.
Making the Payment
Closing the transactions.
Foremostly a business must first obtain an Import Export Code (IEC) number from the DGFT. This is a pan-based registration of traders with a lifetime validity which is required for clearing customs, the IEC registration takes about 10-15days.
After IEC is allotted, a business entity may import goods in compliance with Section 11 of the Customs Act 1962, Foreign Trade Act 1992, and Foreign Trade Policy.
An import license can be either a general license or specific license. In case of general license, the goods can be imported from any country while in case of specific license, goods are to be imported from specific countries only.
After acquiring the import license, the importers are required to furnish import declarations in the Bill of entry with their PAN based BIN to complete customs clearing formalities.
Along with the goods-specific duties like safeguard duty, anti-dumping duty and social welfare surcharge, India levies customs duty on imported goods as specified in the first schedule of Customs Tariff Act 1975.
While processing the importing procedures, the owner of the company has to make sure about the legalities and the compliances related to the import of goods and services from foreign nations.
1. Are the procedures mandatory to follow?
The Procedures are fixed by the Central Government, which checks the legal perspective of the trade in each step. It is the duty of the business owner willing to import goods or services from the foreign countries to comply with the procedures as already set up, this will smoothen the function and will avoid sub-standard trade.
2. What is PAN and BIN?
PAN – Permanent Account Number is a ten-digit alpha-numeric number allotted by the tax department in order to keep a track on the tax formalities of the business.
BIN – Business Identification Number, which is mandatory required in export formalities.
3. What is the full form of EXIM?
The full form of EXIM is Export and Import. The EXIM Bank and also the EXIM policies are related in this chapter. Export-Import Bank of India (EXIM Bank) is a financial institution, which is also specialised and is wholly owned by the Government of India. This was set up in 1982, for finance facility and to promote foreign trade of India.
4. What is LPG?
LPG is the acronym for Liberalization, Privatization, and Globalization which was adopted by the Government to push the nation in the growth of economic development which was occurring world-wide. This policy relaxed all the strict entry barriers and promoted free trades among different countries and also it took an initiative to privatize the sick government companies.