2. How to Import -Introduction
Governed by the Foreign Trade (Development & Regulation)
Act, 1992
With the globalization of Indian economy and
consequent upon comfortable balance of payment
position, Government of India has liberalized the
Import Policy and practically all Controls on
imports have been lifted.
Imports may be made freely except to the extent,
they are regulated by the provisions of Import Policy or
by any other law for the time being in force.
3. Principal Law & Import Export Policy
Imports in to India are governed by Foreign Trade (Development &
Regulation) Act 1992. Under this Act, imports of all goods is Free except for
the items regulated by the policy or any other law for the time being in
force.
By the Foreign Trade (Development & Regulation) Act 1992 the Government has issued
the following Rules & Order:
Foreign Trade(Regulation)Rules, 1993, provide for grant of special
license, application for grant of license, fee, conditions for licenses,
refusal of license, amendment of license, suspension of a license,
cancellation of license, declaration as to the value and quality of
imported goods, declaration as to the Importer- Exporter Code
number, utilization of imported goods, provisions regarding making,
signing of any declaration/statement or documents, power to enter
the premises and inspect, search and seizure of goods, documents,
things and conveyance, settlement, confiscation (Elimination) and
redemption and confiscation of conveyance.
4. Notifications and Circulars
The Import - Export Policy and Procedure
books issued by the Government are
amended/clarified/ explained by the Ministry
of Commerce from time to time.
The types of Notifications/Clarifications/Instructions
issued by the Ministry for this purpose are:
Public Notices.
Notifications
Policy Circulars
5. Select the commodity/Product you wish to
import
Be aware of the import potential and the commercial viability of the
commodity/product.
Check whether the items of your interest fall in the Restricted list of
ITC(HS) Indian Trade Classification (Harmonized System)
Classifications of Exports & Imports items.
Prohibited items are not permitted to be imported at all. List of Prohibited
items of import are detailed below:
Tallow(hard fat), Fat or Oils rendered (caused), un rendered or otherwise of any
animal origin, animal rennet (food) and wild animals including their parts and
products and ivory any part and products, including ivory.
For import of items appearing in Restricted list you need secure import
license. Third category of items comes under the Canalised list of items. Import of items
included in Canalized d list are permitted to be imported through Canalizing Agencies.
Thus items not appearing in Prohibited list, Restricted list and or in
Canalised list can be imported Freely without any import license. A large
number of Consumer goods are freely importable without license.
6. Registration with Regional Licensing
Authority
Registration with Regional Licensing Authority is a
pre-requisite for import of goods. The Customs will
not allow clearance of goods unless:
The importer has obtained IEC (Importer Exporter
Code) Code Number from Regional Licensing
Authority. However, no such registration is necessary for
persons importing goods from/ to Nepal provided Value of a
single Consignment does not exceed Rs. 25000/=
7. Obtaining IEC (Importer Exporter Code)Code Number
An application for grant of IEC Code Number duly signed by the applicant
should be supported by the following documents:
Bank Receipt (in duplicate)/demand draft for payment of the fee of
Rs.1000/-
A copy of Permanent Account Number issued by Income Tax
Authorities, if PAN has not been allotted, a copy of the letter of legal
authority may be furnished.
If there is any non-resident interest in the firm and NRI investment is
to be made with repatriable benefits, full particulars thereof along
with a photocopy of RBI's approval.
If there is NRI investment without repatriation benefit, a simple
declaration indicating whether it is held with the general/specific
permission of the RBI on the letter head of the firm should be
furnished. In case of specific approval, a copy may also be furnished.
8. Import Policy
For items not mentioned as Prohibited, Restricted
or Canalised List for import in ITC(HS)
Classification of Export and Import items; import of
such items are freely permitted. There is no need to
obtain any license or permission for importing such goods.
The ITC(HS) Classification of Export and Import
items contains 99 chapters and in each chapter
there are column heading covering Exim Code,
items description, policy and nature or restriction.
The information related to import policy for any item can be
obtained from site under Customs Duty Calculator Schedule.
9. Procedure to be followed for grant of
import license
An application for grant of an import license for
import of the items mentioned as restricted for
import in ITC(HS) Classification of Export and
Import items may be made to the regional licensing
authority concerned.
10. Fees for License Application:
Every application for import license or CCP (Customs
Clearance Permit ) should be accompanied by 2 copies of a
bank receipt from the Central Bank of India or a Bank
Draft from any Bank indicating the deposit in
accordance with the prescribed scale of fees.
Rs. 200 where the value of goods specified does not exceed Rs. 50,000.
Rs. 2 per thousand or part thereof subject to a minimum of Rs. 200 and a
maximum of Rs.1 lakh 50 thousand, where the value of goods exceeds Rs.
50,000.
Rs. 200 where Application is filed be SSI units where the CIF(cost
insurance and freight) value of goods specified in the application does
exceed Rs. 2 lakh.
Rs. 200 where application is for grant of duplicate license.
11. Validity of License
Besides import license for import of restricted items there are other variety of
licenses and such licenses have different period of validity.
Export Promotion Capital Goods License validity 24 months
Customs Clearance Permit " 12 months
DEPB(Duty Entitlement Passbook) " 12 months
Advance License/Special Imprest License/Advance authorization
scheme (A special imprest license is given to manufacturer exporters for the
import of inputs required in the manufacture of goods to be supplied to the
deemed export categories ) (Deemed exports refers to those transactions in
which the goods supplied do not leave the country and the payment
for such supplies is received either in Indian rupees or in free foreign
exchange)
For Project/Turnkey Project "18 months or co-terminus with the
contracted duration of the Project
For the cases where the license expires before the last day of the
month, the license shall be deemed to be valid until the last day of
that month.
12. Revalidation of License:
License revalidation can be done on merits but not
beyond 12 months by the concerned licensing
authority for a period of six months at a time
considered from the date of expiry of the validity
period.
13. Conditions of License
The license for import is taken into consideration
provided:
the goods covered by the license shall not be
disposed of except in accordance with the
provisions of the EXIM Policy, 1997-2002 or in the
manner specified by the licensing authority in the license;
the applicant for a license shall execute a bond for
complying with the terms and conditions of the
license.
14. It shall be deemed to be a condition of every
license for import that
no person shall transfer or acquire by transfer any
license issued by the licensing authority except in
accordance with the provisions of the Policy;
the goods for the import of which a license is granted shall be the
property of the licensee at the time of import of which a license is
granted shall be the property of the licensee at the time
of import and up to the time of clearance through the
Customs;
the goods for the import of which a licensee is granted
shall be new goods, unless otherwise stated in the
license;
the goods covered by the license for import shall not be
exported without the written permission of the DGFT.
15. Disposal period for import application
Provided the application is complete in all respects along with prescribed documents, the applicant-
importer can expect the disposal in:
IEC No. - 3 working days
Duty free license where input-output norms(standard norms which define the amount of inputs
required to manufacture a unit of output for export purpose.) are notified - 5 working days
Duty free license where input-output norms are notified but cases are to be placed before -15 working
days
Duty free license where input-output norms are not notified, EPCG licenses/export licenses/export
licenses/specific import licenses - 15 working days
Revalidation of license and extension of export obligation period by - 5 working days
Acceptance of Bank Guarantee/Legal undertaking - 3 working days
Redemption of Bank Guarantee/Legal undertaking/Endorsement of Transferability - 10 working days
Issuance/renewal of Export House/Trading House/Star Trading House/Super Star Trading House
- 15 working days
Amendment of any category of license - 5 working days - 7 working days
Fixation of Standard input-output norms - 45 working days
DEPB (Duty Entitlement Passbook )- 5 working days
All licenses falling under Chapter 8 - 5 working days
Miscellaneous - 15 working days
Fixation of deemed exports drawback rate - 45 working days
16. Imports under Special Scheme for
Exporters
The Govt. of India has framed the certain schemes to
promote exports.
17. Export Promotion Capital Goods
Schemes
Capital goods including fixtures, dies and moulds
may be imported at a concessional rate of customs
duty. Subject to an export obligation to be fulfilled over a
period of time. In addition spares up to 20 per cent of the
cost insurance and freight (CIF) value of the capital goods
may also be imported under the scheme.
Under this scheme Customs duty is 5% if the export
obligation is 5 times the CIF value of the capital
goods or 4 times the CIF value of capital goods. The
period of fulfillment of the export obligation is 8 years
reckoned from the date of issuance of license.
18. Duty Exemption Scheme
Duty exemption schemes enable duty free import of inputs
Schemes required for export production.
Duty Exemption Schemes consist of
(a) Advance Authorisation scheme (free import of
inputs required for export production.) and (b) Duty
Free Import Authorisation (DFIA) scheme. A Duty
Remission Scheme enables post export replenishment
(replacement) / remission (reduction) of duty on inputs used in
export product. Duty Remission Schemes consist of (a) Duty
Entitlement Passbook (DEPB) Scheme and (b) Duty Drawback
(DBK) Scheme.
19. Advance Release Order
A duty free license holder except Advance Intermediate License
Holder intending to source the inputs from indigenous
sources/canalising agencies/EOUs/SEZ/EHTP/STP units in lieu
of direct imports has the option to source them against Advance
Release Order (ARO) denominated in foreign exchange/Indian
rupees. In such cases, the license is invalidated for direct import and
permission in the form of ARO is issued which will entitle the supplier
to the benefits of deemed exports.
Back to back inland letter of credit: This is an alternative to ARO. For
this the duty free license holder intending to avail such facility
may approach a bank for opening an inland L/C in favour of an
indigenous supplier. Before this the bank will ensure that necessary bank
guarantee or Letter of Undertaking has been executed by the license holder
and endorsement to this effect has been made on the License.
20. Hints/Suggestion for finalization of
import order/contract:
Selecting the Overseas Supplier: Imports can be made
from any country of the world. The information regarding overseas
supplier can generally be obtained from the following sources:
Trade Directories and Yellow Pages, like Singapore yellow pages,
Japan yellow pages, USA yellow pages etc. available from leading
booksellers in India including. Consulate Generals and Trade
Representatives of various countries in India and abroad.
Friends and relatives in foreign countries. International Trade
Fairs and Exhibitions for which you may contact:
International Trade Promotion Organisation(ITPO),
Pragati Maidan, New Delhi.
Chamber of Commerce.
Directorate of Industries, etc.
Indenting Agents of Foreign Suppliers.
21. Capability and Creditworthiness of
Overseas Supplier
Successful completion of an import transaction will
mainly depend upon the capability of the overseas
supplier to fulfill his contract.
The credit worthiness of the overseas supplier, his
capacity to fulfill that contract, etc. should, therefore, be
properly verified before entering into a contract with
him.
Confidential reports about the supplier may be obtained
through the banks and Indian embassies abroad.
Reputed overseas suppliers normally have their
Indenting Agents with offices in India and contract can
also be finalized through them for smoother operations.
22. Mode of Pricing and INCO TERMS
The importer can also take the assistance of Credit
Information Agencies for specific commercial
information on overseas suppliers. They may also
contact Trade Information Centres of the country concerned.
While finalizing the terms of import contract, the
Importer, should, inter alia, be fully conversant with
the mode of pricing and the manner of payment for
the imports. As regards mode of pricing, the overseas
supplier normally quote the terms prevailing in international
trade.
23. The importer for his benefits should know the
meaning of the technical terminology.
To avoid ambiguity in interpretation of such terms,
International Chamber of Commerce, Paris, Has
give detailed definition of a few standard terms
popularly known as 'INCO TERMS'.
24. INCO TERMS
Ex-work :
'Ex-work' means that the seller's responsibility is to make the
goods available to the buyer at works or factory.
The full cost and risk involved in bringing the goods from this
place to the desired destination will be borne by the buyer. This
terms thus represents the minimum obligation for the seller. It is
mostly used for sale of plantation commodities such as tea, coffee and cocoa.
Free on Rail (FOR)/Free on Truck (FOT):
These terms are used when the goods are to be carried by rail,
but they are also used for road transport. The seller's obligations are
fulfilled when the goods are delivered to the carrier.
Free Alongside Ship (FAS):
Once the goods have been placed alongside the ship, the seller's
obligations are fulfilled and the buyer notified.
The buyer has to contract with the sea carrier (transporter or
shipper) for the carriage of the goods to the destination and pay
the freight. The buyer has to bear all costs and risks of loss or
damage to the goods hereafter.
25. Free on Board(FOB):
The seller's responsibility ends the moment the
contracted goods are placed on board the ship, free of
cost to the buyer at a port of shipment named in the sales
contract. 'On board' means that a Received for Shipment'
Bill of Lading (A bill of lading is a document
acknowledging the receipt of goods )is not sufficient.
Such B/L if issued must be converted into 'Shipped on Board B/L'
by using the stamp 'Shiped on Board' and must bear signature of
the carrier or his authorized representative together with date on
which the goods were 'boarded'.
26. Cost and Freight (C & F):
The seller must on his own risk and not as an agent of the
buyer, contract for the carriage of the goods to the port of
destination named in the sale contract and pay the freight.
This being a shipment contract, the point of delivery is fixed to
the ship's rail and the risk of loss or of damage to the
goods is transferred from the seller to the buyer at that
very point. As will be seen though the seller bears the cost of
carriage to the named destination, the risk is already
transferred to the buyer at the port of shipment itself.
Cost Insurance Freight (CIF): The term is basically the same as C
& F but with the addition that the seller has to obtain
insurance at his cost against the risks of loss or damage to
the goods during the carriage.
27. Payment against imports
Payment under letter of Credit is a universally accepted mode of
payment.
A letter from a bank guaranteeing that a buyer's payment to a
seller will be received on time and for the correct amount. In
the event that the buyer is unable to make payment on the
purchase, the bank will be required to cover the full or
remaining amount of the purchase. The bank also acts on
behalf of the buyer (holder of letter of credit) by ensuring
that the supplier will not be paid until the bank receives a
confirmation that the goods have been shipped.
A Letter of Credit is a Signed instrument and an undertaking
by the banker of the buyer to pay the seller a certain sum of
money on presentation of documents evidencing Shipment of
Specified goods subject to Compliance with the stipulated
terms and Conditions.
28. Parties to a Letter of Credit
Following persons are generally parties, to a letter of Credit:
Beneficiary : The exporter of goods in whose favour the L/C has been established.
Customer/importer : The person we intends to import the goods and
instructs bank to established Letter of Credit.
Issuing Bank: The Banker in the importers Country who opened the L/C.
Correspondent Bank or Advising Bank: The banker in the exporters
country, who is authorized by the issuing bank to advise the beneficiary
of the Credit and to effect such payment or to accept and pay such bills
of exchange or to negotiate against Stipulated documents and on
Compliance of Stipulated terms and condition specified by the importer
on the exporter.
Confirming Bank: The banker in the exporters(beneficiary) country,
who at the desire of the beneficiary adds confirmation to the letter of
Credit so that beneficiary can get payment without recourse from the
Confirming bank. The Confirming bank may be correspondent bank
itself or some other bank.
29. Letter of Credit vs. Bank Guarantee
A letter of credit differs from a bank guarantee.
Bank Guarantee is a guarantee from a lending institution
ensuring that the liabilities of a debtor will be met. In other
words, if the debtor fails to settle a debt, the bank will cover it.
A commercial credit is neither a performance bond, nor it is a
guarantee of the quantity or quality of the goods shipped.
30. Letters of Credit are Separate Transactions
A contract for sale of goods between the seller and the buyer
incorporates mode of settlement. Letters of credit by their nature
are separate from the sale contract, and banks are not concerned or
bound by such sale contracts even if the credits bear reference to
them.
The credits stipulate documents which have to be tendered for
payment and it, therefore, follows that in credits parties deal with
documents and not with goods, services or performances to which
the documents relate.
It is, therefore, in the interest of all the parties concerned that the
conditions and terms of credit are complete and precise and
banefit of excessive details.
The seller(beneficiary) cannot take advantage of any contractual
terms in between the buyer and the opening bank and between the
opening bank and the advising/confirming bank.
31. Uniform Customs and Practice for
Documentary Credit
In the course of time, a number of practices, expressions and
terms have evolved between banks dealing with documentary
credits. To ensure uniformity of interpretation in
international trade, the International Chambers of
Commerce in Paris has worked out the "Uniform
Customs and Practice for Documentary Credit". These
have been revised and brought up to date several times in the past.
The latest in the line of revisions is the UCP 500 (w.e.f. January 1,
1994) which updates and consolidates the previous UCP 400.
They are now applied by the banks in nearly all
countries including India.
32. Precautions to be taken at the time of
establishing Letter of Credit
Letter of credit offers almost complete protection to the seller
but the buyer is put to many disadvantages and has to make
payments against documents only.
Before agreeing to open a letter of credit in favour of the seller, the
opener must be satisfied with the creditworthiness and general
reputation of the seller. Entire success of an L/C transaction
depends on proper conduct of the seller.
Confidential report on the seller must be obtained at the time
of first transaction with him.
33. Letter of credit also does not offer any protection for
the quality/quantity of goods supplied under the
L/C. It would, therefore be necessary to know the nature
of goods and specify submission of quality
reports/inspection reports from an independent
agency to ensure receipt of goods of proper quality.
It is necessary that complete and precise information
must be given in the L/C application form specifying
therein the description, unit rate and quantity of the
goods covered under L/C and details of documents
required in absolute clear and unambiguous terms.
The reference to underlying sale contract must be avoided
as far as possible. The L/C application must nevertheless
contain all the required/information based on which
L/C could be opened by the bank.
34. Import contract may be concluded either in terms of INR
or in foreign currency. Where the contracts are in INR, the
related documents are also prepared in INR and no
conversion is involved.
However, where the bill is drawn in foreign currency, the
payment is made in Indian rupees equivalent to the
foreign currency. The equivalent rupee value is arrived at
by applying suitable exchange rate. These rates are applied
by banks to standardise the foreign exchange-rupee
conversion process.
When the price of foreign currency is quoted in terms of
home or local currency it is called direct quotation basis..
However, there is a difference between inter-bank
exchange rates and merchant rates.
35. Merchant rates are the exchange rates applied by the bankers
for transaction with their customers for various purposes,
including imports and exports. These rates are calculated by
the banks as per the guidelines issued by the Foreign
Exchange Dealers Association of India (FEDAI).
Inter-bank rates are the rate for transactions amongst the
authorized dealers in foreign exchange and depend on the
market conditions.
Since exchange rates are volatile, documents delivered by the
bank at the time of a favourable exchange rate( high value)
will enable the Indian purchaser to pay less of Indian rupees.
Forex rates are always quoted as two way price i.e. at a rate at
which the bank is willing to sell foreign currency(buying rate)
and at a rate at which the bank is willing to buy foreign
currency(selling rate).
There is always some difference in buying and selling rates.
However, the maximum spread available to bank is restricted in terms of
ceiling imposed by RBI. All exchange rates by authorized dealers
are quoted in terms of their capacity as buyer or seller.
36. TT(Telegraphic Transfer) Selling Rate
This rate is applied for all clean remittances (payment) outside India.
For selling foreign currency to its customer by the bank such as for
issuance of bank drafts, mail/telegraphic transfer etc.
TT(Telegraphic Transfer) Buying Rate
This rate is applied for purchase of foreign currency by banks when
the banks in India have already obtained the cover in India. Thus all
foreign inward remittances (transfer of funds) which are made
payable in India are converted by applying this rate.
A mail transfer issued by a bank in Dubai for US $ 10,000 drawn on
any commercial bank having branch at the overseas destination
will be converted into rupees at TT buying rate.
Reading Rates-The rates announced by the banks every day
morning are card rates. Or announced by news papers etc.
37. Reputed importers can always bargain with the bank for
improvement in the card rates for reducing their rupee
liability on conversion of foreign currency into Indian
rupees.
Also a distinction is made between spot rates and forward
rates. Spot rates are applicable on the day of transaction,
whereas forward rates are fixed in advance for a transaction
that will mature at a specified date or during a specified
period in future imports.
38. Hedging against Forex risk:
Exchange risk arising on account of adverse movement of
the exchange rates, can be avoided by the following methods:
By requesting the supplier to invoice the goods in
Indian rupees (possible only when the seller agrees to it)
By entering into a forward exchange contract.
39. What is Forward Exchange Contract?
A special type of foreign currency transaction. Forward contracts
are agreements between two parties to exchange two
designated currencies at a specific time in the future.
These contracts always take place on a date after the date that
the spot contract settles, and are used to protect the buyer
from fluctuations in currency prices.
Forward contracts ordinarily takes place within ten days of the
transaction date.
They cannot be canceled except by the mutual agreement of
both parties involved.
The parties involved in the contract are generally interested in hedging a
foreign exchange position or taking a speculative position.
40. Hedging against Forex risk
This involves booking of forward exchange contract with the
bank of the importer.
For booking forward contract the importer should
approach his bank with which an L/C has been
opened.
The bank will book a forward contract only against
genuine trade transaction.
The bank will verify suitable documents to ensure the
authenticity and the amount of permitted currency of
the underlying transaction.
41. The amount, date and number of the forward contract will be
marked on such documents under the stamp and signature of
the bank to ensure that more than one forward contract is not
booked in respect of the same underlying transaction.
A transaction may be covered either in parts or in whole.
The period and extent to which an exposure is to be covered
is left to the choice of the customer.
If the documents of import are not received within the agreed
period of the contract, the contract needs to be cancelled(an
fresh contract booked if desired) for which the bank will levy
cancellation charges as per FEDAI rules.
In case the documents are received before the stipulated date
and the importer wants early delivery, the bank will again levy
charges for early delivery, as per FEDAI rules.
42. The importers should be careful in choosing the period of
forward contract. Otherwise early delivery or cancellation of
forward contract would lead to unnecessary charges.
The RBI allows substitution of an import order on specific
request, provided the bank is satisfied with the circumstance
leading to the non-performance of the contract.
Where the documents are under a contract(Non-L/C case), the
seller will submit the complete set of documents to his banker
with the request to either purchase/discount the documents
or same on collection basis to the importer.
In the former case the seller's bank finances the sellers
whereas in the latter case, no financial facility is extended to
the overseas seller.
The seller's banker may advance some money against
documents sent on collection basis while, treating the
documents as collateral(guarantee) security.
43. When the documents are under L/C, the documents are
prepared strictly in conformity with the letter of credit.
After preparing the documents the overseas seller will
tender the documents to his banker for negotiation.
The bank, after receiving the documents, will examine
them to ensure that they are strictly drawn as per the
terms of the credit.
Following this the overseas banker will send the
documents to the importer's banker in India.
The importer's bank will advise the importer to collect
the shipping documents either against payment or
acceptance as per the terms of the contract.
44. In case the documents are drawn under L/C, the issuing
banker(of the overseas supplier) will examine the
documents and if found in order it will hand over the
same to the importer after debiting his account with
amount involved or against acceptance as per the terms
of the credit.
If the documents are not in line with the terms of the
credit, the overseas banker can either refuse to
negotiate further and ask the seller to send them on
collection basis only; or it can contact the importer's
bank(in the buyer's country) for authorization; or it can
also make payment under the reserve against seller's
indemnity (compensation)
45. Procedure to be followed for grant of
import license:
Scrutiny of documents
This is a very important function and this should be
done with great care.
After receiving the document from the overseas
supplier's bank, the importer's bank will scrutinise
them to verify the extent of correctness as per the terms
of the L/C.
For discrepancies in the documents following principles
are adopted:
Certificate of origin
It is issued by the authority stipulated in the L/C
The description of goods agrees with that in the invoice
46. Checking other documents
All other documents stipulated in the L/C are verified
They are issued by the authorities specified in the L/C
They contain the details as required by the L/C
For matter relating to Documentary Collections and Commercial
terms, the importers are likely to be conversant with the brochures
issued by the International Chamber of Commerce(ICC), Paris.
Following are the brochures:
Uniform Customs and Practice for Documentary Collection and
Commercial Terms
Uniform Rules of Collections (ICC522)
Uniform Rules for a Combined Transport Document (ICC298)
INCO Terms 1990
RBI regulations for Making Payments by importers
47. Customs Clearance of imported goods
Customs Authorities and the Clearing agents play the key role
in the import of goods.
All goods imported into India have to pass through the
procedure of Customs clearance as they cross Indian border.
The goods are examined, appraised, assessed, evaluated and
then allowed to be taken out of charge of the Customs for use
by the importer.
The entire process of customs clearance is complex and to carry
out this procedure smoothly, the help of accredited customs
clearing agents has to be taken.
48. The importers need to present a Bill of Entry on receipt
of the advise of the arrival of the vessel.
The B/E is noted in Import Department, with
corresponding endorsement made against the
consignment entry in the IGM along with the date. (The
shipping line has to give a detailed report of all the goods on
board in a report known as "Import General Manifest)
The B/E will then be presented in the Appraising
Department with all the relevant documents like
invoice, Bill of Lading, Import license and catalogue
literature.
49. Custom Authorities
There are two main wings of Customs House. In the
'Appraisement' wing the job of collection of revenue is
assigned, while the 'Preventive' one aims at prevention
of smuggling.
The Customs authority functions under the Ministry of
Finance (MoF) with the Central Board of Excise &
Customs at the apex.
The board is headed by a Chairman and assisted by
Members.
50. The Members (Customs) looks after the following matters:
Classification of Customs tariff
The basic legislation is the Indian Customs Act, 1962 read with
Customs Tariff Act, 1975. Section 12 of the Customs Act,'62
empowers levy of duties on goods imported into or
exported from India.
However, the rates at which the different import export
duties shall be leviable have been respectively specified
in the First and Second Schedule to the Customs Tariff Act, 1975-
called the import Tariff and Export Tariff respectively.
With effect from Feb. 28, 1986, the new tariff import
schedule based on international convention of
Harmonised Commodity and Coding system, commonly
known as Harmonised Coding System came into being.
51. Import through Courier
As laid down by the current foreign trade Policy, import of
goods through courier is permitted in accordance
with the Courier Imports & Exports (Clearance)
Regulations, 1998.
If the CIF value of the consignment imported does not
exceed Rs.100000, the relative Bill of Entry is required
to be filed by the registered courier service.
If the CIF value is Rs.100000 or more, importers are to
file separate B/E as in the case of other imports.
52. Import of Samples
Bona fide technical and trade samples of items, even those
in the restricted in ITC(HS)Classifications of Export and
Import items is allowed without a license for a value not
more than Rs. 1 lakh(CIF).
Prototype (trial or model products) import
This may be allowed on payment of duty without a
license to an actual user, industrial engaged in the
production of or having industrial license/LoI or
research, as the case may be, provided the number of items
imported does not exceed 10 in number in a year.
53. Passenger Baggage
Under the Rules various kinds of articles can be
imported up to certain value limit depending upon
the duration of stay of the passenger abroad and on the
basis of Resident and Non-Resident Status of the
passenger.
Passenger Baggage Rules and import duty structure for
baggage as applicable for such imports under the
Baggage Rules has been given separately
