Import Mgmt.

8/4/2019 Import Mgmt.

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Import Management


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Importance and Need for Imports

Import Policy

Sourcing the Imports

Customs Organisation

Customs Rules and Regulations

Customs ValuationAssessment

Agenda

Contd.


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Import of Technology

Project Import

Baggage Rules

Courier Imports

Re-import/Re-export

WarehousingDemands

Refunds

Agenda


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To meet domestic demand.

To meet demand of inputs for exports.

Import of essential commodities like petrol, wheat,

fertilizers etc.

To import defense requirements including arms and

ammunitions.

Import if technology prototypes and samplesTo maintain Balance of Imports and Exports


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Import Policy


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Import Policy

Now renamed as Foreign Trade Policy

Structure:

Foreign Trade PolicyHandbook of Procedures Vol. I

Handbook of Procedures Vol. II

ITC (HS) Classification of Export and Import items

Schedule of DEPB rates

Aayaat Niryaat FormComprehensive form, includes most of the applicationform.


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Import Tariff Structure

Harmonised System CodeUniversal up to 6 digit level.

To facilitate trade flow.

Analysis of trade statistics in a co-ordinated manner.

Indian Customs Tariff and Central Excise Tariff is fully alignedwith HS at the four and six digit level.

New HSN System have came into force w.e.f 01.01.2007.

Basic Customs DutyBased on the First schedule to the Customs Tariff Act (CTA),1975.


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Additional Duty of Customs [CVD]Normally charged @14%

Levied under Section 3(1) of CTA, 1975

Education CessCharged @ 2% on CVD and Aggregated Customs Duty [BCD+ CVD+Education Cess on CVD]

Levied under Section 91-94 of the Finance Bill 2004

Secondary and Higher Education cessCharged @1% on CVD and Aggregated Customs Duty

Levied under Section 126, 128 and 129 of the Finance Bill 2007 (Announcedin Budget 2007 08)

Special CVDCharged @ 4%

Levied under Section 3(5) of CTA, 1975


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Preferential DutyApplicable on imports from Preferential areasSeychelles, Mauritius and Tonga only are notified in thePreferential Areas category.

Exemption NotificationsThe schedule rate of basic duty is exempted by a notificationissued under Section 25(i) of the Customs act, 1962.

Ant-dumping and Safeguard DutiesLevied under Section 9A and 9B of CTA 1975.

A National Calamity Duty (NCD) on tobacco products, motorspirit, polyester filament yarn, motor vehicles and two wheelers.


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MRP Based Countervailing DutyIn this the retail value marked on the package after standardabatement is used to arrive the value at which the duty is tobe charged.

CVD (Countervailing duty) of Sales TaxUnder Section 3(5) of Customs Tariff Act (CTA), 1975

The new tax is currently applicable on zero duty items under

217 lines of the ITA (Information Technology Agreement).


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Additional Duties under Section 3 of Customs TariffAct (CTA), 1975Duties apart from the main duty under Central Excise Act,1944 are also levied as additional duties of customs ongoods covered by the respective main Act. Some of them are

listed below The Agricultural Produce Cess Act, 1940.

The Coffee Act, 1942.

The Rubber Act, 1947.

The Industries (Development and Regulation) Act,1951

The Salt Cess Act, 1953

The Tea Act, 1953

The Medicinal and Toilet Preparations (Excise Duties)Act, 1955.


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Sr. No. Particulars Amount in Rs.1 Basic Cost (A) AV 100.00

2 Basic Customs Duty (B) 10.00

(A + B) = C 110.00

3 Rate of Excise (CVD) (a) 15.4

4 Rate of Education cess 2% on CVD (b) 0.308

Rate of High & Sec. Edu. Cess 1% on CVD (b1) 0.154

5 Rate of Excise cess (Additional Duty) (a+b+b1) =D 15.862

(C+D) Total 125.862

6 Total Customs Duty 25.862

7 Edu. Cess 2% on Total Customs Duty 0.51724

8 Higher & Sec. Cess @ 1% on Total Customs Duty 0.25862

9 Total Customs Duty Incl. Cess 26.63786

10 126.63786

11 Additional Customs Duty @4% 5.0655144

12 Grand DutyTotal After Adding Cus. Duty @ 4% 31.7033


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Bound RatesThe bound rates are rates bound by WTO. The only way toforce the implementation is through the WTO disputesettlement system which operates between Governments

only.

Non-Tariff Barriers:The main NTBs areAgri Permit Agricultural Permit

PSC Phyto sanitary certificate

BIS Bureau of Indian Standards Quality Certificate


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PRELIMINARIES FOR STARTING IMPORT BUSINESSIt involves the following:

Selecting the commodities.

Selecting the Overseas supplier.Capability and credit-worthiness of the supplier.

Role of Overseas Suppliers agents in India.

Finalising the terms of import.

Mode of Pricing and INCO terms.

Mode of settlement of payment.

Currency of invoicing.


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SELECTING THE COMMODITIESProper selection of the commodity will depend upon variouscommercial and legal considerations such as

Whether item to be imported is freely permissible or

restricted/prohibited/subject to State Trading Enterprisesregime etc.


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SELECTING THE OVERSEAS SUPPLIERTo identify the market for importing selected items one needto take into account the following facts

Every country does not produce/supply the concerned

item(s).Even if the item(s) is / are available, it may not be pricedcompetitively, of the required quality / standards andavailable in desired quantity.

Exporting countrys law / regulations may not permit

export to India.There could be trade barriers.

The import licence may not allow import from thatparticular country.


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SELECTING THE OVERSEAS SUPPLIERThe information regarding overseas suppliers can generallybe obtained from the following sources :

Trade directories and yellow pages

Consulate Generals and trade representatives of variouscountries in India and abroad.

Friends and relatives in foreign countries.

International trade fairs and exhibitions for which youmay contact International Trade Promotion Organisation(ITPO)

Chambers of Commerce, trade associationsIndenting agents of foreign suppliers

Advertisement in foreign papers

Publications etc.

Internet


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SELECTING THE OVERSEAS SUPPLIERA few considerations in selection of a market for import arediscussed here.

a. Political Embargo

b. Restricted Trade

c. Location

d. Product Quality Standards

e. Mass Consumption Items


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CAPABILITY AND CREDITWORTHINESS OF OVERSEASSUPPLIER

Confidential reports about the supplier may be obtainedthrough the banks and Indian embassies abroad.

The importer can also take the assistance of CreditInformation Agencies for specific commercial information onoverseas suppliers.

They may also contact Trade Information Centres of thecountry concerned.


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ROLE OF OVERSEAS SUPPLIERS AGENTS IN INDIAProcures orders from the Indian parties and arrange for thesupply of goods from their principal abroad.

Advisable as they can be readily contacted in case of anydifficulty with regard to quality of goods, payment anddocumentation etc.


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FINALISING THE TERMS OF IMPORTCall for samples, catalogues, literature, specification of the itemsbefore finalizing the terms of Import Order.

The different aspects of an import contract are enumerated asunder:

Product, Standards and specifications.

Quantity.

Inspection.

Total value of the Contract.

Terms of Delivery.

Taxes, Duties and Charges.

Period of Delivery/Shipment.

Packing, Labelling and Marking.

Contd..


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Terms of Payment-Amount, Mode & Currency

Discounts and Commissions.

Licences and Permits.

Insurance.

Documentary Requirements.Guarantee.

Force Majeure or Excuse for Non- performance ofcontract.

Remedies

Arbitration


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MODE OF SETTLEMENT OF PAYMENTThe import transactions are generally settled by anyof the following payment modes-

Advance Payment.

Payment/Acceptance against Documentary collections.Payment under Letter of Credit.

Selection of mode will depend on the followingfactors

credit worthiness of the importer/exporter,demand for the commodity in the international market,

exchange control regulations prevailing in theimporting/exporting countries and other relevantfactors.


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CURRENCY OF INVOICINGImporter has to complete all transactions with the bank inIndia in rupees only irrespective of the currency of theinvoicing (except where the payment is from the foreign

currency accounts as per RBI regulations).

Depending upon the relative strength of the foreigncurrency, one may choose to negotiate with the supplier toinvoice goods in foreign currency or in Indian rupees.


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The main functions/activities of the Customs

Organisation are:

Collection of duties of customs on import and export goods,including cesses, if any, in terms of Customs Act, 1962 read

with the Customs Tariff Act, Finance Acts and other statutesempowering levy of cesses/taxes;

Enforcement of prohibitions and restrictions, if any, beforeallowing import into, or export out of, the country in termsof various allied Acts/Laws such as Foreign Trade

(Development & Regulation) Act, 1992, etc.Prevention of smuggling;

Collection of foreign trade and revenue statistics.


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ORGANIZATION CHARTMinister of FinanceSecretary Finance

Secretary Revenue SecretaryExpenditureCBDT Central Board of Excise & Customs

Central Excise Customs

Appraising Preventive

Air Sea Appealsand


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STRUCTURE OF CUSTOMS DEPARTMENTMinister of FinanceSecretary Revenue

Central Board of Excise & CustomsCommissionerates of Customs

Mumbai Kolkatta Chennai Bangalore Delhi, etc.

Principal Commissioner of CustomsCommissioner

Imp Prev.ppealsdj.Exp Admn.

Asst. CommissionerAppraiser Staff

Addl./ Jt. Commissioner /Dy. Commissioner


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Organisational SetupThe Customs Houses are directly controlled by the Secretary,Department of Revenue in the Ministry of Finance through aHeadquarters Organisation called Central Board of Exciseand Customs. Each major Custom House is divided broadly

into following departments :Appraising Department (both import and export andpostal appraising);

Prevention Department (including function of clearanceof passengers at the international airports);

Drawback department;Audit department;

Ancillary departments including Import Noting, Bond,Statistical, Establishment Department, PRO, etc.,

Chemical laboratory.


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Docks - The basic function of the Dock AppraisingStaff is to carry out necessary examination and

checks including checking the classification and

value.

Cargo Complex Import by Air


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List of main Acts, Rules and Regulations under CustomsCUSTOMS ACT, 1962

CUSTOMS TARIFF ACT, 1975

COMPUTERS (ADDITIONAL DUTY) RULES, 2004

CUSTOMS (IMPORT OF GOODS AT CONCESSIONAL RATE OF DUTYFOR MANUFACTURE OF EXCISABLE GOODS) RULES, 1996

RE-EXPORT OF IMPORTED GOODS (DRAWBACK OF CUSTOMS DUTIES)RULES, 1995

CUSTOMS (PROVISIONAL DUTY ASSESSMENT) REGULATIONS, 1963

CUSTOMS AND CENTRAL EXCISE DUTIES DRAWBACK RULES, 1995

CEGAT (COUNTERVAILING DUTY AND ANTI-DUMPING DUTY)PROCEDURE RULES, 1996

BILL OF ENTRY (FORMS) REGULATIONS, 1976

BILL OF ENTRY (ELECTRONIC DECLARATION) REGULATIONS, 1995

UNCLEARED GOODS (BILL OF ENTRY) REGULATIONS, 1972


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List of main Acts, Rules and Regulations under Customs

COURIER IMPORTS AND EXPORTS (CLEARANCE) REGULATIONS, 1998

CUSTOMS HOUSE AGENTS LICENSING REGULATIONS, 2004

CUSTOMS REFUND APPLICATION (FORM) REGULATIONS, 1995CUSTOMS VALUATION (DETERMINATION OF PRICE OF IMPORTEDGOODS) RULES, 1988

BAGGAGE RULES, 1998

PROJECT IMPORTS REGULATIONS,1986

CUSTOMS (ADVANCE RULINGS) RULES, 2002IMPORT MANIFEST (AIRCRAFT) REGULATIONS, 1976

IMPORT MANIFEST (VESSELS) REGULATIONS, 1971

CUSTOMS (SETTLEMENT OF CASES) RULES, 1999


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Customs Valuation


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Valuation and Assessment

Valuation refers to the true value of consignment

Assessment refers to the basis for charging importduties.

Why it is necessary to establish standard practices forvaluation and assessment of goods

In international Trade Values are different and based oninternal-external factors.

To ensure that there is uniformity in approach at differentCustoms formations.

To avoid any ambiguity.

To assure that goods are not undervalued and appropriateduty is paid on importation.


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Statutory Provisions that determineValuationCustoms Act, 1962 [CA, 1962]

Section 2 (41)-Defines the term Value

Section 14-Valuation of goods for purpose of assessment

Customs Valuation (Determination of Price ofImported Goods) Rules, 1944. [Valuation Rules]

Transaction Value

Invoice Value


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Customs Valuation

The rates of customs duties leviable on imported goods (&

export items in certain cases) are either

specific (fixed) or

ad valorem basis or

at times specific cum ad valorem.

When customs duties are levied at ad valorem rates, i.e.,

depending upon its value, it becomes essential to lay down in

the law itself the broad guidelines for such valuation to avoid

arbitrariness.

Section 14 of the Customs Act, 1962 lays down the basis forvaluation of import & export goods in the country.


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Valuation where Tariff Value is fixedu/s. 14 (2) of the Customs Act, 1962.(2) Notwithstanding anything contained in sub-

section (7), if the Board is satisfied that it isnecessary or expedient so to do, it may, bynotification in the Official Gazette, fix tariff values

for any class of imported goods or export goods,having regards to the trend of value of such or likegoods, and where any such tariff values are fixed,the duty shall be chargeable with reference to such

tariff value.

(as amended in the Finance Bill 2007)


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Valuation of Imported/Export Goodswhere no Tariff Values are fixedSection 2(41) of the Customs Act, 1962 defines Valuein relation to any goods to mean the value thereofdetermined in accordance with the provisions of sub-section (1) of Section (3) of Section 14 thereof..(as amended in the Finance Bill 2007)

Sub-section (1) of Section 14 in turn states that For thepurpose of the customs tariff act 1975 or any other lawfor the time being in force, the value of the imported

goods and export goods shall be the transaction valueof such goods as determined in accordance with therules made in this behalf.


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Valuation of Imported/Export Goodswhere no Tariff Values are fixedProvided that such transaction value in the case of imported goods

shall include, in the price actually paid or payable for the goods

when sold for export to India, any amount that the buyer is liable

to pay for costs and services, including commissions and

brokerage, assists, engineering, designee work, royalties andlicenses fees, cost of transportation to the place of importation

insurance and handling charges:

Provided further that such price shall be calculated with referenceto the rate of exchange as in force on the date on which bill of

entry is presented under section 46 or a shipping bill or bill of

export as the case may be is presented under section 50.


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Customs Valuation

The provisions of sub-section (1) of Section 14 followthe provisions contained in Article VII of GATT.

The Customs Valuation Rules closely follow the WTO

Customs Valuation Agreement to implement ArticleVII of GATT.

The importer is required totruthfully declare the value in the B/E

provide a copy of the invoice

file a valuation declaration in the prescribed form to facilitatecorrect and expeditious determination of value forassessment purposes.


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Transaction Value

Transaction Value: is the price actually paid orpayable (when the payment is deferred). It should

fulfill the following three conditions :-

It should be the price at the time (or date) of importation.The date of contract between the buyer and the seller is notthe relevant date though the contract may have a bearing ingoverning the inter se relationship between the two.

It should be the price at the place of importation.

It should be the price at which such or like goods areordinarily sold. The word ordinarily implies the exclusion ofextraordinary or special circumstances which have nowbeen statutorily particularized in Valuation Rule 4 (2).


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Transaction Value

Dutiable Factors:The value, apportioned as appropriate, of the following goodsand services where supplied directly or indirectly by the buyerfree of charge or at reduced cost for use in connection with theproduction and sale for export of the imported goods, to theextent that such value has not been included in the price actuallypaid or payable:-

Commissions and brokerage, except buying commissions;

The cost of containers which are treated as being one for Customspurposes with the goods in question;

The cost of packing whether for labour or materials;


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Transaction Value

material, components, parts and similar items incorporated inthe imported goods;

tools, dies, moulds and similar items used in the productionof the imported goods;

materials consumed in the imported goods;

engineering, developing, artwork, design work, and plans and

sketches undertaken elsewhere than in the importing countryand necessary for the production of imported goods;

Advance payments;


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Transaction ValueRoyalties and license fees related to goods being valued that the

buyer must pay either directly or indirectly, as a condition of sale ofthe goods being valued, to the extent that such royalties and feesare not included in the price actually paid or payable;

The value of any part of the proceeds of any subsequent resale,disposal or use of the goods that accrues directly or indirectly to the

seller;

Freight charges up to the place of importation;

(i) For Air Cargo : Actual air freight, butnot exceeding 20% ofFOB value

(ii) Where actual sea/air freight : 20% of FOB valueis not ascertainable


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Transaction Value

Loading, unloading and handling charges associated withtransporting the goods;

Insurance.

Where actual insurance is not : 1.125% of FOB valueascertainable


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Transaction Value

Non-dutiable Factors:The following charges provided they are separatelydeclared in the commercial invoice:-

Interest charges for deferred payment;

Post-importation charges (e.g. inland transportationcharges, installation or erection charges, etc.);

Duties and taxes payable in the importing country.


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Date of Determination of Rate of Duty

The rate as in force on the date of presentation of bill

of entry for home consumption will be the rate

applicable.

This is because the Exchange Rates, Rates of Duty

and Tariff value keep changing.


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Two exceptions so far as rate of duty and tariff valueare concerned1. In case the bill of entry has been filed in advance of entry

inwards of the vessel or the arrival of the aircraft, the crucial

date will be the date of entry inwards of the vessel or thedate of arrival of the aircraft.

2. In the case of clearance of goods from a bonded warehouse,the date of presentation of the ex-bond bill of entry for

home consumption is the crucial date provided the goodsare removed during the permitted warehousing period(including extension allowed, if any).


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As regards exchange rate, the rate notified by theBoard and as in force on the date of presentation of

the bill of entry (for home consumption or for

warehousing) will be the one applicable.

V l ti f I t d d i f


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Valuation of Imported goods in case ofRelated Party TransactionSub-rule 2 of Rule 2 of Customs Valuation Rules, 1988 has

enumerated the persons who shall be deemed to be "related".

Sub-Rule 3 of Rule 4 provides that where buyer and seller are

related, the transaction value can be accepted

If the examination of circumstances of the sale of the importedgoods indicate that the relationship did not influence the price or

or

If the importer demonstrates that the declared value of the goods

being valued, closely approximate to one of the test values namelytransaction value of identical/similar goods, deductive value foridentical/similar goods or computed value for identical/similargoods ascertained at or about the same time.

Valuation of Imported goods in case of


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Valuation of Imported goods in case ofRelated Party TransactionThe related party transactions are examined by SpecialValuation Branches located at four major Custom Housesnamely Mumbai, Kolkata, Chennai & Delhi.

The guidelines for examination of the circumstances of thesale of the imported goods in case of related parties havebeen laid down vide Ministrys Circular No.11/2001-Cus.,dated 23.2.2001.

The circular provides a questionnaire to be filled up and a listof documents to be furnished and the same could be studiedfor ensuring timely action by concerned importers so thatfinalisation of provisional assessments is expedited.


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Assessment


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Assessment

Assessment is necessarily done for determining

the value of cargo for the purpose of calculating duty

and

checking classification of product from the point of

permissibility of import.

For the purpose of assessment normally following

documents are submitted for clearance of goods

through customs:-

A.R.E.-1/2 Form of Central

Excise

Bill of Lading or Delivery

Order

vi.

G.R.I. Form/SDF/ PP

declaration

Insurance Memo/Policyv.

Export Inspection Agencys

Certificate

Country of Origin

Certificate

iv.

Export Lic./ Quota Certificate,

where necessary; PAN based

Business Identification Number

(BIN)

Import Licence, where

necessary

iii.

Invoice and Packing ListInvoice and Packing Listii.

Shipping BillBill of Entryi.

For ExportFor ImportSr. No.

A.R.E.-1/2 Form of Central

Excise

Bill of Lading or Delivery

Order

vi.

G.R.I. Form/SDF/ PP

declaration

Insurance Memo/Policyv.

Export Inspection Agencys

Certificate

Country of Origin

Certificate

iv.

Export Lic./ Quota Certificate,

where necessary; PAN based

Business Identification Number

(BIN)

Import Licence, where

necessary

iii.

Invoice and Packing ListInvoice and Packing Listii.

Shipping BillBill of Entryi.

For ExportFor ImportSr. No.


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Assessment

Tips for quicker assessment :-Where some goods are imported for the first time or theirtariff classification is not well established, or their prices havegone down considerably, importers are advised to keep

catalogue/literature regarding composition and functions ofthe goods and their prices ready with them before hand.Customs Officer may ask for it.


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Examination of Goods

Government of India has signed revised KYOTO

conventions on 4th of Nov. 2005. Under this the

examination would be based on risk involved and cargoes

are divided into 3 categories :-

1) Low risk,

2) Medium risk and

3) High risk

Similarly Govt. has introduced the Risk Management

System (RMS) of which Accredited Clients Programme

(ACP) is a major component.


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Examination of Goods

The objective of the programme is to grant assured

facilitation to importers.

With the implementation of the Risk Management System,this programme will replace all existing schemes for

facilitation in the sites where RMS is implemented.

The goal of the Risk Management System (RMS) is toenable the department to strike an appropriate balance

between trade facilitation and enforcement.


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Exemption under NotificationsFor variety of reasons Government decides to grant exemptionsfrom payment of duties subject to certain conditions.

These exemption could be product specific (end use), generalpurpose (R & D) or for export promotion (Advance Licence,

DFRC, etc.).

All these exemptions are granted in public interest keeping inmind the development of trade, modernization, upgradation oftechnology, promoting exports, facilitation, etc, etc.

The general exemptions are many in number and broadlycategorised into the following :-


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Exemption NotificationsImports by Privileged Persons, Organisations, Authorities andForeigners

Government Imports including for Defence and Police

Imports for Training, Educational, Research and Testing Purposes

Imports for Oil Exploration, National Programme, Exhibitions,

Seminars or ExpeditionsImports for Handicapped Persons, Charitable or Social WelfarePurpose

Donations and Gifts

Sports Goods, Prizes, Medals and Trophies etc.

SamplesPackaging Materials, Durable Containers, Packages and Spare Bags

Medicines, Drugs, and Hospital Equipments, Instruments andApparatus


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Exemption NotificationsImport by Post or by AirImports from various Specified Countries or PreferentialAreas

Goods in Transit

Imports for Export Promotion; Export Processing Zones; 100%

Export Oriented Undertakings or Temporary ImportsSpecial Economic Zones

Imports against Advance Licence, Replenishment Licence orSelf Declared Pass Book

Re-import

Imports for Specific use in Industrial ProductionImport of Specified Articles

Effective Rates of Duty for Goods of VariousChapters/Headings

Miscellaneous


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Exemption NotificationsThe basic benefit against exemption notification is

exemption against payment of customs duty. The

exemption could be only of Basic Customs Duty or a

percentage of Basic Customs Duty or Basic CustomsDuty + Countervailing Duty etc.


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Import Against Different Schemes

Target Plus Scheme

Served from India Scheme

Advance Authorisation

Duty Free Replenishment Certificate

Duty Entitlement Passbook Scheme

Drawback of Customs/Excise Duties

Imports for repair, jobbing, etc.

Export Promotion Capital Goods SchemeSetting up of units as EOUs / EHTPs / STPs / BTPs

Setting up of units in SEZs


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Determinants :Nature of Product - Whether the new technology will be easilyadaptable.

Price of TechnologyWhether the price paid for technology transfer is

justifiable or not,

whether it is worth and necessary to bring in newtechnology in the home market.

Contd.


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Cost of Technology What costs it will add to the operations,

whether such costs can be absorbed in the pricing of theproducts manufactured,

what impact it will have on the overall operations of thecompany, costs related to absorption of technology,additional training costs etc. are to be considered.

Contd.


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Level of TechnologyWhether technology is fully automated or semi-automatic,

whether it is of first generation or advanced technology,

whether the environment is conducive to accept higherlevel of technology,

is it going to replace old machineries and techniques and

whether it would be subject to becoming obsolete, if yes

then within which period .

Contd..


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Existing level of Technology - whether it impacts manpowerrequirement, compliance with IT needs, etc.

Local demand for the product - whether enhanced productionmatches with the local demand. Such mismatch would haveimplications on commercial viability.

Country of import of technology - Track record, technologydevelopment, emphasis on R&D, etc to determine quality oftechnology.


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Modes of Import of TechnologyDrawings and Design

Import of Drawings and Designs are used for transfer ofconcepts.

CustomsTariffHeading

Description Duty Structure

4906 00 00 PLANS AND DRAWINGS FOR

ARCHITECTURAL,

ENGINEERING,

INDUSTRIAL, COMMERCIAL,

TOPOGRAPHICAL ORSIMILAR PURPOSES, BEING

ORIGINALS DRAWN BY

HAND; HAND-WRITTEN

TEXTS; PHOTOGRAPHIC

REPRODUCTIONS ONSENSITISED PAPER AND

CARBON COPIES OF THE

FOREGOING

As such the duty structure is

12.5% BCD, 0% CVD and 4%

Special CVD.

However, ExemptionNotification No. 21/2002 Dtd.

01.03.2006 exempts from

payment of BCD.

Hence there is no import dutyis payable on importation of

Drawings and Designs. Since

both duties are exempted, 4%

Spl. CVD is not chargeable.


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Modes of Import of TechnologyForeign Collaboration AgreementForeign Collaboration on the other hand brings about foreigninvestment, capital goods, scientific technology and also

critical material.

Field for Foreign Collaboration:

Equity Investment

Import of Capital goods, Plant and Machinery,

Equipment and Raw Materials

Transfer of Scientific Technology

Import of Design and Drawings


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Project Import

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Project Imports

The Project Import Scheme is an Indian innovation to facilitatesetting up of and expansion of industrial projects.

The Project Import Scheme seeks to achieve the objective ofsimplifying the assessment in respect of import of capital goodsand all the related items required for setting up of a project bylevy of a flat rate of duty in respect of such goods.

This objective has been achieved by incorporating a heading98.01 under Chapter 98 of the Customs Tariff and prescribing a

uniform customs duty rate under this heading. All the goodsapproved for importation in connection with an industrial projectare classified under this heading. Goods classified under thisheading cannot be classified under any other heading which maycover the product more specifically.

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Project Imports

The different projects to which heading 98.01 applies are;irrigation project,power project,mining project, oil / mineral exploration projects, etc.

Such an assessment is also available for an industrial plantused in the process of manufacture of a commodity.

However this benefit is not available to hotels, hospitals,

photographic studios, photographic film processinglaboratories, photocopying studios, laundries, garages andworkshops. This benefit is also not available to a single orcomposite machine.

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Project Imports

Imports allowedmachinery,

prime movers,

instruments,

apparatus,

appliances,

control gear,

transmission equipment,

auxiliary equipment,

equipment required for

research and development

purposes,

equipment for testing and

quality control,

components,

raw materials for the

manufacture of above items,

etc.

In addition, raw material, spare parts, semifinished material, consumable

upto ten percent of the assessable value of goods can also be imported.

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Project Imports

The purposes for which such goods can be importedare for initial setting up or for substantialexpansion of a unit of the project.

The Central Government has formulated the ProjectImport Regulations (PIR) prescribing the procedure foreffecting imports under this scheme.

P j t I t


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Project Imports

Some of the projects notified under 98.01Port Mechanical Ore Handling Plant.

Salaya-Koyali Mathura Crude Oil Pipe Line Project

Bombay water Supply and Sewerage Project.

Mathura-Delhi-Ambala-Jullundur Product Pipeline Project.Operation Flood III Project of National Dairy DevelopmentBoard.

Bombay-Pune Product Pipeline Project.

Gas Pipeline Projects of the Gas Authority of India Ltd.

Pipeline Expansion Phse IIIA - Jorhat to Bongaigaon.


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Baggage Rules

B R l


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Baggage Rules

Baggage is an aspect of customs network through

which common man going abroad or returning from

abroad comes in contact with customs.

Under the general Baggage Rules,

(1) used personal effects and

(2) new articles upto a value of Rs. 12000/- per adult

passenger (Rs. 25000/- if the passenger returns to

India after more than three days) are exempt.

B R l


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Baggage Rules

A Lower Free Allowance of Rs. 6000/- is allowed to passengerscoming (after 3 days) from Nepal, Bhutan, Burma or China

provided they do not come across land borders with these

countries.

For child passengers (below 10 years of age), free allowance is

50% of the allowance admissible to an adult passenger of that

category.

The General Free Allowance of a passenger is not clubbable with

similar allowance of another passenger to permit clearance of a

costly article of baggage.

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Baggage Rules

Baggage RulesFree allowance is restricted in case of visits to contiguouscountries like Maldives, Sri Lanka, Nepal and Bhutan.

Baggage does not include motor vehicles, firearms andgoods of a commercial nature or in commercial quantities.

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Baggage Rules

Baggage RulesIn the case of passengers transferring their residence to Indiaafter stay abroad of2 years or more, personal and householdeffects in use abroad and six new specified householdgadgets are exempt from duty but 15% flat duty as to be paid

on 17 listed articles of consumer durables within value ceilingof Rs. 5 lakhs.

In case of transfer of residence after stay abroad ofat leastone year, other personal and household effects in use abroadand not exceeding Rs. 75000 in aggregate value can be

brought in free. In addition, there are free allowances ofvarying value for professional artisans coming to India after 3months/6 months (duty free household articles worth Rs.12000/- and professional equipment worth Rs.20000/40000/-).

Baggage R les


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Baggage Rules

Baggage RulesAllowance for gifts as well as for travel souvenirs in the caseof foreign tourists is Rs. 8000 (Rs. 6000 in the case of atourist of Pakistan origin), apart from personal effects in useof the tourist.

Passengers not carrying any dutiable goods can walk throughthe Green Channel. Others are required to come to the RedChannel and report at Customs Counter. There are now norestrictions on resale of baggage goods.

Baggage is governed by BAGGAGE RULES, 1998


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Courier Imports

Courier Imports


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Courier Imports

In case of imports by a registered courier service, rate of duty asapplicable to goods imported through any other means applies.The authorised courier must get himself registered with theconcerned Commissioner of Customs.

A simpler form of bill of entry has been devised for courierimports of (a) documents and (b) samples and free gifts (whichare exempt from duty fully upto the value limit of Rs. 10,000/).

The third category i.e. dutiable goods will be subject to thenormal procedure of assessment and if the consignee wishes toclaim modvat benefit, the normal bill of entry form should beused.

Courier Imports


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Courier Imports

Imports are governed by Courier Imports and Exports

(Clearance) Regulations, 1998. These regulations

shall not apply to-

the goods imported from the airports other than the customs

airports at Mumbai, Delhi, Chennai, Kolkata, Bangalore,Hyderabad, Ahmedabad, Jaipur, Trivandrum, Cochin and LandCustom Stations other than at Gojadanga and Petrapole inWest Bengal,

the goods where the weight of the individual package

exceeds 70kgs.the goods which require specific conditions to be fulfilledunder any other Act for the time being in force or any rule orregulation made thereunder.

Contd

Courier Imports


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Courier Imports

The following import goods require testing of samplesbefore their clearance:

animals and parts thereof, plants and parts thereof.

Perishables,

Publications containing maps depicting incorrectboundaries of India and

Precious and semi-precious stones, gold or silver in anyform


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Re-import/Re-export

Re import


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Re-import

When goods are re-imported?Rejects

Replacement of defective goods

Cancellation of order

After exhibition/display etc.Returned after use in particular project/contract andcompletion of the contract etc.

When Goods are sent for repairs, re-conditioning etc.

Goods which may have to be sent for special processes like

electroplating, polishing or coating and re-imported.

Re import


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Re-import

Import dutiesImport duties of Customs are leviable

No distinction is made whether

The goods being imported had discharged duties earlieror

They are being re-imported after exportation for particularpurposes.

Re import


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Re-import

Procedure for Re-importation is governed byrespective notifications issued by the Government.These notifications normally include provisions related to

Duty component on re-importation

Time period of re-importationExemption allowed, if any

Procedural aspects

Re export


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Re-export

When goods are re-exported?Import goods found defective or not fit for use.

After completion of contract or projects.

Exhibition etc.

Important AspectsSection 74 of the Customs Act, 1962 provides for grant of98% of the Customs duties leviable at the time of importation,

by way of Drawback if it is re-exported by the importer,subject to laid down conditions.

Re export


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Re-export

Goods have to be identified with the earlier importdocuments and duty payments to the satisfaction of

the Assistant Commissioner at the time of export.

If such goods have been used in India after

importation, refund is granted on a proportionate

basis under Notification No.19/65-Cus (NT) dated

6.2.1965. The table that prescribes rate of drawbackis under:

Sl.No

Length of period between the date ofclearance for home consumption and

Percentage of importduty to be paid as


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No. clearance for home consumption andthe date when the goods are placedunder Customs control for export.

duty to be paid asDrawback

(1) (2) (3)1. Not more than three months 95%

2. More than three months but not more

than six months

85%

3. More than six months but not morethan nine months 75%

4. More than nine months but not more

than twelve months

70%

5. More than twelve months but not more

than fifteen months

65%

6. More than fifteen months but not more

than eighteen months

60%

7. More than eighteen months but not

more than twenty-one months

55%Contd.

Sl Length of period between the date of Percentage of import


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Sl.No.

Length of period between the date ofclearance for home consumption andthe date when the goods are placed

under Customs control for export.

Percentage of importduty to be paid asDrawback

(1) (2) (3)

8. More than twenty-one months but not

more than twenty-four months

50%

9. More than twenty-four months but not

more than twenty-seven months

45%

10. More than twenty-seven months but

not more than thirty months

40%

11. More than thirty months but not more

than thirty- three months

35%

12. More than thirty-three months but not

more than thirty-six months

30%

13. More than thirty-six months NIL

Important Notifications


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CustomsNotification No.and Date

Subject

43/96-Cus.

Dtd. 23.07.1996

Exemption to specified goods exported from India

and re-imported after being subjected to specified

processes.

259/Cus.Dtd.

11.10.1958.

Exemption to re-import of challenge cups, ortrophies, won by Defence Units.

271/Cus.

Dtd.

25.10.1958.

Exemption to re-import by Armed Forces returning

from service abroad.

117/Cus.

Dtd.

13.10.1961.

Exemption to re-import of engines and parts of

aircraft.

p

Important Notifications


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26/Cus.

Dtd. 19.02.1962

Exemption to re-import of catering cabin

equipments, etc. by Indian Airlines.

174/cus.

Dtd. 24.09.1966

Exemption to re-import of private personal

property.

158/95-Cus.

Dtd. 14.11.1995

Exemption to re-import of Indian goods and

parts thereof (whether of Indian or foreign

manufacture) for repairs, reconditioning,remaking or similar other process.

241/cus.

Dtd. 04.11.1982

Exemption to re-import of goods sent for

execution of approved projects.

94/96-cus.Dtd. 16.12.1996

Exemption to re-import of goods exportedunder duty drawback rebate of duty or under

bond.

36/1995-Cus. (NT),

Dtd. 26.05.1995

RE-EXPORT OF IMPORTED GOODS (DRAWBACK

OF CUSTOMS DUTIES) RULES, 1995

p


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Warehousing

Warehousing


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Warehousing

The facility of warehousing of imported goods inCustoms Bonded Warehouses, without payment of

Customs duty otherwise leviable on import, is

permitted under the Customs Act, 1962.

Basically, goods after landing are permitted to be

removed to a warehouse without payment of duty and

duty is collected at the time of clearance of goodsfrom the warehouse.

Warehousing


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Warehousing

Important ProvisionsWarehousing Station

Warehouses are to be appointed at particular places only.

Customs under Section 58 can licence Private BondedWarehouses

Bonding of imported goods

Filing of Into-Bond Bill of Entry

Execution of Bond

Storage Period

Generally One year.

In case of EOUs it is 5 years for Capital Goods and 3 Yearsfor others.

Warehousing


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Warehousing

Important ProvisionsRate of Interest

Payment of Interest @15% p.a. after expiry in case ofEOUs.

In other cases it is @15% p.a. after expiry of ninety days.

Manufacture-in-Bond Operations

Manufacturing in bond is permissible under Section 65 ofCustoms Act. 1962.

Manufacture-in-bond operations are to be carried outunder Customs supervision on cost-recovery basis.

Warehousing


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Warehousing

Important ProvisionsRate of Duty/ Value for AssessmentThe rate of duty applicable is as per provisions of Section15 of the Customs Act i.e. on the date on which the goodsare actually removed from the warehouse.

However, when the warehousing period or the extendedwarehousing period has expired, the duty payable is withrespect to the date when the warehousing/extended

warehousing period expired and not the actual date ofremoval.

Warehousing


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Warehousing

Important ProvisionsExport of bonded goods:Warehoused goods can be exported without payment ofduty except Nepal and Bhutan.


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Demands

Demands


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Demands

Section 28 of the Customs Act, 1962 provides forrecovery of any duty

which has not been levied or

has been short levied or

erroneously refunded orif any interest payable has not been paid,

part paid or

erroneously refunded

provided a notice demanding such duties/interests isissued within the time limit specified in that Section.

Demands


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Demands

Causes and Time Limits for issuance of Demand Notice

Causes of issuance of DemandNotice

Actions taken

If the short levy is by reason ofcollusion or any willful

misstatements or suppression of

facts

Demand notice is to be issuedwithin 5 years from the relevant

date specified in Section 28.

Short levy is pointed out by Audit Show Cause Notice is issued and

15 days are given to show causewhy payment is not made

Audit objection, arising out of

assessment

To be finalized 6 months from the

date of issue of the demands

Demands


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Demands

Upon receipt of the reply from the Noticee the matteris examined in detail and the Noticee is offered an

opportunity of Personal Hearing to explain his case

before the adjudicating authority.

On the basis of the facts and personal hearing, the

adjudicating authority come to the conclusion after

taking into consideration the provisions of Law.


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Refunds

Refunds


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Refunds

The case of refund arises where duty has been paid inexcess of what was actually leviable on the goods.

Excess payment may bedue to lack of information on the part of importer/exporter or

non-submission of documents required for claim of lowervalue or

rate of duty.

due to shortage/short landing, pilferage of goods or evenincorrect assessment of duty by Customs.

Refunds


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Refunds

In such cases, refund of excess amount of duty paid can beclaimed by the importer or exporter.

If any excess interest has been paid by the importer/exporter onthe amount of duty paid in excess, its refund can also beclaimed.

Any person claiming refund of any duty or interest, has to makean application in duplicate in the form as prescribed in theCustoms Refund Application (Form) Regulations, 1995, to thejurisdictional Deputy/Assistant Commissioner of Customs.Such application is to be made before the expiry of six monthsfrom the date of payment of duty and interest.

Refunds


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Refunds

However, in case of any import made by anyindividual for his personal use or by Government or

by any educational, research or charitable institution

or hospital, application for refund can be made before

the expiry of one year from the date of payment of

duty and interest.

Vaibhav Nagarkar09423573973

E il b i


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Thank You

E-mail: [email protected]

Import Mgmt.

Documents