Import Procedure, Duties, and Documentation for Business in India
Importing goods into India requires a clear understanding of various essential steps such as import procedure, duty calculation, and customs clearance. This guide aims to walk you through the entire import process, ensuring you are well-equipped to handle your import transactions smoothly. Whether you’re a business owner or new to the import-export industry, this article will help you navigate the complexities of international trade and customs clearance in India.
Key Steps in the Import Procedure in India
The import procedure in India is a step-by-step process that ensures all necessary legal requirements are met. Here’s a breakdown of the essential stages:
1. Company Registration
The first step in the import process is registering your company. Ensure that your company is legally recognized before proceeding.
2. Applying for PAN Card
Once your company is registered, apply for a PAN card, which is necessary for tax purposes.
3. Opening a Bank Account
To handle financial transactions for imports, you need a current account in the company’s name.
4. Apply for IEC Code
The Import Export Code (IEC) is mandatory for importers. You must apply for it through the DGFT (Directorate General of Foreign Trade).
5. Selecting the Right Product
Choose the product you want to import based on market demand. Do proper research to ensure the product is profitable and has sufficient demand in the local market.
6. Finding a Supplier
Research and choose suppliers from countries that have favorable trade regulations and provide competitive pricing.
7. Requesting Samples
Before finalizing a deal, request product samples to check the quality and compare prices from different suppliers.
8. Negotiation and Payment Terms
Agree on payment terms that are mutually comfortable for both the importer and exporter. It’s crucial to divide the risks equally.
9. Issuing the Contract
Once the deal is finalized, send a purchase order to the exporter, which includes product details, quantity, and pricing.
10. Hire a Customs House Agent (CHA)
A CHA helps facilitate the customs clearance process, ensuring that all necessary documents are submitted on your behalf.
11. Paying Import Duty
You must pay the applicable import duties on your goods. The amount depends on the product’s HS Code, which can be checked on the ICEGATE portal.
12. Customs Clearance
Once all documents are filed and duties paid, your goods will go through the customs clearance process and will be delivered to you after approval.
How Import Duty is Calculated for Import Procedure:
The calculation of import duty in India depends on the product’s HS Code (Harmonized System Code). You can check the applicable duties on the ICEGATE portal. Import duties are calculated based on the value of the goods, and the duty rates can vary by product category.
1. Basic Customs Duty (BCD)
This is the primary duty levied on imported goods. It varies depending on the product.
2. Social Welfare Surcharge
This surcharge is applied to the Basic Customs Duty (BCD) at a rate of 10%.
3. IGST (Integrated Goods and Services Tax)
IGST is levied on the value of the goods, including BCD and Social Welfare Surcharge.
4. Compensation Cess
This is a special cess imposed on certain goods for the compensation of the revenue lost due to GST.
Important Documents for Import Procedure :
To ensure smooth customs clearance, you must submit the following documents:
Commercial Invoice: This legal document contains product details, price, and payment information.
Bill of Lading: Issued by the carrier, this document confirms that the goods have been shipped.
Bill of Entry: This document initiates the customs clearance process, providing information about the goods.
Phytosanitary Certificate: Needed when exporting agricultural products, confirming that the goods are free from pests.
Import License: Required for restricted items like seeds, plants, and pharmaceuticals.
Letter of Credit: A financial instrument issued by the bank to ensure payment.
Warehouse Receipt: Provided when the goods are stored in a warehouse for customs clearance.
Conclusion: Simplifying the for Import Procedure in India:
By following the correct steps in the import procedure in India, including understanding the duties, necessary documentation, and customs clearance requirements, you can streamline your import business. Always ensure that your business is compliant with government regulations and stays updated with any changes in trade policies. Understanding these processes will help you reduce risks and improve the efficiency of your international trade operations.
