Small business & Entrepreneurs can take advantage by learning the Import procedures and process from this Magazine. http://www.tradeflock.com provides end to end guidelines to import products from China. Read more articles at http://www.tradeflock.com

1. Our Platform |Your Growth
What must sellers know, be-
fore Import Cosmetics from
China?
What are Different
Shipping Methods?
Our Platform|Your Growth
www.tradeflock.com
Before Import Cosmetics from China?
What are Different
Shipping Methods?
What Must Sellers Know,
How to Import Cosmetics from China?

4. Editorial
Cosmetic Industry: Demand & Supply
Every Woman is known for their love for cosmetics and beauty products.
They can spend countless hours just examining shelf after shelf, counter after
counter before they actually make the purchase. This implies that each
woman has different taste, skin, need and choice. Therefore, to meet their
different requirements, there should be different types of products in the
market. But it is not possible for each country to provide a versatile
manufacturing unit to meet the requirement. So, to meet the demand they
Import as well as Export. Cosmetics are used to enhance their appearance
and make them attractive and adorn. Therefore, it is needless to say that a
cosmetic has an important place in woman’s life which makes them feel
confident and complete. Various studies and surveys have also proved that
cosmetics can make a great difference to the looks and appeal of a woman
that cannot be denied.Cosmetics have their own world and the concept of
cosmetic products and its use differs from country to country, from place to
place and above all, it varies from culture to culture. In the global cosmetic
industry, skin care products and fragrances take leading positions. Top
celebrities of the world are bringing out their individual cosmetic ranges and
they are becoming a craze in the market. Cosmetics are readily available in
the market in the form of creams, lipstick, perfumes, eyeshadows, nail
polishes, hair sprays etc.Personalities and artists have utilized makeup to
beat the harsh lights and the glare of camera flashes as they know the
importance of their looks and maintain them by using a variety of cosmetics.
Research has also shown that some cosmetic product manufacturers have
utilized the needs of people to protect themselves and their skin from the
rays of the sun which is a great achievement. Therefore, with more cosmetics
on the market today it becomes obvious to us that they play a great role in
our everyday life. Thus, it is the duty of the country government to balance
Demand with Supply.

5. Our Platform /Your Growth
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Neetu Agarwal
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Pawan Sharma
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Harsh Panchal
Daniel Anthony
Payal
Raymond
Thomas M.
Editor-in-Chief
Senior Editor
Managing Editor
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6. ImportCosmeticsfromChinaWhattoFindinthe
Manufacturer?
PRE-IMPORT PROCEDURE Prior Notice to Importing Country
6

7. Cosmetic Registration in India Can Importers, Private Label their
Cosmetics and Personal Care Products?
WhatistheCustoms
DutyinIndia?
Labeling Requirements in India
Shipping Documents to Import
Cosmetics from China
7

9. Import Cosmetics from China
A Complete Guide
on How to
Import
Cosmetics from
China
China is on pace to become the
world’s largest market and pro-
ducer for beauty products, with
burgeoning demand for premium
cosmetics that knows no borders.
Companies, retailers, and
investors are taking notice. China
is 10th largest market for U.S.
beauty products exports, with
U.S. products exports
totaling $345.3 million in 2015,
representing 3% of the total U.S.
export market. China market
has reached 200 billion Yuan
in 2011and becomes one of the
fastest developing markets with a
15% annual growth.
China’s cosmetics market
comprises mainly four major
segments: skincare, hair care,
color (make-up) and fragrance
(perfume). Combined, they
generate around 65-75% of the
total beauty products sales in
China while skincare being the
outstanding contributor to
revenue.
9

10. Sports Cosmetics: today, many consumers
who love sports and fitness pursuits are keen to
maintain an attractive appearance. They need s
ports cosmetics that can help prevent the loss of
moisture and are anti-odor, anti-sweat,
anti-bacterial, packaged in compact and portable
sizes.
Cosmeceuticals: consumers have a growing
awareness of products having to combine cosmetic
and pharmaceutical features, such as spot
lightening cream, acne treatment lotion, and acne
ointment.Green/natural cosmetics: containing
natural or nutritional ingredients, such as aloe,
vitamins, green tea and many herbs.
Perfumes, Toilet Waters, and
Fragrances: Finished perfumes and toilet
waters are a much promising product category in
beauty products.
Current Trends in China Market
Skin care Products: They are the fastest
growing sector in the cosmetics market and currently
China’s skincare products market is trending
towards the high-end.
Hair care Products: A market niche becoming
saturated, seeing growth decelerating.
Make-up Products: the market far from
saturated, particularly for enhancement items,
such as color correcting (CC) and blemish balm (BB)
cream but the market of eye make-up products has
recorded significant growth in recent years.
Products for Children: Child-specific products
are the fastest growing product category and sales of
products designed for use by children continue to soar.
Sunscreen Products: Sunscreens products help
ensure people will slow down their aging and also helps
them to protect from harmful sun rays.Anti-aging
products: cosmetic products that help consumers stay
youthful and fight aging is steadily increasing.
10

11. Selecting the Commodity: Importers should
select their beauty products as goods only
after considering various commercial factors
as well as regulations contained in the EXIM
Policy. Import of restricted cosmetic prod-
ucts is permitted only through licensing.
Selecting the Overseas Supplier: Importers
can Import Cosmetics from China and any
country of the world and the information
regarding the suppliers can be obtained from
various, generals, international trade fairs
and exhibitions and trade directories
Consulate chamber of commerce.
Capability and Creditworthiness of
Overseas Supplier: Successful completion
of the transaction of the imported beauty
products mainly depends upon of the
overseas supplier’s creditworthiness and
capability. Therefore, it is always necessary
to verify the Capacity of the supplier to
fulfill the contract through confidential
reports about him from the banks and Indian
embassies abroad.
Role of Overseas Suppliers Agents in
India: Some reputed and renowned overseas
suppliers have their agents stationed
everywhere. These agents take orders from
the firms/companies and arrange for the
supply of goods from their principal abroad.
Therefore, it is necessary to import through
such agents as they can be readily contacted
in case of an emergency or if there is any
dispute regarding quality or quantity of,
receipt of payment, documentation
formalities, etc. of imported goods.
An Inquiry, Offer and Counter-Offer: It is
advisable that before finalizing the terms of
import order of beauty products, one should
call for the samples/catalog and other
specifications of the items to be imported.
Then after satisfying himself/herself with the
samples/catalog and specifications, the
importer should proceed to finalize the terms
of the contract to be entered into.
PRE-IMPORT PROCEDURE
11

12. This post gives a basic
knowledge on how to import
Perfumery, Cosmetic items,
toilet preparations, and oils.
This information enlightens the
importers about a general idea
to import Perfumery, Cosmetic
items, toilet preparations, and
oils goods from China appli-
cable to almost all countries
worldwide. Some of the items
under this category of beau-
ty products are prohibited or
restricted in some countries. If
you are importing any
commodity, you need to obtain
accurate information from
concerned government
departments of that importing
country, as the details given in
this post will provide only a
common idea about the import
of Perfumery, Cosmetic items,
toilet preparations, and oils.
Different countries may have
their own different
requirements to import
Perfumery, Cosmetic items,
toilet preparations, and oils
although most of the
procedures and formalities are
same in all countries after
globalization of trade by
General Agreement on Tariff
and Trade, GATT.
In almost all countries,
government registration is
required to become an
importer in the country who
only can act as an importer.
Foreign Trade government
office of that particular
country is responsible to issue
such authorization to become
an importer. For example in
India, IEC number (Import
Export Code Number) is
obtained from the office of
Director General of Foreign
Trade office to operate as an
importer and exporter in
India. This process to
become
an importer is a onetime
process, but renewal required
as per the terms and
conditions of such foreign trade
office of a country.
Nowadays, in most of the
countries, the information on
registration for importer –
exporter is linked with
customs location and reserve
bank, as the process of
imports and exports are online
digitalized. So the importers of
beauty products i.e., Perfumery,
Cosmetic items, toilet
preparations, and oils are also
required to contact concerned
government agencies of their
importing country to verify
whether such onetime
registration is necessary or not.
Process to Import
Cosmetics from
China
Government
Registration as Importer
12

13. What are the Special Requirements
to Import Cosmetics from China?
The process and formalities to Import Cosmetics from
China may differ from one another and in country to
country. Also, different procedures and formalities to
import each item might be different under import
of beauty products. However, some of the common
requirements in major countries are explained below:
Food Safety Clearance
Some of the items under beauty products fall under
high-risk food items. For example, synthetic flavoring essence
under beauty products likes Perfume, Cosmetic items, toilet
preparations, and oils. So Food safety clearance of importing
country has to be undergone for any Import Cosmetics from
China. Normally, this procedure is done by drawing samples
of imported goods which are sent to respective laboratories for
testing purpose. The imported goods are released only after
obtainingfavorabletestreport.Ifsuchimportsareregularlytaken
placethenimportshipmentsareselectedrandomlyforinspection.
CVD on RSP Based Valuation to
Import Cosmetics from China
Some products under beauty products attract CVD
on RSP based valuation at some of importing country
when such goods are brought from overseas countries.
Certificate of Origin
The source of origin of imported beauty products is required
in almost all countries. So a certificate of origin issued by
necessary approved authorities at exporting country is required.
Certificate of origin helps to determine the origin of imported
beauty products to avail exemption on import duties and taxes.
Different unilateral, multilateral, and a bilateral agreement be-
tweencountriesallowsimportsandexportswiththeexemptionof
import duties wherein Certificate of Origin is the primary proof
on country of origin of imported goods under beauty products.
Procedures to Import
Cosmetics from China
The buyer and supplier mutually agree on terms
and conditions of import sale prior to actual
shipment of imports take place. Pricing, quality specifications,
termsofpayment,termsdelivery,andmodeoftransportandother
terms and conditions are agreed and mentioned in the purchase
order. Importation of beauty products is affected accordingly.
Under any importation of goods, necessary import
documentation, and customs clearance
procedures at importing country have to be completed
either through importer’s customs broker or importer
directlyaspertheforeigntradepolicyoftherespectiveimporting
country. For importing beauty products also, import
entry documents along with carrier’s document (Bill of
Lading /Airway bill), commercial invoice, packing list,
certificate of origin and other required documents are
filed and necessary import procedures are completed to
take delivery of imported goods. Nowadays, necessary
information/document is filed online and produces required
documents at the time of inspection, assessment, or delivery of
import of goods at destination customs location.
The buyer and seller share quality measures each
other and exempt from multiple inspections on same
products both for export and import. However, as per the
policy of most of the developed countries import of goods
from Least Developed Countries (LDC) need to be certified by
authorized agencies before export. So when importing
beauty products the details of such information can be
obtained from necessary government agencies of
importing country.
13

14. Prior Notice to Importing Country
In most of the countries, a prior notice regarding the
Import Cosmetics from China has to be filed before the
arrival of goods in entry port of importing country. In
this article, the documentation, process, and
formalities to beauty products are explained. This
information is generally applicable for all countries.
Buying cosmetics, beauty, and personal care
products from suppliers in China can be
extremely lucrative also venturing into the
cosmetics and personal care space can be complicated.
What Must Sellers Know, Before
Import Cosmetics from China?
Beauty and Personal Care Products
Manufacturers in China
The beauty and cosmetic and personal care
industry is very diverse, and include everything
from chemical processing plants and
R&Dfacilities to smaller workshops and
manufacturers producing makeup accessories
and other related products. China has following
categories:
Hair Extensions
Wigs
Hair Salon
Equipment
1
2
3
14

15. Makeup Tools
(i.e., Brushes)
Cosmetics
Skin Care
Lip Treatments
Electrical Beauty Equipment
(i.e., Hair removal lasers)
Nail Art and
Equipment
Cosmetic Bags
Jars and Packaging
4
5
6
7
8
9
10
11
15

16. Manufacturers in the beauty and care
products are primarily located in
China’s most developed provinces,
including Guangdong, Zhejiang, and
Jiangsu.
What to Find in the
Manufacturer?
When you source suppliers, you must
look for the following:
Product focus: Are they specialized in
your product category?
Product compliance: Can they comply
with different safety standards?
Registered capital: Is it more than
1,000,000 RMB?
Beauty Products Regulations
Beauty products are strictly regulated in
all developed markets, including the
European Union, the United States,
India, and Australia
To import cosmetic or personal care
products, such as makeup or hair care
products, importers need to verify that
the product doesn’t contain any
excessive amounts of restricted
substances. In addition, the product
must be correctly labeled and even r
egistered with the authorities. All of this
must be taken care before you import
the products otherwise the customs
authorities may seize and canceled the
entire shipment upon arrival.
Below follows an overview of relevant
regulations in several markets, where
we compare them on the following
factors:
Substance regulations
Registration requirements
Labeling requirements
Lab testing requirements
Document requirements
1
2
3
4
5
16

17. A single application may be made and a single Registration Certificate in Form 43 may be issued in respect of import of one
or more than one cosmetics manufactured by the same manufacturer: Provided that the cosmetics are manufactured at one
factory or functioning conjointly as a single manufacturing unit.A Registration Certificate, unless it is suspended or cancelled
will be valid for a period of three years from the date of its issue: Provided that if application for a fresh Registration Certif-
icate is made within six months before the expiry of the said certificate, the existing Registration Certificate will be deemed
to continue to remain in force until orders are passed on the application. No beauty products shall be imported unless it
complies with the specifications prescribed or any other standards of quality and safety, applicable to it, and other provisions.
Beauty products which are imported into India in bulk for repackaging for 100% export to other countries will not require
registration certificate. In that case, the importer has to obtain necessary permission from CDSCO HQ. The importer must
give written statements that these products are not for domestic sale.For Import Cosmetics from China for R&D purposes
like packaging trials, consumer studies, shelf life studies and transportstudies, the registration certificate is not required. In
that case, also importer has to obtain necessary permission from CDSCO HQ and must give written an undertaking that these
products are not released for domestic sale.
Cosmetic Registration in India
All beauty products that are imported for sale in India need
to be registered with the licensing authority as defined
under Rule 21 of Drugs & Cosmetics Rules, 1945. A
regulatory consultant helps in import and registration as well
as in renewal of registered cosmetics with CDSCO in India.
They also assist permission for import of cosmetic for trial,
test, and analysis as well as repackaging for 100% export.
Below are some important points for importer:
An application for issue of a Registration Certificate
for beauty products intended to be imported into In-
dia shall be made in Form 42 either by the authorized
agent or importer in India or by the subsidiary in India
authorized by the manufacturer and shall be accompa-
nied by a fee of two hundred and fifty US dollars or its
equivalent to Indian rupees for each brand of beauty products.
The following documents are required to be
submitted for grant of registration certificate:
Covering letter by the importer
Form 42
Treasury Challan
Power of Attorney
Schedule D III
Original or a copy of the Label.
Free Sale Certificate (FSC)/Marketing Authorization
letter/Manufacturing License, if any
Product specification and testing protocol.
List of countries where Market Authorization
or import permission or registration was granted.
Pack insert, if any
Soft copies of the information about the brands,
products, and manufacturer.
1
2
3
4
5
6
7
8
9
10
11
17

18. Labeling
Requirements in
India
The label of imported
beauty products will bear the
registration certification number
of the brand and the name and
address of the registration certif-
icate holder.The label should also
bear the name and address of the
manufacturer as well as of the
name of the country where the
product has been manufactured.
If the product has not been
manufactured in a factory owned
by the manufacturer, then the
name of the country (made in
China) should be there on the
label.
Ban on Animal Testing on
Beauty Products
At the time of clearance of the
consignment at the port office, a
written statement from the
manufacturer stating that the
products have not been tested on
animals is required to be
submitted to the concerned port
office.
Makeup and Beauty
Accessories, Equipment
and Electrical Appliance
Regulations
Many accessories, such as
makeup brushes and scissors and
electrical appliance, such as hair
dryer, hair straightening are not
defined as cosmetic products.
Therefore, may not fall under the
same regulations as makeup and
hair care products.
However, doesn’t mean that these
products are not regulated.
Depending on the product and
market, the following may be
required:
Country of Origin Label
CE Mark
WEEE Mark
REACH
CA Prop 65
Testing of Products
The purpose of testing is to
verify whether a product is
compliant with one or more
directives, acts, or safety
standards. As there are different
types of product regulations, so
different types of testing:
Substances testing (e.g.
California Proposition 65 and
REACH compliance testing)
Electrical safety testing (e.g. FCC
EMC compliance testing)
Mechanical and physical testing
(e.g. ASTM
compliance testing)
Full Certification
Having a full certification on a
product is the best and safest way
to import. What does that actually
mean? For an example: importer
wants to import a hair clipper/
hair trimmer. The hair clipper
itself runs on an integrated
rechargeable battery and the
battery is charged via an
external charger/adapter with
a plug. In 90% of the cases, the
supplier will only have an FCC/
GS/CE certificate for the charger/
adapter.
Because the adapter can be
certified with GS/FCC/CE can
be used on hundreds of different
products that need a universal
charger. So it makes sense for the
manufacturer to certify the
charger because he can sell it with
different products and needs to
certify the adapter once. While
the hair trimmer is a separate unit
in itself and may not sell well. So
why would the manufacturer pay
a lot of money to certify an entire
product if they may not sell it?
Therefore, it is necessary to find a
manufacturer who has a fully
certified product. A full
certification is quite expensive
and therefore not often found. Yet
some markets like Germany
demand ull certification,
especially from retailers.
..
..
.
18

19. What to Think Before Importing Cosmetics and Personal Care Products?
The main challenge while Import Cosmetics from China is to comply with all applicable product
regulations. As mentioned, far from all suppliers can manufacture products that comply with the strict
regulations in the United States, the European Union, and other developed Asian markets. In addition,
lab testing can cost thousands of dollars per product, when it comes to makeup, face masks, skin care, and
other chemical products (hair color).
Why can’t Importer Rely on the Supplier to Manage the Compliance Process?
The supplier is not responsible. At best, they can provide test reports from previous orders, but it’s
always the importer that is responsible for ensuring that all imported products comply with all applicable
standards and regulations. The supplier that does manage compliance on their own, or hire a consultant
to do it for them, will definitely not satisfied with selling their products at a factory price. Instead, he will
launch the product overseas on their own, rather than selling to importers, who take most of the profits.
Labeling & Marking
The following markings must be on the
finalpackaginginwhichtheproductissoldto
the importer where applicable:
WEEE, FCC, CE, GS, Made
in China, Recycle Symbol
Suppliers must put all labels and
markings of the product on the
Instruction Manual (Electronic products
usually have instruction manuals).
Self-Declarations
At times it doesn’t make sense to certify a product because your quanti-
ties are low or the product is so cheap that the certification cost doesn’t
justify certifying it. In that case, importer must ask the supplier to issue
a self-declaration which is in some cases accepted by authorities The
importer should at least need to be compliant with basic requirements
like raw material being certified or tested according to regulations.
However, most countries in Europe only allow CE or RoHS
self-declarations for various items, mainly low voltage or battery
powered products.
What is the MOQ?
MOQ depends on the type of product, but normally around 500 to 1000
pcs, per product. While many wholesalers may offer MOQs as low as
5 to 10 pcs per product, such products are non-compliant and even be
dangerous.
19

20. Can Importers, Private Label
their Cosmetics and Personal
Care Products?
Yes, many suppliers allow their
customers/importers to brand their
productswithaprivatelabel.However,keep
in mind that private labeling is not changing
the fact that importer is responsible for en-
suring that the cosmetics or care product is
compliant.
What are Different Shipping Methods?
Shipping costs are a substantial percentage of your total product cost, so it’s important to keep them as
low as possible. As a general rule of thumb, the bigger your order, the lower ‘per item’ shipping costs you
will have. Following are the 4 most popular shipping methods you can use to import goods from China:
20

21. Shipping with a courier company is the most suitable method for most
importers starting out if it involves small, lightweight items. With courier companies such
as TNT, DHL, UPS or FedEx importer have to pay a premium price for each kilo but
importer gets fast delivery times and an online tracking facility. These days most courier shipments take
normally 3-5 business days to arrive in any Western country from anywhere around the globe.
Courier:
This refers to normal, regular China Post
which can take approximately 6 weeks to ar-
rive. No online tracking is provided and
can be used for parcels under 2kg. Usually,
importer uses the regular post for samples and
again only if time is not that important and
you can wait a few weeks for a package to
arrive. It is not the most reliable system.
Regular Post:
21

22. This is the most popular shipping method used by
big companies/firms to import goods from
China. The cost per kilo (£100-£150 per pallet,
even less if importer can order full, or
half-container loads) is very low but the downside
is their lengthy delivery time. Depending on where
the importer is located it will be in the vicinity
of 30 to 40 days in most cases. Just like with Air
Freight, the importer has to take care of the d
ocumentation, customs clearance, and delivery of
goods from the port to home or office. So it always
recommended using a freight forwarding company
that will take care of all the procedures and deliver
goods right to the door.Also, with Sea Freight it’s
very important to calculate all the EXTRA COSTS
involved. The supplier will usually give the FOB
price, which means that the goods are loaded onto
the ship. But that’s not the end. Once your
shipment arrives at the port there are all kinds of
extra charges, such as: Unloading charge; Port
fees; docking fees; Storage fees; Clearance fees,
etc. In general, Sea Freight is better for bulky
items. Sea freight shipping from China is
perceived as a major hassle when importing
products.There are many more complex issues
when importing from China. However, Importers
still have reason to be concerned about freight
related issues. In this article, we cover everything
from shipping costs and insurances, to Incoterms,
FCL, and LCL shipping.
Sea Freight:
This shipping method lies between courier
shipping and sea freight. Shipping times vary
from company to company, but in general, it
takes 5 to 10 days which is not bad at all! Air
Freight costs will be significantly lower than with
courier companies, but extra work is involved
when the goods arrive in your destination
country. WithAir Freight importer usually have to
handle documentation and customs clearance on
their own (unlike with courier companies), which
for many newbies may seem impractical. The
importer can always outsource these tasks to a
freight forwarding company at an additional cost.
Air Freight:
22

23. Should Importer get a Freight
Forwarder or Let the Supplier
Manage the Freight Process?
The importer has basically two options, either the
supplier administers the shipping process, or
importer itself do it via a freight forwarder.
Letting the supplier administer (i.e., book the shipment)
the shipping process gives less transparency. However,
then importer is far better off working directly with a
reputable freight forwarder.
Freight forwarders are normally part of international
trade, but many have their own offices in major
Chinese port cities, such as Shanghai and Hong Kong.
A freight forwarder generally offers a wide range of
shipping services, including FCL, LCL, and air freight.
They also provide a designated contact person that keeps
informed importer and answers his
questions.
Do Importers Need to Pay any
Taxes in China?
No, importer doesn’t need to pay any “export tax” when
importing from China. However, they need to pay for
transportation to the port of loading in China and the
cost for export clearance papers. Both of these costs
are included if importer order shipping according to the
following terms: FOB, CIF, DAT, and DAP.
What Happens After the Cargo
Arrives at the Destination port?
And How it can be Accessed?
The importer will be notified a few days before the arriv-
al. After the container vessel arrives, the
containers are first unloaded. In some cases, some con-
tainer may be inspected by the local customs authorities,
but most are not.
Regardless of whether importer or the supplier managed
the freight, importer’s forwarder or customs broker starts
customs clearance procedures. This process takes 1 to 3
days, depending on the cargo and the applied process.
The importer has two options: either pick it up by them
or by asking their shipping agent to load it on a truck
and deliver it to a specific location. When the cargo ar-
rives at the Port of Destination importer will be notified
by the port agent. In most cases, the importer can book
the transportation directly through the port agent.
Shipping Incoterms are
international standard codes that
decide and states when and where
cargo shall be transferred between
the supplier and the importer.
For example, FOB (Free on Board)
includes transportation from the
factory, to the port of destination.
FOB also includes all export
procedures, which are required to
ensure that the cargo can be legally
exported. However, from the port
of destination, the importer must
arrange to forward to the final
destination. On the other hand, the
importer can book DAP (Delivered
at Place), which includes shipping
from the factory in China, to a
specified address overseas, such as
importer’s warehouse.
FCL and LCL
Shipping
Sea freight is not excluding
importers from importing small
volumes from China. If
importer buys by the container
load, then FCL (Full Container
Load) shipping is the right choice.
FCL is also the cost-effective
freight method available if counted
by cost per volumetric unit and
weight unit.
However, many smaller buyers
don’t buy full container loads. As
already said, Air freight is then
a viable solution for importing
small volumes. However, some
shipments are stuck in the twilight
zone between air freight and FCL
cost viability.
Then the solution spells LCL, or
Less (than) Container Load which
is basically shared
container freight. Cargo from
multiple buyers gets stored in the
same container.
Freight Insurance
Insurance is included, by default,
when importer select the incoterm
CIF, standing for Cost Freight
(and) Insurance.
If importer orders according to
DAT (Delivered at Terminal) or
DAP (Delivered at Place) then, the
importer must inform his shipping
company that the cargo must be
insured. As shipping insurance is
cheap, and rarely costs more than
US$50 to US$100. Shipping
insurance generally covers the
value of the cargo, in case of trans-
portation damage. It will not cover
lost sales or product development
costs.
Export Packaging
Cargo must be sufficiently
protected, from the dusty factory
floor to a damp warehouse, and
finally stacked in a container for
up to a month.
A lot can happen in this time, an
importer needs to be sure that his
export packaging is up for the task.
To ensure that cargo is protected
during transportation, the importer
can use the following checklist:
Inner cartons layers – 5
Outer cartons layers – 5
Plastic wrapping (on Outer carton)
Pallets (ISPM 15 EU Standard)
Freight remark (Printed on outer
carton)
Be sure to provide the supplier
with explicit and clear export
packaging specifications and do
not leave anything to their
interpretation.
But there is more to export
packaging. There are various
export packaging regulations to
take into consideration, such as
ISPM 15 and Lithium battery
restrictions.
Before shipping from China, the
importer needs to confirm which
shipping regulations apply in this
country, and to the product.
Incoterms
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24. Bill of Lading
It is the main freight document issued by the
transportation company that specifies the shipping
company, exporting company (seller), consignee
(buyer), products, volume, and incoterm. The Bill of
Lading is mandatory when shipping from China and
shall be delivered (along with the Commercial invoice
and the Packing list) to the importer within 2 weeks from
the shipment date.
Commercial Invoice
It is a document specifies the order value, types of
products, and the details of the consignee. This
document is used by the forwarder or customs broker for
customs clearance and calculation of import duties and
other taxes (i.e., Value added tax). This is also mandatory
and shall be delivered together with the Bill of lading.
Packing List
It is a document which specifies the volume, different types of products and quantity per type of
product. The Packing List is mandatory and should be delivered together with the Bill of Lading.
Certificate of Origin
A document specifies the origin of the material or the imported products. This document is used to
determine the import duty rate, but also for statistics and enforcement of embargoes
Customs and Taxes When Import
Cosmetics from China
Importing from China involves various taxes.
The applied taxes are calculated, vary depending
on which country the products are imported to.
Customs duty is a variant of Indirect Tax which is
applicable on all imported goods and a few goods
exported out of the country. Duties levied on
import of goods are termed as import duty. Many
countries levy customs duties on import/export of
goods as a means to raise revenue and/or shield
domestic institutions from predatory or efficient
competitors from other countries. Customs duty is
levied as per the value of goods, weight, and other
such criteria according to the goods.
Shipping Documents to Import Cosmetics from China
24

25. What is the Customs
Duty in India?
Customs duty in India is defined under
the Customs Act, 1962 and enables the
government to levy duty on exports and
imports, prohibit export and import of
goods, procedures for importing/
exporting,
penalties etc. All matters related to
customs duty fall under the Central
Board of Excise & Customs (CBEC).
The CBEC is a division of the
Department of Revenue of the Ministry
of Finance. CBEC formulates policies
that concern collection or levying of
customs duties, customs duty evasion,
smuggling prevention, and
administrative decisions.
Types of Customs Duty:
Customs duties are levied almost on
all goods imported into the country.
Import duties are not applicable on items
including lifesaving drugs/equipment,
fertilizers, food grains etc. Import duties
are further divided into basic duty,
additional customs duty, true
countervailing duty, protective duty,
education cess and anti-dumping duty
or safeguard duty.
Basic Custom Duty
Basic customs duty is levied on
imported items that fall under the ambit
of Section 12 of the Customs Act, 1962.
These duties are levied at the rates
prescribed in First Schedule to Customs
Tariff Act, 1975, under the terms
specified in Section 2 of the act. The
levied rates may be standard or
preferential as per the country of import.
In India basic customs duty levied on
import of goods is depends on the HSN
codes of the goods. The HSN code of
beauty products is given in chapter 33.
Basic customs duty on import of beauty
products in India is 10%.
Additional Customs
Duty (Countervailing
Duty (CVD)):
This duty is applied on
imported items under Section 3 of
Customs Tariff Act, 1975. It is equal
to the Central Excise Duty that is
levied on goods produced within
India. This duty is calculated on the
aggregate value of goods
including BDC and landing charges.
The CVD on Import
Cosmetics from China is 12%.
And special customs duty is levied
at 4%.
Protective Duty:
Protective duty is imposed to shield
the domestic industry against
imports at a rate recommended
by the Tariff Commissioner.
Education Cess:
This duty is levied at 2% and
higher education cess at another
1% of the aggregate of other
customs duties.
Anti-dumping Duty:
Anti-dumping duty may be
imposed if the imported goods
are at below fair
market price; however, the Chinese
government has provided certain
industries and/or domestic
manufacturers with subsidies. This
means that the relevant Chinese
manufacturers are allowed to sell
products below the market price.
These practices are not liked by the
EU and US – which often react with
Anti-Dumping Duty measures. The
Anti-Dumping Duties sometimes
target entire industries, and
sometimes individual
manufacturers.
An Anti-Dumping Duty must be
taken seriously since these are often
in the range of 40 – 60% (as a
comparison, the average duty
rate is around 5% in most western
countries).
Safeguard Duty:
Safeguard duty is applied if the
government feels that a sudden
increase in exports can potentially
damage the domestic industry.
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26. Customs Duty Rates:
Custom duty rates can be specific. In general, duty varies any-
where from 0% to 150%, with the average rate lying around
11.90%. Other fees related to customs duties include:
Landing Charge (LC) – 1% CIF
Countervailing Duty (CVD) – (0%, 6% or 12% (CIFD + LC))
CEX (Education and Higher Education Cess) – 3% CVD
CESS (Education + Higher Education) – 3% (Duty + CEX
(Education and Higher Education Cess) + CVD)
Additional CVD – 4% (CIFD + LC + CVD + CESS + CEX)
IGST:
IGST (Integrated Goods and Services Tax) is a component under
GST law. Which is levied on goods being imported into India
from another country. It has been subsumed various customs du-
ties including Countervailing Duty (CVD) and Special Additional
Duty of Customs (SAD).
GST rate is mapped to HSN code to enable standardization of tax
rates across India. GST is levied under five tax rates, namely 0%,
5%, 12%, 18%, and 28%. Following are the GST rate for beauty
products that fall under chapter 33 and 85 of the HSN code.
12% GST
Menthol and menthol crystals, Peppermint (Menthe Oil),
Fractionated / de-terpinated mentha oil (DTMO),
De-mentholated oil (DMO), Spearmint oil, Mentha
piperita oil [3302].
Tooth powder [33061010]
Odoriferous preparations which operate by burning
[33074100]
18% GST
Essential oils (terpeneless or not), including concretes and
absolutes; resinoids; extracted oleoresins; concentrates of
essential oils in fats, in fixed oils, in waxes or the like, ob-
tained by enfleurage or maceration; terpenic by-products of
the deterpenation of essential oils; aqueous distillates and
aqueous solutions of essential oils; such as essential oils of cit-
rus fruit, essential oils other than those of citrus fruit such as
Eucalyptus oil, etc., Flavouring essences all types (including
those for liquors), etc.[3301].
Mixtures of odoriferous substances and mixtures (incluing
alcoholic solutions) with a basis of one or more of these
substances, of a kind used as raw materials in industry; other
preparations based on odoriferous substances, of a kind used
for the manufacture of beverages; such as Synthetic perfum-
ery compounds [other than Menthol and menthol crystals,
Peppermint [3302].
Kajal pencil sticks [33042000]Hair oil [33059019, 33059020,
33059030, 33059040, 33059050, 33059090, 33059011]
28% GST on Import Cosmetics
from China
Pre-shave, shaving or after-shave preparations, personal
deodorants, bath preparations, depilatories and other
perfumery, cosmetic or toilet preparations, not elsewhere
specified or included; prepared room deodorizers, whether or
not perfumed or having disinfectant properties; such as
Pre-shave, shaving or after-shave Preparations, Shaving
cream, Personal deodorants and antiperspirants [3307].
Preparations for oral or dental hygiene, including and
powders; yarn used to clean between the teeth (dental floss),
in individual retail packages [other than dentifrices in
powder or paste from (tooth powder or toothpaste)] [other
than 33061010, 33061020].
Preparations for use on the hair such as Shampoos; Prepara-
tions for permanent waving or straightening; Hair lacquers;
Brilliantines (spirituous); Hair cream, Hair dyes (natu-
ral, herbal or synthetic) [other than Hair oil] [other than
33059011, 33059019].
Beauty or make-up preparations and preparations for
the care of the skin (other than medicaments), including
sunscreen or sun tan preparations; manicure or pedicure
preparations [other than kajal, Kumkum, Bindi, Sindur, Alta]
Perfumes and toilet waters [3303]
Other: Professional beauty care equipment [85437093].
Customs Duty
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27. Letter of Credit
Itis the most secure
payment method in terms of
“Payment Risk” and also a
popular option for transactions
exceeding $50,000. However,
LC’s are not always feasible for
small importers, due to
Exorbitant Bank Charges
Complex procedures &
paperwork which can be
difficult to understand
initially and it is advisable to
use a Certified Documentary
Credit Specialist for
consultation and compliance at
least for a couple of
transactions. Once importers
grasp the concepts, everything
becomes a lot simpler.Small &
many medium-end factories are
not always comfortable with
LC’s due to the complexity &
language barrier.However, one
benefit of using a Letter of
Credit is that it opens up a lot of
“financing options”.
PayPal
Paypal as a payment method
has gained more and more
acceptance in the last few years.
And is a commonly
accepted payment method now,
especially with tech-savvy
e-commerce sellers. But it is not
feasible for larger transactions
as their fee is percentage based.
It is a great payment method for
sourcing very small quantities
and samples.Majority of the
Paypal accounts are either held
by individuals or by Hong Kong
registered companies managed
by mainland China-based
individuals.
Cash
Cash is big in China and will
be for. Even large transactions
can take place in cash. Paying
in cash works either when the
importer is in China or is
being represented by a
sourcing company/agent on the
ground. Cash is definitely the
riskiest option from an
importers point of view as if
things go wrong, there is very
little recourse. Cash should only
be used for smaller transactions
where there is a degree of trust
with the supplier.
Upcomings
How to Import Edible Oil
from China?
A Complete Guidance: To
Import Computer Parts
from China
How to Import Garment
Accessories from China?
How to Import Plastic
Products from China?
Import Dairy Products In
India
Payment Methods
For Chinese exporters, timely, and
full payment is the top priority. As
long as all the documents have been
handed to the importer, the exporter
would regard the goods as being
handed to the importer as well.
There would be mainly 3 ways to
send money to China suppliers:
Telegraphic Transfer (T.T)
This is probably the oldest payment
method in international trade and the
most popular for low to medium end
transactions. Normally an advance
payment is sent before production
and the balance as per the payment
terms. The main risk for the
importer is losing the advance in
case things go wrong. In
Telegraphic Transfer, the importer
has to make the payment directly to
the bank by telegraphic to the
exporter’s bank account. To carry
out the T.T, the exporter needs to
open a USD account and inform
importer about account information
in advance (the bank will charge a
fee for T/T remittance).
T/T Payment Process
Deposit payment (30%)
Production starts
Completion of production
Quality Inspection / Compliance
testing
Buyer approves batch
Delivery to the Port of Loading
Bill of Lading
Loading & Shipment
Balance payment (70%)
Exporter sends original Bill of
Lading and other freight documents
(required to release cargo in
Port of Destination)
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28. Price : $14.99
N e x t I s s u e
The Best Solution to Import
Solar Panels from China