ONLINE SYSTEM OF

CUSTOM
CLEARANCE UNDER
ICEGATE
LEARNING OBJECTIVES:

 To explain the initialization of online system of Custom Clearance.

 To describe the main modules of ICEGATE system for custom
clearance of export and import cargo
 To understand step by step system of online custom clearance of
exportable cargo.
 To describe step by step system of online custom clearance of
imported cargo.
LEARNING MATERIAL: A historic step in trade facilitation and transaction
cost reduction in Indian foreign trade as Ministry of Commerce and Finance
has decided and envisaged a plan to electronically exchange the trade
documents at all Ports / Airports/ICDs/CFS/ Land Customs Stations with
agencies involved in trade such as Financing Bank, Reserve Bank of India,
Director General Foreign Trade, Custodians of Imports and Exports Goods
and other regulatory agencies. In the beginning of 1991, when government
has made the its objective clear that export promotion are vital to India
growth and accordingly steps were made to facilitate the exporting
community with slew of initiatives for better trade facilitation. National
Informatics Centre and Central Board of Indirect Taxes & Customs in
December, 1992 have decided to run the pilot phase of EDI system of
Export Import Clearance of customs at number of Customs Houses
throughout the country. On the success of pilot phase, a more detailed
execution study at the Delhi Custom House in April, 1994 was planned and
executed through ICES. In March 1996, it was decided that ICES gateway
will be extended to 20 other customs locations. Today, the ICES gateway is
successfully commissioned at 157 locations in the country covering all the
major ports, air ports, Inland Container Depots and land customs stations.
The CBIC has initiated several steps to create awareness for the acceptance
and use of ICES gateway at the user level thus paving way for the smooth
change from the traditional method of clearance of customs documents to
electronic clearance of export and import consignments. ICES gateway has
been of immense help in ensuring transparency and accountability by
reducing the arbitrariness and uncertainty in the processing of documents.
There is an automated random allocation of electronic declarations to the
Appraising officer. A declaration, once registered with the system, is
handled on a first-come-first serve basis. At the time of declaration the
validation features ensure that only valid data is accepted by the system
and invalid data is rejected at the service centre. The system provides for
management of parameters such as exchange rates, drawback rates, rates
of duty on the basis of directories which are updated by the systems
manager, thereby eliminating errors previously encountered in the manual
processing of documents. A concept of `Green Channel' has been introduced
which provides waiver of examination by customs on the basis of importers
profile. The only interface between customs and trade is at the time of
collection of goods.
This project entitled as Indian Customs EDI System (ICES) Gateway, the all
India computerization of Custom Houses in India has started accepting the
export import documents and exchange of information electronically in
centralized/structured formats with other organization involved in foreign
trade value chain. With the introduction of EDI system in Indian Customs,
the trade documents would move from one organization to another
organization in the electronic form and same will be when the documents
moved within organization from one desk of customs officer to another
thereby paving the way for paperless trade, time and cost reduction,
transparency, accountability and above all trade facilitation so as to reduce
transaction & logistical cost of Indian foreign trade which is one among the
highest in world at 12% of GDP. Hence; Indian Customs EDI System (ICES)
initiated a new era of trade facilitation and transaction cost reduction in the
country by ensuring:

a. Paperless Trade.
b. Trade facilitation rather than control.

Figure: EDI of Customs: The Journey So Far…

The pilot project was launched in the year 1994-95 at Delhi Customs House.

ICES were made operational for exports processing at Inland Container Depot, Tughlakabad in
August, 1997; Sahar Air Customs, Mumbai in November, 1997; Jawaharlal Nehru Port Trust, New
Mumbai in November, 1997; Chennai Air Customs in December, 1997.

ICES were extended to Bangalore Air Customs in February, 1998; and Container Freight Station,
Patparganj in March, 1998.

As on today ICES is operational at 24 locations throughout the country.

More modules on Transshipment, Warehouse, Reexamination and Bonds etc have been designed
and Risk Management System is under trial under pilot phase. On its successful completion it will
be extended throughout the country.

157 Customs Stations are extending paperless services to Indian trade communities which are
available 24X7.

Under AEO Scheme, facility of Direct Port Delivery (DPD) and Direct Port Export (DPE) is provided
to Indian importers and exporters.

Source: Central Board of Indirect Taxes & Customs

Benefits of Icegate/ EDI System: Iceagate offer numerous benefits to

Indian Trade community and the same are elaborated as under:
a. Traders have cost saving as improved customs clearance and
inspection procedures become very faster ensuring more certain and
ultimately less costly international trade transactions.
b. Computerization of customs procedures has made the international
traders job very easy as their cost of doing business has get reduced
significantly in the EDI system. There is time and cost savings to the
traders as preparing, handling, storing and delivering the customs
documentation.
c. EDI has facilitated significant improvements in communications,
access to information and the transparency in customs processes
resulting in increased certainty and fairness.
d. As EDI system can also provide information regarding the good
compliance track record of exporter and importer resulting in faster
clearance and less intrusive verification techniques.
e. Importers know the amount of duties and taxes owing as a result of
the clear and consistent rules. More efficient clearance will produce
time and cost savings and provide the certainty required to exploit
modern business practices such as “just-in-time” inventory.
f. Exporters benefited from having similar customs rules and
procedures apply across the international market, thus increasing
market access opportunities, while reducing costs and complexity.
g. Customs Brokers have the opportunity to refocus their services from
dealing with forms and complexity to using their expertise and
knowledge to bring a new range of professional services to clients
operating in an expanding and evolving trade market.
h. Carriers benefit from faster service, lower costs and the ability to use
their equipment to its utmost capacity rather than having it delayed
at Customs.
Table : Elements of Two Main Module Used In EDI

Main Modules Of ICES/Import Main Modules Of

ICES/Export
 Bonds Service Centre License Service Centre Examination

Appraising Baggage Audit Assistant

Duty Drawback
Commissioner

Systems Additional Preventive

MIS Cash
Manager commissioner Officer

DEEC/100%
Ex-Bond Examination Export General
EOU License
Manifest

Import General Assistant

E-Sanchit Systems
Manifest Commissioner MIS
Manager

Transshipment
E-Sanchit

Source: Central Board of Indirect Taxes & Customs

Process Flow of Exports under EDI: The process of Documentary flow for
exports under the Icegate is explained as under:

a. The exporters/CHA is required to submit duly Shipping Bill under

Claim of Duty Drawbacks for export of goods online at ICEGATE
Commissioner of Custom. The S/B should be accompanied with
required copies of Commercial Invoice and Packing List.
b. The Service Centre staff enters the data into the system and
generates “Check List” to be verified by the Exporter/CHA for
correctness on verification if the data found to be correctly recorded.
The Exporter/CHA will sign the check list and return it to the Service
Centre, signaling final submission. Then the Service Centre will
generate the S/B Number, which will be recorded manually on the
right top of the check list and returned to the Exporter/CHA; thus
completing the registration of document. The Service Centre will also
generate three copies of TR-6 Challan for payment of Cess wherever
the Cess element is involved.
c. The following types of Shipping Bills will be put to Asst.
Commissioner queue for clearance:
 i. Duty Free S/Bs - F.O.B. value over Rs.10 lakhs
ii. D.E.E.C. S/Bs - F.O.B. value over Rs.1 lakh
iii. Drawback S/Bs - Drawback over Rs.1 lakh
iv. Free Trade Samples - F.O.B. value over Rs.1,00,000
Having completed the process of clearance of the export documents
from Assistant Commissioner, these export documents will be put in
goods registration in order to ensure the Examination of the cargo.

d. All other Shipping Bills which are below the value as aforesaid
mentioned in para 3 are straightaway put in examination goods
registration queue and such export documents does not require any
prior assessment of documents.
e. The Exporter/CHA is required to present the cargo for examination
to authorities within 2 days from the date of registration of document
to the Service Centre.
f. The Exporter/CHA has to submit duly filled in data sheet explaining
about shipping bill no., vessel no., Freight and Insurance charges,
Total No. of Packages, Types of packages (Boxes, Cartons, Bags etc.),
Numbers marked on the packages, Gross weight (in Kgs), Net weight
(in Kgs), Date of receipt of full consignment, Container particulars,
Name of the sealing agency, Whether factory stuffed or not etc to the
Systems Examination Officer who will register the entry of goods in
the system.
g. At this stage, the system randomly picks up certain S/Bs for
examination to be carried out and the rest of the S/Bs are subjected
to inspection by authorities for the description of cargo through
marks, labels and numbers.
h. With the directions so generated by the EDI system, S/B will be
moved to Appraising Officer’s screen, who will verify whether the
data available in the system and as shown in physical documents are
similar and correct or not.
i. The Appraising Officer will mark the S/B to various examiners who
are working under his control with necessary directions regarding
the examination to be carried out.
j. The Examiners will carry out the examination of the cargo and
accordingly will enter the examination report in the EDI system.
 k. The S/B will move once again back to Appraising Officer system
screen for Let Export Order Seal (L.E.O.). In case of Cessable S/Bs, the
Appraising Officer will verify the examination report as submitted by
examiners after physical examination of the cargo, duty payable on
cargo etc and grant the LEO seal to the export documents.
l. After L.E.O. is given by the Appraising Officer, the system will
generate two copies of S/B. The A.O. will obtain the signatures of
Examiner and Exporter/CHA in the designated places besides signing
himself on the documents.
m. Under EDI, FEMA compliance is done in electronic mode, accordingly
FEMA Form SDF has been merged with S/B and system itself
transmit the data to RBI-EDPMS system and there is no need to
physically submit the documents to banks by exporter anymore.
n. The S/B will then move electronically to Preventive Section where
Preventive Officers will supervise the stuffing of cargo into
containers and stuffing report will be recorded in the system by the
P.O.
o. The container will be loaded into the vessel by obtaining goods
received stamp from the Chief Officer/Master of vessel exporters on
the copy of (hard copy) Shipping Bill.
p. On verification of the goods received stamp, the P.O. will record
sailing report in the EDI system.
q. The S/B will then move into Shipping Agents Queue for filing of
Export General Manifest (E.G.M.)
r. After E.G.M. is recorded in the system, the DBK claims are put in DBK
Processing Queue. D.E.E.C. bills will be put in D.E.E.C.
Superintendent’s Queue for log-in details and other S/Bs will form
part of History Database.
s. DBK and D.E.E.C. S/Bs after completing the respective formalities will
join the other S/Bs in the History Database; thus completing the cycle
of Shipping document.
EDI Procedure for Export Of Goods Under Claim For Drawback

a. The present system under EDI can process all Duty Drawback Claims
for exports, except in respect of Duty Drawback Claims under Section
74 of Customs Act, 1962, which are with regard to use of importable
material used in export consignments; exports made in the name of
 third party and the exports relating to Export Processing
Zones/100% Export Oriented Units.
b. Every Exporter is required to open an account with the authorized
bank with the Customs (restriction has been relaxed as majority of
Banks in India are now IT enabled) at designated places, so that
respective Customs House can directly credit the amount of Duty
Drawback into their accounts. Hence exporter should give the
account numbers and the details of the bank through which the
export proceeds are proposed to be realized.
c. For exports under claim of DBK the exporters will file declaration as
prescribed by Central Board of Indirect of Taxes & Customs. The
declaration by exporter will also be filed when the export goods are
presented at the Shed for examination. The Exporters/CHA are
essentially required to give all relevant declarations in the prescribed
format otherwise, the service system will not process the Duty
Drawback claims.
d. Exporter can file two or more duty drawback claims together and
there is no need to file separate drawback claims for each
consignment of exports. The only condition is that exporter will file
the claims only after the actual export of the goods and all such duty
drawback claims will automatically processed through the system on
First Come First Served basis.
e. In case of any query being raised or any deficiency memo being
issued by the A.O. (DBK) or by the A.C. (DBK), the same should be
printed at the EDI Service Center and the reply should be filed at the
earliest through the Service Center.
f. All the claims which has been processed and sanctioned by Duty
Drawback Directorate on a particular day will be enumerated in a
System Scroll and will be transferred to the concerned bank at
Custom House through the service system only. The bank usually
credits the drawback amount in favors of exporter in their accounts
on the next day. Bank use to send a fortnightly statement to the
exporters of such credits being made in their accounts.
 Diagram: Processing of Shipping Bill in Export Transaction
under EDI System
Step: 1 Service Center
Yes
No
Exporter/CHA EDI Service Center Check List Generation Error

Submission / Allotment
of S/B No.

Step: 2 Appraising
Appraising by AC
Yes FOB> Rs.10 Lakh No DEEC
Yes DEEC Supdt. For
Endorsement
DBK> Rs. 1 Lakh

Sample > 75000

Cargo Registration A.O. Assigns the Examination by
Inspector Inspector

Step: 3 Examinations
Handing over Cargo Submission of Documents to Printing S/Bs 3 Copies L.E.O by A.O
to Port Authorities A.O

Yes
EGM Filing DBK S/Bs DBK Processing

Cycle Complete

Source: Central Board of Indirect Taxes and Customs

EDI Procedure for Export of Goods under DEEC, EOU, EPCG Scheme:

a. The procedure for export of goods under DEEC, 10% EOU, EPCG
scheme will be similar to the one which is adopted for
white/drawback shipping bills and except only in the following
manner as detailed under.
b. All the exporters under procedure for export of goods under DEEC,
EOU, and EPCG scheme are required to get registered their IE Codes
with EDI. FEMA compliance vis a vis Exchange Control Document is
now done in EDI mode, accordingly Icegate has been synced with
RBI-EDPMS system and data vis a vis exports is shared electronically.
c. In case of DEEC shipping bills, exporters are required to file the
declaration as prescribed by CBIC at the time of goods arrival.
d. In case of export of goods under EPCG scheme; Green shipping bills,
i.e. shipping bills with drawback claims details should be filed.
 e. In case of 100% EOU; the examination report of exportable cargo
should be filed in the performa as prescribed vide P.N.17/2000.
f. The exporter are required to get registered their DEEC licenses at the
custom houses from where the actual exporters are being made and
the Appraiser in charge of DEEC Cell will verify the shipping bills in
the license from the computer as per the procedure prescribed by the
CBIC.
g. In case of 100% EOU Scheme, the exporters can get the exportable
cargo examined by GST Custom’s officials at the premises of his
factory or warehouse even prior to filing the shipping bill.
h. The Examination Report shall be made available in the form as
prescribed for examination report for factory sealed packages /
containers of units working under 100% EOU scheme by the CBIC
and duly signed and stamped by the Examining officer and the
supervising officer at the factory.
i. All the exporters who are intending to file their shipping bills under
the EPCG Scheme are first required to get registered their EPCG
license with the export section.
j. This EPCG registration with the export section is similar to the DEEC
registration. It is mandatory for an exporter to mention the
registration no. while filing the data entries in such shipping bills.
k. All the EPCG shipping bills would be processed on by the Appraiser
(EPCG Cell) on the system screen itself and also by the A.C. /D.C.
(Exports).
l. Having filed the Export General Manifest (EGM) by Shipping
Company, such shipping bill is put to appraiser queue for
logging/printing of ledger.

Filling of Import General Manifest in EDI

a. In order to get an approval for allowing the entry of the ship (vessel)
to the port, the official of the shipping company has to contact the
Preventive Officer at the Central Berth (at the designated Docks of
Port Trust) and request them for granting "Entry Inwards" to the
vessel. The Official of the shipping company should make sure before
making the application for grant of entry inwards that the person in
charge of the vessel has to made payment of the Light House Dues if
any.
b. The shipping Company has to give a detailed report of all the cargo
on board the ship; in a report known as "Import General Manifest"
(IGM) which must be filed within 24 hours after arrival of the vessel
to the proper officer at the designated port. The I. T. revolution in
LPG&M era has made importer job easy as IGM can be electronically
filed in the computer at the EDI Service Centre. Importer can also file
IGM in advance, i.e. before the arrival of the ship.
c. The Preventive Officer at the Central Berth will retrieve the IGM in
the system at the terminal at the Central Berth by entering the IGM
No., update the database by entering the arrival date, amount of Light
House Dues paid, Challan No., date and grant entry inwards for the
ship.
d. In case of advance filed IGMs by the shipping company, the relevant
Bill of Entry will be automatically regularized by the service system
after entry inwards is granted as and when the ship arrives at the
designated port.
e. In case; shipping company wish to request for any amendments in
the IGMs which is submitted in EDI system, the same can be done by
giving a written application to the Assistant Commissioner/Deputy
Commissioner who are in charge of Appraising and assessing the
duty payable at the concerned Custom House. After the acceptance of
the amendment by A.C. /D.C.; the document should be presented to
the Data Entry Operator (DEO), IGM Amendment Section, of the
concerned Custom House.

Journey of Import Document:

a. For getting his import consignment cleared, the importer or his

representative or CHA have to submit dully filled in DECLARATION
FORM FOR FILING A BILL OF ENTRY to the Commissioner of
Customs at the EDI Service Centre in order to initiative the process of
clearance of imported cargo.
b. On having received the information for customs clearance of
importable cargo, the Service Centre will put the details regarding
the commodities, process of valuation etc in the Service System and
generate the Checklist (C/L) for Importer or his representative or
CHA verification of the same. On verification of the details and having
 satisfied that they are correct and in synch with one feeded by
importer or his CHA in system, importer can sign the Check List and
gives it back to the Service Centre for final submission. Service
centre; on receipt of the same; will generate the Number for the Bill
of Entry and Bill of Entry will be put into Appraisal and Custom
Assessment queue.
c. Having generated the number for the Bill of Entry, System will also
allocate trade documents to different appraising and assessing
groups based on the declaration as have been submitted by the
importer.
d. The Appraising Officer then can access the available information on
his system and can start the process of evaluation of duty payable if
any on first come first serve basis.
e. The Appraisal and Assessment of importable cargo is done on screen
of system through the available information in the B/E the
Appraising Officer. Appraising officer usually does not do any
physical verification of documents himself at this stage but if he has
doubt he will give directions to the Examining Staff in the form of an
open order. If appraising officer has any doubt regarding
classification and valuation of cargo and need to see some vital
documents and information in order to extend the notification
benefit or accept the classification and valuation in the importer’s
declaration, he can raise the query memo to the importer/CHA.
f. The importer or his CHA can find the location and status of his Bill of
Entry by looking at the status display counter at the Service Centre or
from Customs House Office. If the status of importable cargo indicate
the "query raised” then he or his CHA need to rush to the Service
Centre and collect the query memo as issued by appraising Officer in
order to know the exact details of reasons and any additional
information demanded. Importer or his CHA is required to give the
detailed reply on the issued raised and any additional information
demanded by AO on Notifications etc at the Service Centre reply
counter. If any documents are to be physically presented to satisfy
the AO query or objection; the same may be physically presented
before the appraising group.
 Diagram: General Process of Flow of Processing of Bill of Entry in
EDI Form

Yes
CHA/Importer Service Center Check List Error No Submission

No
Value > Rs. Audit Appraising Sec. 48
1.00 Lac Officer

No AC
Bank AC

Approved

Green Shed Appraiser Inspector Shed Appraiser

Channel
Stop

Out of Charge

Source: Central Board of Indirect Taxes & Customs

g. After appraisal and assessment by the A.O. the Bill or Entry will be
marked to the Internal Audit A.O. who will verify the correctness of
assessment.
h. After Internal Audit; the Bill of Entries which has values more than
one lakh rupees; will be marked to Asst. Commissioner/Dy.
Commissioner (Group) for Assessment of payable duty. All other Bill
of Entry will be marked to the Bank for payment of duty.
i. In case, Importer or his CHA wish to have some amendment in the
Bill of Entry which they have filed for consignment clearance; the
same should first get approval from the Asst. Commissioner/Dy.
Commissioner (Group) and then after; it has to be submitted to the
service center. The amendment so entered in the service system will
then automatically come on the screen of the Appraiser who may
accept or reject the amendment. The amendment thereupon is put to
AC/DC group screen who will finally decide the amendment. After
every amendment of a bill of entry the Bill of Entry is put for
reassessment.
 j. Once the process of assessment of duty payable is over by Appraising
Officer or Assistant Commissioner; the System will generate one
(customs) copy of Bill of Entry and three copies of T.R.6 Challan for
payment of customs duty. The documents will be handed over to the
Importer or his CHA at Service Centre for the same purpose.
k. The Importer or CHA on behalf of him; will have to pay the customs
duty which has been assessed by Appraising Officer or Assistant
Commissioner; in the Bank which usually is stationed in the
premises of Custom House by DD or Cash.
l. Once the payment of customs duty is over; the Bill of Entry will move
to Goods registration section in Examination Area.
m. After registration of goods by Systems Examining Officer, the Bill of
Entry will move to the screen of Examining Officer (Physical
Examination). Along with the Bill of Entry, the importer/CHA shall
present documents, as per list below and the documents should
preferably be arranged in a file cover in the following order.
i. Duty paid Challan in original.
ii. Copy of delivery order.
iii. Copy of B/L.
iv. Invoice in original.
v. Packing list in original.
vi. Certificate of Origin in original.
vii. Exemption Certificate in original, if the notification so
requires.
viii. Copy of the bond or undertaking executed, if any.
ix. GATT declaration duty signed by the importer.
x. Technical literature, catalogue etc.
xi. Copy of the request for Green Channel clearance, if any.
xii. Clearance of ADC or any other agency/authority, where
required.
xiii. Any other documents required.
n. The Examiner will then examine the cargo as per directions given by
the Appraising Officer/Assistant Commissioner (Assessment) and
enters the Examination Report in the System.
o. The Bill of Entry will then move to Appraising Officer (Examination)
Screen for “out of charge permission”. On verification of the
 Examination Report given by the Examiner, the Appraising Officer
(Examination) will grant “Out of Charge Order” on the screen.
p. Once; “the out of Charge” declared by Appraising Officer
(Examination); System generate two copies of B/E (Importer,
Bankers), three copies of Out of Charge Order (Customs, Importer &
Custodians), one copy of Examination Report.
q. A.O. (Examination) will retain Customs copy of Bill of Entry, Customs
copy of O/C Order, Examination Order and all original documents viz.
Invoice, P/L etc.
r. The Importer will then approach custodian for delivery of the goods
by using the O/C (Custodian copy) granted by Customs.

SUGGESTED READINGS:

1. Export-Import Management, by Dr. Ram Singh, Sage Publications

(2020)
2. Customs Act With Rules & Regulations, Taxmann Book Store
(2020)
3. Centax’s Customs Law Manual 2020-21 by R.K. Jain – 63rd Edition
February 2020
4. https://www.cbic.gov.in/resources//htdocs-
cbec/deptt_offcr/customs-
manual2018.pdf;jsessionid=D4190E1EA05A88E8817AD8978AFE
AE2E

LEARNING OUTCOMES: APPLICATION OF KNOWLEDGE

Q. No. 1: Calculate online the Custom Duty on Import of a Vehicles falling

under HSN 8703 and explain the followings.

a. Various types of import duties imposed and their rationale

b. Various types of exemptions available for reduction of custom
duties
c. The procedure of custom compliance requirement
d. Online issuance of gate pass

Q. No. 2: Calculate the amount of duty drawback and other incentives like
MEIS for HSN while using ICEGATE for online clearance of exportable cargo
from India. Also explain?
a. The system for processing of trade licenses/authorisation under
DEEC
b. Online tracking of various licenses like Advance Authorisation/ Duty
Free Import Authorisation/ Export Promotion Capital Goods.
c. Processing of Duty Credit Scrip in online system.
d. Processing of Telegraphic Release Advice for custom clearance from
a port other than port of registration.
e. Custom compliance requirement for export cargo.

REVIEW OF LEARNING OUTCOMES:

1. A participant know about the steps involved in electronic clearance

of goods
2. A participants knows the stages involved in export as well as import
clearance of goods
3. A participant knows about the processing of authorisations/licenses
through ICEGATE