Custom Clearance

[rajpaldular]

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


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

[pahalji]

Thanks Bhai Rajpal,
Its a nice thing you put forward, Keep on going. We need the people like you.
Best of luck.

Pahal Bhai

[rajpaldular]

Dear Krishan Pahal Bhai,

thanks a lot to compliment my new thread.
a bundle of thanks again.

rajpal dular

[rajpaldular]

Question: A party, which buys and imports second-hand machines in Singapore, as it has an office there, is repeatedly saying its machines are not sold and hence is unable to make the payment.
The party imports the machines under different users' names. It pays penalty to obtain a temporary IEC [IMPORT EXPORT CODE]. We were involved in the import clearance.
The company has all documents pertaining to the imports. Unfortunately, we have no documentary evidence from the party agreeing with us to hold the exchange control copy. What do we do?

Answer: In the absence of documentary evidence of the contract between the importer and C.H.A.(Custom House Agent), the latter cannot hold an exchange control copy of the BILL OF ENTRY in lieu of payment towards their agency commission, or other charges.
You may resort to legal action to recover the amount.
By the way, how exactly is the party paying "Penalty to obtain temporary IEC", underwhich para of the Foreign Trade Policy and HandBook (Vol. 1) are these terms referred to?

[rajpaldular]

Question: If an exporter, sitting in India, despatching some goods from Thailand (Consignee) to Japan (Consignee), how does the exporter receive payment from Japan?

Answer: Para 14 of RBI's Master Circular No. 08/2007-08 dated 02.07.2007 dealing with "MERCHANTING TRADE". This para permits the type of transactions you have described, subject to following conditions:

1) The authorised dealer (AD) should take the necessary precautions in handling bonafide transactions, or intermediary trade transactions, and ensure that the goods involved in the transactions are permitted to be imported into India, all rules and regulations and directions applicable to export (except EXPORT DECLARATION FORM) AND IMPORT (except BILL OF ENTRY) are compiled with for the export and import leg, respectively.
2) The entire merchant trade transaction is completed within a period of six months.
3) The transactions do not involve foreign exchange outlay for a period exceeding 3 months.
4) The payment is received in time for the export leg.
5) Where the payment for the export leg of the transaction precedes the payment for the import leg, the AD banks should ensure that the terms of payment are such that the liability for import leg of the transaction is extinguished by the payment received for the export leg of the transaction without any delay.
6) Short-term credit, either by way of supplier's credit,or buyer's credit, is not available for merchanting trade, or intermediary trade transaction.

[rajpaldular]

If you are a importer then you have two options to clear the goods from custom house. First is to appoint a C.H.A. (Custom House Agent) he will do all custom & port procedures on behalf of you, secondly You can do the clearance yourself by registering your Firm/Company with concerned Custom House.
There are 3 type of BILL OF ENTRIES :- 1) Home Consumption, 2) Warehouse, & 3) Ex-Bond.
A) If Second hand machinery is importing then CHARTERED ENGINEERING CERTIFICATE required.
B) If food stuff items importing then P.H.O. Certificate required.
C) If Logs (Teak Logs) importing then PHYTHO Certificate required.
D) If H.R. Coils/Plates importing then MILL CERTIFICATE required.
E) If you importing Different types of Goods in that case Appraiser assess the B/E (BILL OF ENTRY) provisionaly assesed due to pending TEST REPORT and Custom hold 20% goods for test reports.

If you are new in this field and you want to do all custom formalities yourself then I let you know some tips to be folowed as under below mentioned:-

1) Register your Company/Firm with concern Custom House.
2) Register your Company/Firm with Concern Port.
3) Submit the documents (Invoice packing List, Certificate of Origin, copy of Insurance, copy of original B/L (Bill of Lading) and other related certificates at C.M.C.
4) Take check list from CMC & check it.
5) On submitting Check List, take BILL OF ENTRY NUMBER from C.M.C.
6) Take Examination Order from Appraiser.
7) Register the Goods with E.D.I.(Electronic Data Information) system.
8) Examine the goods as per instructed by Appraiser.
9) Put the Examination Report in E.D.I. SYSTEM.
10) Approval of Superientendent & A.C. (Assistant Commissioner)
11) Assess the B/E (Bill of Entry) with Appraiser.
12) Audit the B/E with Auditor.
13) Take approval of final assesment from A.C.
14) Take TR-6 Print from CMC
15) Make the duty payment in Bank.
16) Take Out of Charge from Superientendent (from Concern Dock)
17) Then take delivery of goods.
Note:- Above procedures be carried out in case of FIRST CHECK.

In case of 2nd Check then ASSESSMENT will be carried out first.
Secondly Custom examinations will be caried out.

[rajpaldular]

If you are a Exporter then same you have two options to clear the goods from Custom House. First is to appoint a CHA (Custom House Agent) he will do all custom & port procedures on behalf of you secondly you can do the clearance yourself by registering your Firm/Company with concerned Custom House.

Type of Shipping Bills:-

1) O.G.L. (OPEN GENERAL LICENCE)
2) D.E.P.B. (DUTY ENTITLEMENT PASS BOOK)
3) D.B.K. (DRAW BACK)

If you are new in this field and you want to do all custom formalities yourself then I let you know some tips to be followed as under below mentioned:-
1) Register your Company/Firm With Custom House & Port.
2) Submit the documents at CMC (Invoice, Packing List, S.D.F. DECLARATION) for data entry in E.D.I. SYSTEM.
3) Take check list from C.M.C. and check it.
4) Submit the Check List at C.M.C. and take SHIPPING BILL NUMBER.
5) Assessment from Supdt. and Appraiser.
6) Final Assesment from A.C./D.C.
7) Then goods registration from Preventive Officer in Docks.
8) Examination Report by P.O.
9) Let Export from Suptd.
10) Take Shipping Bill Print from C.M.C.
11) Take permission from Suptd. for Container Stuffing.
12) After Stuffing put the stuffing report in E.D.I. SYSTEM.

Note:-
1) If Shipping Bill is under D.E.P.B. SCHEME then submit the DEPB declaration.
2) If Shipping Bill is under D.B.K. SCHEME then sumbit the draw back declaration.

[brahmtewatia]

tks rajpal ji for the valuable info. tht u r pouring in.

i'm not reading all this :p ... but surely wud do so, if the need arise. at least i know tht this info. is available here incl. mr. rajpal dular :D:D

[rajpaldular]

QUESTION: An exporter would like to export various brands of beer to Singapore. He is, however, not a manufacturer, but a trading exporter.
What are the formalities involved?

Answer: The exporter must have IEC [IMPORT EXPORT CODE] and RCMC Registration. He must also be registered with the Central Excise authorities.
The Singapore buyer may require some documents which will be notified is his purchase order.
Space constraints limit explanation of lengthy procedural details in this column.

[rajpaldular]

Question: For import of consignments under duty payment from China and re-export to any port, is it possible to claim duty drawback under section 74 ? The shipments are under free of cost (FOC) basis.

Answer: The RBI's Master Circular No. 08/2007-08 dated 02.07.2007 may not permit to make such FOC transactions. For Section 74 benefits, realisation of export proceeds is necessary.

[rajpaldular]

Question: One regular exporter to different countries and claim export benefits under the Focus Market Scheme for 2006-07. Now, as per the requirementof the scheme ((Foreign Trade policy and Procedures), one proof of landing of the export consignment is necessary (Sr.No.i to vi). But he don't have any proof of landing, except their B/L (Bill of Lading), Shipping Bill and Bank Realisation Certificate.
Now , as per the document, is there any physical proof possible? And, is there any method to sort out this problem.

Answer: Some of the exporters in Mumbai who avail of duty-free credit under this scheme produce the carriers's certificate confirming the unloading of export-cargo at the port of discharge. Such a certificate has been accepted by the Joint DGFT (Director General of Foriegn Trade), Mumbai, as a document evidencing the landing of the export cargo at the destination.

[rajpaldular]

Question : One Carpet Exporter have an order from Benin, in West Africa.The Buyer agreed to 100 percent T.T. (Telex Transfer) payment, but buyer asked that to issue a revenue transfer monitoring authority (RTMA) certificate.This was because his country's laws state that no importer can remit payment without a RTMA certificate showing that non-indigenous goods were imported.

Answer : It is the duty of the foreign buyer to get all such import documentations/certifications. The indian seller need not bother about them under incoterms 2000.

[rajpaldular]

Question : An Indian who is a technology advisor for an European company that wants to start a branch office in India.
This company wishes to import in bulk and sell in small quantities to local industrial units.
Can the company take partial delivery from the Customs bonded ware house?

Answer : The foreign company's Indian branch must first obtain an importer exporter code (IEC) number and register with Reserve Bank of India (RBI).

It can that import in bulk and warehouse the consignment under bond with the permission of the Customs.

As per its requirements, it can take partial deliveries from the warehouse.
There is nothing in the Foreign Trade Policy, Customs Law and Exchange Control Regulations that say such transactions cannot be done.

However, they are subject to conditions laid down in the Customs notifications.

[JitendraK]

Great input mr. Dular, my company is working in SEZ and definitely if i would be needed some help regarding customs definitely would get in touch with you. thanks a ton for your dedication to our society.

[rajpaldular]

Great input mr. Dular, my company is working in SEZ and definitely if i would be needed some help regarding customs definitely would get in touch with you. thanks a ton for your dedication to our society.

Thank you very much. I will be happy if I make Jat people sucess in their business.

[rajpaldular]

Question : One Importer wants to import Cellular Phones from China. Is this allowed duty-free?

Answer : Cellular phones fall under ITC (HS) Classification No. 8520. The basic Customs duty is "Free". CVD/EC/SAD are levied. The effictive rate of duty works out to 19.34 per cent (CVD 14.32+0.43 per cent EC + 4.59 SAD).

[rajpaldular]

Question : One importer wants to Import second-hand computers and laptops from the U.S.A., Via Nhava Sheve Port, Mumbai. Can he does so, or is there a penalty on it?

Answer : Your attention is drawn to para 2.17 of the Foriegn Trade Policy which,inter-alia states as follows:

"However second-hand personal computers/laptops, photo-copier machines,air conditioners, diesel generating sets will only be allowed against a licence."

"Import of re-manufactured goods shall be allowed only against a licence."

Second-hand computers and laptops are, therefore, not freely importable items.

In case any importer wants to import them, he will first have to obtain a licence. One of the conditions in the licence may be that actual user conditions will be applicable on such imported goods.

[rajpaldular]

Hello Rajpal Bhai, This is ABC. I was reading your export-import advice on JATLAND website. It is co-incidence that today only i was looking answers to few questions about importing second hand machine in India and i found your thread on jatland. Now i need your help to give me clear picture about this issue.
I am located in Canada. I am into import business of machine parts from India. Now i want to send few(VMC and conventional machines) machines to one my supplier in India. We are not having any kind of partnership or tie up.Could you please explain me what is procedure to finish this task in most effieceint way . What paperwork should be done to reduce custom hasselle in India.
I look forward for your advice.
Thanks
ABC

REPLY:

Dear Mr. ABC,

First of all I am thankful to you that you choose me as a advisor regarding import query.
Please note that the following documents are required to import the second hand machinery:-

1) Chartered Engineering Certificate (Must be Government Authorised).
2) Manufacturing year alongwith Model number and Product number should be mentioned on machine.
3) Terms of payment.
4) Shipment is to be made on O.G.L. (Open General Licence) basis.
5) Invoice, Packing List and Certificate of Origin (If Insurance concerned then Insurance polciy is required)

Note:- What is your payment terms & conditions? If payment through bank then L.C. will be open by you at Canada.

One more thing for the clearance of your import consignment at Canada you must check that what type of documents required by Canada Customs.


If any need more information please write me without hesitation.
thanks


Rajpal Dular

[rajpaldular]

A mail received from Canada from ABC:

Thanks Rajpal, i really appreciate your quick reply.
1)Charted engineering certificate should be from origin (canada) or destination(india).what is this certifacte all about. and if it done in india how much are usual exepense.
2)what happens if manufacturing detail or tag is not on machine as some are quite old 15-20years.
3)Term of payment will against proforma invoice or net 30 days( as payment is not issue to good relation).
4) As we have bought these machine in Canada but these might have manufactured somewhere else so can we put country of origin as canada.
5)Can there be issue with customs in india about invoice amount as all machines were bought in auction and are not that expensive as compared to new??
6) How much is import duty on machines???
7) What do you do yourself and where are you located at???
8) As you mentioned shipment should be made on OGL basis. I should be concerned or importer should be concerned about this aspect. if i am concerned on which document should i put.
9)What content should be in description column of invoice and packing slip helps??

i hope i am not bothering too much.
Looking forward for your valuable reply.
ABC

************************************************** ***

1)Charted engineering certificate should be from origin (canada) or destination(india).what is this certifacte all about. and if it done in india how much are usual exepense.
answer: If you Export from Canada to India then C.E.C. will be required in India for the custom clearance but in Canada whats their procedures I don't know.

2)what happens if manufacturing detail or tag is not on machine as some are quite old 15-20years.
Answer:- If manufacturing details is not available then custom authorities create different type of problems.

3)Term of payment will against proforma invoice or net 30 days( as payment is not issue to good relation).


4) As we have bought these machine in Canada but these might have manufactured somewhere else so can we put country of origin as canada.
Answer : Yes you can put the country of origin Canada, but you take country of origin certificate from relatedd authority in Canada.

5)Can there be issue with customs in india about invoice amount as all machines were bought in auction and are not that expensive as compared to new??
Answer : Yes, but custom finalized the value as per value mentioned in Chartered Engineering Certificate, if the Engineering show low value in certificate then custom will finalized the value as per the custom depreciation rules.
6) How much is import duty on machines???
Answer : BCD 7.5% , CVD 14% , CESS 3% , E.CESS 3% , SAD 4% ON ASSESSABLE VALUE.

7) What do you do yourself and where are you located at???
Answer : We are engaged in clearance of import & export at Kandla port , Mundra port & Mumbai port also.
presently I am looking at Kandla & Mundra port, Gujarat and our offices are also Mumbai.

8) As you mentioned shipment should be made on OGL basis. I should be concerned or importer should be concerned about this aspect. if i am concerned on which document should i put.
Answer : If you export from India then you will put invoice, packing list, SDF declaration to your CHA and they will process it. If you required certificate of origin then your CHA will do it.

9)What content should be in description column of invoice and packing slip helps??
Answer : Which types of machinery you need to import/export and what are their uses then I will advise you.

[rajpaldular]

Question : We are planning to get an import - export code (IEC) number and import shoe materials (duties for many products are about 33 per cent) to increase our business.
If we take a licence in our name, could we get any duty savings?
If we import any textile lining material, we assume that the Customs insists on the Textile Committee report to be submitted. If we get test reports from our supplier, which labs are approved by the Customs so that our supplier can get the tests done in their labs, or any other lab abroad?

"ONE TRADER"


Answer : have you started an import/export business? Let me throw some light on your query.
You should have an IEC number to import and export goods. No import or export is permitted without IEC. So you must apply and obtain IEC from the office of the Regional Authority of the DGFT under whose jurisdiction your head office/registered office is located.
Exemption from payment of basic Customs duty, countervailing duty, education cess, special additional duty of Customs, anti-dumping and safeguarding duties can be availed of, if the import of inputs is made against Advance Authorisation/ Duty Free import Authorisation for use in the export product.
For availing of these benefits, you must also obtain Registration-cum-Membership Certificate (RCMC) from the the concerned Export Promotion Councils/Commodity Boards.
Such EPCs/Commodity Boards will provide you all the necessary guidance once you become a member.