Custom Clearance

[rajpaldular]

Question : Our company is planning to import some air blowers. Can we avail of the benefits of EPCG licence scheme?
"ONE IMPORTER"

Answer : "Air blowers" should be capital goods as defined in Para 9.12 of Foreign Trade Policy. A Chartered Engineer's certificate, justifying the import of such capital goods capable of manufacturing/producing export products, is also necessary.
You will be required to fulfil the export obligation within a period 8 years from the issue date of EPCG authorisation. The export obligation amount is calculated at 8 items of the duty-saved amount.
Subject to all conditions pertaining to EPCG scheme as given in chapter 5 of Foreign Trade Policy, hand Book (Vol. 1) and Customs Notification number 64/2008-cus dated may 9, 2008, you are entitled to import air blowers under EPCG scheme.

[rajpaldular]

Question : I am a new face in the shipping field, therefore could you kindly elaborate the following abbreviations:-
1. CFR 2. CIR 3. CIP 4. CPT 5. DAE 6. DDU 7. DEQ 8. DES 9. EXW
10. FAS 11. FCA 12 FOB.

Answer : 1) CFR - Cost and Freight
2) CIR - There is no such term found in incoterms 2000
3) CIP - Carriage and insurance paid to
4) CPT - Carriage paid to
5) DAE - There is no such term foundin incoterms 2000
6) DDU - Delivery duty unpaid
7) DEQ - Delivery ex-quay
8) DES - Delivery ex-ship
9) EXW - Exworks
10) FAS - Free along ship
11) FCA - Free carrier
12) FOB - Free on board

[gaganjat]

Rajpal thanks alot for all this info.
Infact u started the thread at the right time. I will need your help sometime soon. I will give u a call to find out about things.
Thanks again !

[rajpaldular]

Dear G. Dhillon,


Thanks a lot to read my thread. You are most welcome to ask me about Custom clearance without any hesitation.

[rajpaldular]

Question: I am a Purchase Manager in Coelme, an Italian company located close to Venice. I have a question on imports from India.
We are in negotiation with a possible Indian supplier for machined aluminium sheets (punched and bended). He told me that the ex-works price must be increased by 20 per cent because the Indian government taxes goods sold FOB.
Is this true, and, if yes, for what kind of goods?
Generally speaking, the Indian government supports exports and I don't think that any VAT tax could be apllied for exports.

ABC

Answer: India is facing a double-digit inflation at present. It has cascading effect on all industrial/economic activities, resulting in a rise in the cost of production of any industrial product. Your Indian suppliers may be able to absorb such a burden of increase in the cost of production. However, a 20 per cent increase in the price calls for close negotiation.
The Union government, like any other developing country, imposes duties on the goods and services. However, sufficient care is taken to ensure that goods/services are exported, not duties and taxes. Eighter exemption from duty on imported input is granted, or refund of duties already paid by them is made.
Increase in the rates of duties and taxes made by the government need not necessarily affect the price of export goods from India.

[rajpaldular]

Question : Is a GSP certificate required to import from china by sea as well as air. Also, what is the full form of GSP?
One Importer

Answer : GSP stands for "Generalised System of Preferences". It is non-contractual scheme by which developed countries unilaterally extend tariff concessions to developing countries.
GSP were first put into operation by the European Economic Commission (now European Union) in 1971. Today GSP comprises 12 different schemes extended by 36 developed countries.
They are Australia (only to least developed countries), Canada, Japan, New Zealand, Norway, Switzerland, The US, Belarus, Bulgaria, Russia, European Union (25).
These GSP schemes are renewed and modified from time to time.The US cancelled GSP concessions on gems and jewellery exported by India on political groups.
The list of agencies authorised to issue GSP certification is given in Appendix 4A of the Hand Book (Vol. 1).
GSP has nothing to do with your imports from China.

[rajpaldular]

Question : What is the difference between 'shipped on board' and 'clean on board'?

Answer: When the seller delivers the goods on board the ship in sound condition, it is said that he he has made 'clean on board' delivery. In such cases, the carrier should on board Bill of Lading without any adverse remarks. It is not necessary that the Bill of Lading should be endorsed with the word "CLEAN" (Refer to UCPDC Publication 600).
Under shipping terms in export contract, the buyer wants the seller to provide shipped on board Bill of lading without any adverse remarks in it.
Such terms are used in the incoterms FOB/CFR/CIF, etc.

[rajpaldular]

Question : Since, basically all nuts bolts manufacture is the same, why does the gorvernment put them under different categories for availing of duty draw-back?

Answer : Tarrif item 7318 of the duty draw-back schedule provides the draw back rates as given hereunder:
Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers ((including spring washers) and similiar articles of iron or steel.
Per kg 12 per cent
Drawback cap = Rs. 7.20
in case Cenvat facility has been availed of, the drawback rate is 1.5 per cent with the value cap at Rs. 0.90.

[rajpaldular]

We manufacture narrow widh fabric (Ch. 5806), which is exempted from excise duty.
We manufacture this, we purchase textile yarn (POY) as raw material by paying excise duty.
As no duty is applicable on the final product, we are not in a position to use such duty amount under Cenvat. Hence, its is an extra expense for us.
Can we purchase such raw materials without payment of duty, as such goods are ultimately exported by the third party-the exporter.

Guide us on the domestic sale and for export sales aspects separately.

"ABC"

Advice : For export of final products, you have the following options:

Import the raw materilas duty-free under Advance Authorisation.
Go through deemed export route by the supplier of raw materials and claim refund of excise duty paid by him.
Claim duty Draw Back benefit (all-industry rate, or brand rate).
Consult your excise expert on ARE 3 form and domestic sales, etc.

[rajpaldular]

I am a small trader in the petroleum business. One of my buyers in Kenya intends to purchase base oil, which I import from the Gulf countries.
I wish to deliver oil directly to my buyer in Kenya. For this, I wish to go in for Switch B/L . Is this possible?
Also what are the procedures involved?
Should I prepare the export invoice+packing list and other relevant documents?
If yes, where should I submit them and what is the procedure for this kind of export?


"ABC"

Reply: The Switch B/L is said to be illegal. This term is not found in any of the Reserve Bank of India (RBI) circulars, Customs Law Manual, etc. Nevertheless, the practice of doing business under Switch B/L does take place.

[rinkusheoran]

bhaisahab keepn going ...really good info to share

thanksa lot for sharing bhaisahb

[rajpaldular]

thank you very much Rinku Sheoran Ji.

[rajpaldular]

I am studying for a Masters in Vinery in France.
As part of my studies, I am doing an intership thesis with a French wine merchant in Bordeaux.
I have been struggling to get information on government policies and India's tariff structure for wines.

"ABC"


Reply: ITC (HC) code number for wine manufactured from fresh grapes - including fortified wines, sparkling wines, port and other red wines, sherry and other white wines, etc. - can be found in Chapter 22 of the ITC (HC).
Normally, the retail packing of wine is in a case containing nine litres.
This product is freely importable, without the need for any licence/permission/authorisation.
The basic Customs duty is 100 per cent on the assessable value.
Besides the basic Customs duty, the following duties are aslo payable.
Countervailing Duty (CVD): It is calculated on the assessable value plus basic Customs duty.
Notification No. 32/2003-Customs dated 01.03.2003 lays down the rate of CVD.
Education Cess: at 3 per cent is to be added to the amount of CVD.
Again an Education Cess of 3 per cent on the basic Customs duty, plus CVD+EC has to be added.
Additional Customs duty - popularly known as "SAD" - is to be added at 4 per cent on the assessable value + basic Customs duty + CVD with EC + EC.
In order to obtain the total effective rate of duty payable on wine, calculate the following to get the figure:

1) Basic duty : 100 per cent.
2) CVD+EC.
3) EC on total duty (1+2)
4) Additional duty [assessable value + basic Customs duty + (CVD+EC), + EC + additional Customs duty].

In the Foreign Trade Policy, service providers - including starred hotels, golf resorts with catering arrangements, etc - are eligible to claim duty free credit scrips (DFCS) under a scheme called "Served From India Scheme" (SFIS).
Five per cent of the foreign exchange earned by them during the previous year is the amount granted in the SFIS.
This duty-free credit scrip can be used to pay the Customs duty on the import of alcoholic drinks - including wine - in lieu of cash payment.
The amount of Customs duty calculated on this basis will be debited against DFC scrip, provided sufficient balance is available in it.
Your company could exploit the potential of consumers like 5-stars hotels in India.

[rajpaldular]

We are manufacturers/exporters of feed supplements for veterinary use and veterinary medicines (injections, tablets and syrup, etc).
We are not availing of any export incentive from the authorities, though we would like to claim them.
How we can do so and what are the applicable incentives?

"ABC"

Reply : You are eligible for any of the following export incentives:

* Duty-Free Import Authorisation.
* Advance Authorisation.
* Duty-Free Import Authorisation.
* Duty Entitlement Pass Book.
* Duty Drawback.

[rajpaldular]

We are export our products on TT on advance basis - pharmaceutical chemical. Now, we want to export on DA 90 days credit basis. What can we do to ensure payment surely?

"ABC"

Reply : "DA 90 days credit" is not a safe payment term. It involves a lot of risks. You have to establish business trust with the overseas buyer while offering such terms. Under this type of payment terms, the seller transfers the title of the goods to the buyer without third party guarantee like banks. The seller will be at the mercy of the buyer in case of payment default.
However, the Export Credit Guarantee Corporation (ECGC) may issue risks cover involved in such transactions. You may visit the ECGC office and discuss this matter before you agree to "DA 90 days credit" to the buyer.

[rajpaldular]

We import steel structures for a power plant in Mumbai, but there is always loss of material - either a package is missing, or its contents. We have appointed two surveyors in the port, but we are not able to put a claim on anyone, as the import is CFR basis. Neither the CHA, the shipping company, nor the supplier is taking responsibility for losses.

"ABC"

Reply : If JSW is importing steel structures for a power plant on CFR basis, it means it is JSW's responsibility to arrange for the insurance cover. Being a big company, JSW must have taken an open policy from insurance company which will be covering all your import consignments. Hence, it is incorrect to state that "we are not able to put a claim on anyone, as it is CFR basis."
At which point have you found the loss/pilferage/shortage? Check whether the insurance policy covers all risks from warehouse to warehouse.

[rajpaldular]

An importer of goods in his name will be billing to the foreign supplier's counterpart in India (who does not have the IEC, hence is unable to import in his name).
If the foreign supplier gives a credit note to the importer, will it be sufficient for non-payment by the importer to the supplier overseas?
The importer will pay the normal Customs duty and VAT once he bills the Indian counterpart of the overseas supplier.
Does the importer still have to remit to the supplier, and, in turn, the supplier remit back that money to square up the tansaction, as anyway the goods are being used by the supplier's Indian office?
Is there any violation of FEMA regulations in this case?
Is there any way out to avoid bank charges and documentation in both ways, for two transactions back-to-back?
can the Importer's bank insist on the importer remitting the money to the supplier?

"ABC"

Reply : Your proposal is not legally valid as per the RBI's Exchange control Regulations.

[VirenderNarwal]

Dear All Jat Brothers & Sisters,

I am working with a C.H.A.(Custom House Agent) at Kandla & Mundra Ports, Gujarat. If any of you are working Import or Export business and have any confusion with clearance of import and export cargo then ask me, I will suggest you free of cost.
You can ask me at Jatland.com or personal id:-
rajpaldular@hotmail.com
rajpal_dular@yahoo.com
rajpal_dular@rediffmail.com

my mobile number is 09898792147.
I felt a long time that I must to do something for my community.
This is the new thread that I dedicated to Jatland.com

Thanks for the information and clarification related to custom. This is to inform all the Jatlanders if you have any query related to custom, you can contact Sh.Rajpal Dular ji via provided emails and mobile number and again thanks for Dular ji for the concern information. Because there is no enquiry by any members, so this thread is being closed.