Imported goods must follow prescribed customs clearance procedures, including presenting a Bill of Entry with details such as description, value, quantity, and customs tariff heading. The Bill of Entry will be verified by a customs officer and may be reassessed if incorrect. Import declarations are usually checked based on documents and information without inspecting the goods. During clearance, customs inspects the goods to confirm declarations, but only after a risk level is determined by the Risk Management System. If no discrepancies are found, an “Out of Charge” order is issued and the goods can be cleared. For exports, a Shipping Bill and related documents must be presented for customs clearance, and if necessary, an “Let Export Order” is given after inspection of the goods.
The Import Procedure – Bill of Entry:
- Imported goods into the country must comply with relevant legal requirements and are subject to Customs duty, unless they are intended for transit or transshipment to another Customs station or outside India. In such cases, the transit procedure outlined in the Customs Act, 1962, must be followed, and no duty is payable. If the goods are for transshipment to another Customs station, the carrier and concerned agencies must follow the transshipment procedure, and the importer must complete the Customs clearance formalities after arrival. If the goods are transshipped to a port outside India, a simple procedure is prescribed and no duty is payable.
- Importers must clear goods for either home consumption or warehousing by filing a Bill of Entry in the form prescribed by the regulations. If electronic filing is not feasible, a paper-based entry can be allowed by the Principal Commissioner of Customs.
- An Importer-Export Code (IEC) number is mandatory for export/import activities and is allocated by the DGFT. Certain categories may be exempt and have permanent IEC numbers.
- The importer must file a cargo declaration for EDI system clearance, including the prescribed particulars required for processing the Bill of Entry.
- The importer or their authorized customs broker can file the declaration electronically through the service center or ICEGATE. The facility to upload scanned documents with the declaration is also available through the “e-Sanchit” program.
- CBIC has implemented Faceless Assessment on imports, which means that the assessment of Bills of Entry is done by an officer located remotely, not at the Customs station where the goods are presented for clearance.
Self-assessment of Imported and Export goods:
Section 17 of the Customs Act, 1962 requires that importers and exporters must self-assess the duty owed for their imported or exported goods when submitting their Bill of Entry or Shipping Bill. This involves declaring the correct classification, rate of duty, value, and any applicable exemption notifications.
The proper officer may verify the self-assessment at the discretion of the Risk Management Systems (RMS). Verification occurs selectively for high-risk consignments or for those importers with a history of compliance issues. If the self-assessment is incorrect, the proper officer may reassess the duty owed.
In cases where verification is required, the proper officer may order examination or testing of the goods, request additional information or documentation, and reassess the duty if the self-assessment is incorrect. If the importer or exporter requires a quick clearance but the goods cannot be reassessed quickly, the provisional assessment may be done with the provision of security by the importer or exporter to pay any deficiency between the provisional and final assessment.
In situations where the importer or exporter is unable to self-assess, they may request provisional assessment from the proper officer. The proper officer may require security for any deficiency between the provisional and final assessment.
Finally, it is mandatory for importers and exporters to declare the Standard Unit Quantity Code (UQC) for proper duty assessment and accurate trade statistics.
Prior Entry for Bill of Entry
To expedite the goods clearance process, Section 46 of the Customs Act, 1962 permits filing a Bill of Entry prior to the arrival of the goods. The Bill of Entry is considered valid if the vessel/aircraft carrying the goods arrives within 30 days of the date it was presented.
In cases where goods are transferred from a mother vessel to a smaller feeder vessel at intermediate ports (such as Colombo), the name of the mother vessel may be listed on the Bill of Entry filed in advance. Upon arrival of the feeder vessel, the Bill of Entry can be amended to include both the mother and feeder vessel names.
The Bill of Entry must be filed by the end of the next business day (excluding holidays) following the arrival of the aircraft, vessel, or vehicle carrying the goods at a customs station for home consumption or warehousing.
If the Bill of Entry is not filed within the timeframe specified, and the proper customs officer finds no sufficient cause for the delay, the importer may be liable to pay late presentation charges. The rate for the first three days of default is INR 5,000 per day, and INR 10,000 per day for each day of default thereafter.
The Customs Act, 1962 has undergone changes through the Finance Act, 2021 which aim to simplify the pre-arrival processing and assessment of Bills of Entry (BE) by requiring their advance filing. This amendment leads to a significant decrease in Customs clearance time. The new Section 46 mandates that importers file a BE before the end of the day before the arrival of the vessel/aircraft/vehicle carrying the imported goods at a Customs port/station where they will be cleared for home consumption or warehousing. The Bill of Entry (Electronic Integrated Declaration) Regulations, 2018 have been revised through Notification No.34/2021-Customs(N.T.), dated 29.03.2021, which sets different time limits for filing BE based on the mode of transport. It is important to note that the provision allowing BE to be presented up to 30 days prior to the expected arrival of the aircraft or vessel or vehicle remains in place, and with certain exceptions, the BE can now be filed anytime from 30 days prior to the expected arrival up to the end of the day before arrival.
Amendment in Bill of Entry:
Legitimate errors discovered after the submission of customs documents can be corrected through the amendment of the Bill of Entry with the approval of the Deputy or Assistant Commissioner. The Levy of Fees (Customs Documents) Amendment Regulations, 2017, specified in Notification No. 36/2017-Customs (N.T.) dated 04/11/2017, outlines the number of amendments that can be made upon payment of the specified fee.
Regarding requests for amendments under Section 149 of the Customs Act, 1962 that lead to reassessments, since the implementation of Faceless Assessment, there have been several requests to change the elements of assessment. This typically occurs when the importer realizes they forgot to claim an exemption or has new information, such as freight documents, that require changes. The procedures for reassessment in these cases are outlined in Circular No. 45/2020-Customs dated 10/12/2020.