Customs is a government department that collects taxes on goods brought into the country or sent outside the country.
Customs clearance is the process of preparing and submitting the paperwork needed to transport goods within or outside of the country.
So, import customs clearance involves submitting a set of documents that the customs officer would need to evaluate the tax on the imported goods and make sure that everything is done legally.
There are many country-specific and goods-specific documents that are required to import goods, but we shall discuss only the general documents that are required to carry out a smooth customs clearance process for imported goods.
1. Bill of Lading
It is a primary legal document used in sea transport. It is issued by the transportation company to the shipper and has details such as the quantity, type, and destination of the goods being carried. The exporter needs to share the BOL with the importer, without which the goods cannot be collected by the receiver.
2. Commercial Invoice cum Packing List
It is another crucial document required for international trade. In a global transaction, it is a legal document that the exporter issues to the importer, which acts as a contract and a record of the sale.
3. Bill of Entry
It is the third most important legal document that is filed by the importer before the arrival of imported goods. Based on this document, the customs authorities inspect and clear the goods at the port. It contains information like the value of the goods, the quantity of the goods, and the type of cargo.
4. Import License
It is a permit issued by the DGFT that allows the import of goods that are subject to government regulations. It is usually valid for 18 months to a year, depending on the goods. Chemicals, pharmaceuticals, precious stones, plants, animals, and other regulated commodities require an import licence, which the importer must obtain and submit during the customs clearing process.
5. Insurance Certificate
It is issued by the insurance provider, which makes sure that the goods are secured against theft or damage while in transit.
6. Purchase Order and Letter of Credit
A PO contains details of the goods transported, their quantity and price, and their payment and delivery terms. It's a contract issued by the importer to the exporter confirming the purchase of goods. The importer then obtains a letter of credit from the bank, which promises to pay the agreed-upon amount to the exporter on the importer's behalf.
7. Industrial License
This document helps the importer avail import benefits under government guidelines.
8. Central Excise Document
The importer can avail central excise benefits with this document.
9. Registration cum Membership Certificate
This is a certificate of registration with the Federation of Indian Export Organizations required for importing (or exporting) restricted items and to avail of benefits under the Foreign Trade Policy or those offered by customs and excise authorities.
10. Duty Exemption Documents
The importer must produce the necessary paperwork during clearing in order to qualify for duty exemptions under government programmes like the Export Promotion Capital Goods (EPCG) and Duty Exemption Entitlement Certificate (DEEC).
Also read: What are the documents required for export customs clearance?
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