Professional Documents
Culture Documents
Import MGMT l7
Import MGMT l7
PARTNERSHIP
COMPANY/CORPORATION
Registration with Registrar of Companies (ROC) appointed under Section 609 of the Companies Act.
Registration under the Cooperative Societys Act
CO-OPERATIVE SOCIETY
Mandatory Registrations
PERMANENT ACCOUNT NUMBER: Permanent Account Number is to be obtained from Income Tax Authorities. [http://incometaxindia.gov.in/PAN/Overview.asp] BANK ACCOUNT : An exporter/importer should necessarily have a current account with a bank. Only some branches are authorized to deal in foreign exchange transactions and therefore for a smooth working of export / import business, it is necessary to have an account with a branch having a foreign exchange department. ( Authorized Dealers Banks) IMPORTER-EXPORTER CODE (I.EC) NUMBER: The Foreign Trade Policy lays down IEC number as basic eligibility criteria to become Exporter / Importer. It is allotted by Regional Licensing Authority i.e. Joint Director General of Foreign Trade.
[www.dgft.gov.in]
Mandatory Registrations
Registration-cum-Membership: Any person, applying for (i) a licence/ certificate/ permission/ Authorisation to import/ export, [except items listed as restricted items in ITC (HS)] or (ii) any other benefit or concession under this policy are required to furnish Registration-cum-Membership Certificate (RCMC) granted by the competent authority [respective Export Promotion Council] unless specifically exempted under the Policy.
EXPORTERS / IMPORTERS PROFILE Each importer/exporter shall be required to file importer/exporter profile with the licensing authority in Part 1 of Aayaat Niryaat Form
SSI: Small Scale and ancillary units (i.e. undertaking with investment in plant and machinery of less than Rs. 100 million) should seek registration with the Director of Industries of the concerned State Government http://ssi.gov.in or http://www.laghu-udyog.com/howtosetup/grgxx01x.htm
5
Mandatory Registrations
Industrial Licence: All industrial undertakings subject to compulsory industrial licensing are required to submit an application in the prescribed format, i.e. Form FC-IL. Licenses are granted under the provisions of the Industries (Development and Regulation) Act, 1951. The form is available in the Entrepreneur Assistance Unit (EAU) of the SIA and at all outlets dealing in Government Publications, Indian Embassies, and can also be downloaded from the web site of the DIPP (http://dipp.nic.in). Industrial Entrepreneurs Memorandum: Industrial undertakings exempt from industrial license, including existing units undertaking substantial expansion, are required to file an Industrial Entrepreneur Memoranda (IEM) with the Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India. (http://dipp.nic.in)
6
Mandatory Registrations
Excise Registration: Once the need for registration is established, before starting production or dealership to issue Cenvatable invoices, one needs to obtain registration by applying in Form A-1 in duplicate to the Jurisdictional Deputy / Assistant Commissioner of Central Excise or Customs in-charge .
Bond with Assistant Commissioner of Central Excise or Maritime Commissioner of Central Excise:
Any excisable goods can be exported without payment of duty from the factory or warehouse or any other premises as may be approved by the Commissioner. As per sub rule (2) of the said Rule 19, any premises from where any input is removed without payment of duty for use in the manufacture of export goods may also be approved by the Commissioner.
Mandatory Registrations
Bond with Assistant Commissioner of Central Excise or Maritime Commissioner of Central Excise: Goods manufactured from inputs obtained under bond, should be exported only under bond. The export under Bond is subject to the conditions safeguards and procedures to be notified by the Board. In this respect following Notifications have been issued :(a) Notification No. 42/2001-C.E.(N.T.), dated 26-6-2001 for export under bond of all excisable goods except to Nepal and Bhutan. (b) Notification No. 43/2001C.E.(N.T.), dated 26-6-2001 for export under bond after procuring the inputs duty free under end-use exemption Rules. (c) Notification No. 44/2001C.E.(N.T.).dated 26-6-2001 for export under bond on removal of intermediate goods without payment of duty, for manufacture and export by holder of Advance Licence.
Mandatory Registrations
Customs Registration:
The exporters have to obtain PAN based Business Identification Number (BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export goods. Under the EDI System, PAN based BIN is received by the Customs System from the DGFT online. The exporters are also required to register authorised foreign exchange dealer code (through which export proceeds are expected to be realized) and open a current account in the designated bank for credit of any drawback incentive.
9
10
3.
4.
Declaration
for
for
11
Pre-shipment Documents
Documents at pre-shipment stage are those documents, which are required to be made, till the consignment is presented to the customs department for clearance. The following documents can, therefore, be treated as preshipment documents:Proforma Invoice Confirmed order or contract Letter of Credit Pre-shipment Inspection Certificate Packing list Shipping Bill Export Declaration Forms (GR/SDF) ARE
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Pre Shipment
Pre shipment Document to CHA Loading at Port Obtaining B/L Copies of Documents Back to Exporters Movement of Cargo
13
Pre Shipment
Jt. DGFT Appln for Advance Authorisation/ DFIA Appln for EPCG Autho.
Customs Excise To be done Bond / ARE By CHA Formalities (Stuffing Permission Etc. on the basis of Shipping Bill)
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Post Shipment
Documents at Post-shipment stage are naturally those which are prepared after the shipment. These documents include the following:Mate Receipt Bill of Lading Airway Bill Roadway/Railway Bill Post Parcel/ Courier Receipt Invoices (including consular invoice) Certificate of Origin Insurance Certificate or Policy Bill of Exchange BRC
15
Post Shipment
E.P. Copy of shipping bill A.R.E. / Bank Certificate Claiming different Benefits
16
17
Important Documents
Commercial Invoice Certificate of Origin Insurance Policy Bill of Lading/AWB Shipping Bill, Bill of Entry Letter of Credit Bank Certificate of Export and Realisation Quality/Inspection/Analysis Certificate Licences / Authorisations ARE
18
Understanding Documents
All documents whether it is for export or import transaction generally contain following information
Name and address of the exporter and importer Document No. and date. Order No. and date Port of discharge Place of destination Country of origin Description of Goods Marks and nos., model nos. [if any] Weight ITC HS Code No. Value Currency Terms of payment Terms of shipment etc.
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Understanding Documents
However, depending upon the nature of the document, specific information is to be mentioned. For e.g. apart from the above details, Shipping Bill will include what export benefit is being claimed against that particular shipment, etc. Similarly, Packing List will give information about how goods are packed.
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Import of Technology
Project Import Courier Imports Re-import/Re-export Warehousing
Agenda
Demands
Refunds
Customs Valuation Assessment and Examination of Goods
Additional Duty of Customs [CVD] Normally charged @10% Levied under Section 3(1) of CTA, 1975
Secondary and Higher Education cess Charged @ 1% on CVD and Aggregated Customs Duty Levied under Section 126, 128 and 129 of the Finance Bill 2007 [Announced in Budget 2007-08]
8.60
0.17 0.09 8.86
(C + D) Total
Total Aggregated Customs Duty (E) = (116.36 - A) Edu. Cess @ 2% on Aggtd. Customs duty (E1) Higher & Sec. Edu. Cess @ 1% on Aggtd. Customs duty (E2)
116.36
16.36 0.33 0.16
116.85
4.67 21.52
Customs Organisation
Customs Organisation
The main functions/activities Organisation are: of the Customs
Checking importability and exportability of items Collection of duties of customs on import and export goods, including cesses, if any. Enforcement of prohibitions and restrictions, if any, in terms of various Law provisions. Prevention of smuggling; Collection of foreign trade and revenue statistics.
ORGANIZATION CHART
Minister of Finance Secretary Finance
Secretary Revenue
CBDT
Customs Preventive
Air
Sea
Land
Appeals
Principal Commissioner of Customs Commissioner Imp Exp Adj Appeals Prev. Admn. . Addl./ Jt. Commissioner /Dy. Commissioner Asst. Commissioner Appraiser
Staff
Customs Organisation
Organisational Setup
The Customs Houses are directly controlled by the Secretary, Department of Revenue in the Ministry of Finance through a Headquarters Organisation called Central Board of Excise and Customs. Each major Custom House is divided broadly into following departments : Appraising Department (both import and export and postal appraising); Prevention Department (including function of clearance of passengers at the international airports); Drawback department; Audit department; Ancillary departments including Import Noting, Bond, Statistical, Establishment Department, PRO, etc., Chemical laboratory.
Customs Organisation
Docks - The basic function of the Dock Appraising Staff is to carry out necessary examination and checks including checking the classification and value. Cargo Complex Import by Air
Import of Technology
Import of Technology
Determinants :
Nature of Product - Whether the new technology will be easily adaptable. Price of Technology Whether the price justifiable or not,
paid
for
technology
transfer
is
whether it is worth and necessary to bring in new technology in the home market.
Contd.
Import of Technology
Cost of Technology What costs it will add to the operations, whether such costs can be absorbed in the pricing of the products manufactured, what impact it will have on the overall operations of the company, costs related to absorption of technology, additional training costs etc. are to be considered.
Contd.
Import of Technology
Level of Technology
Import of Technology
Existing level of Technology - whether it impacts manpower requirement, compliance with IT needs, etc. Local demand for the product - whether enhanced production matches with the local demand. Such mismatch would have implications on commercial viability. Country of import of technology - Track record, technology development, emphasis on R&D, etc to determine quality of technology.
Import of Technology
Customs Tariff Heading Description
Duty Structure
Modes of Import of Technology 4906 00 00 PLANS AND DRAWINGS FOR The duty structure is 10% BCD, Drawings and Design ARCHITECTURAL, 0% are used Special CVD. Import of Drawings and Designs CVD and 4% for transfer of ENGINEERING, concepts. INDUSTRIAL, COMMERCIAL, However, as per Exemption TOPOGRAPHICAL OR Notification No. 21/2002 Dtd. SIMILAR PURPOSES, BEING 01.03.2006, S.No. 162 exempts ORIGINALS DRAWN BY these goods from payment of HAND; HAND-WRITTEN BCD. TEXTS; PHOTOGRAPHIC REPRODUCTIONS ON Hence there is no import duty SENSITISED PAPER AND payable on importation of CARBON COPIES OF THE Drawings and Designs. Since FOREGOING both duties are exempted, 4% Spl. CVD is not chargeable.
Import of Technology
Modes of Import of Technology
Foreign Collaboration Agreement Foreign Collaboration on the other hand brings about foreign investment, capital goods, scientific technology and also critical material.
Field for Foreign Collaboration: Equity Investment Import of Capital goods, Plant Equipment and Raw Materials Transfer of Scientific Technology Import of Design and Drawings
and
Machinery,
Project Import
Project Imports
The Project Import Scheme is an Indian innovation to facilitate setting up of and expansion of industrial projects. The Project Import Scheme seeks to achieve the objective of simplifying the assessment in respect of import of capital goods and all the related items required for setting up of a project by levy of a flat rate of duty in respect of such goods. This objective has been achieved by incorporating a heading 98.01 under Chapter 98 of the Customs Tariff and prescribing a uniform customs duty rate under this heading. All the goods approved for importation in connection with an industrial project are classified under this heading. Goods classified under this heading cannot be classified under any other heading which may cover the product more specifically.
Project Imports
The different projects to which heading 98.01 applies are; irrigation project, power project, mining project, oil / mineral exploration projects, etc.
Such an assessment is also available for an industrial plant used in the process of manufacture of a commodity.
However this benefit is not available to hotels, hospitals, photographic studios, photographic film processing laboratories, photocopying studios, laundries, garages and workshops. This benefit is also not available to a single or composite machine.
Project Imports
Imports allowed
machinery, prime movers, instruments, apparatus, appliances, control gear, transmission equipment, auxiliary equipment, equipment required for research and development purposes, equipment for testing and quality control, components, raw materials for the manufacture of above items, etc.
In addition, raw material, spare parts, semi-finished material, consumable upto ten percent of the assessable value of goods can also be imported.
Project Imports
The purposes for which such goods can be imported are for initial setting up or for substantial expansion [at least 25% increase in the existing capacity] of a unit of the project.
The Central Government has formulated the Project Import Regulations (PIR) prescribing the procedure for effecting imports under this scheme.
All goods are allowed to be exported though courier except for certain excluded categories.
The goods not allowed to be exported through courier mode are those which attract any duty on exports or those exported under export promotion schemes, such as Drawback, DEPB, DEEC, EPCG etc. Other exclusions include goods where the value of the consignment is above Rs. 25,000/- and transaction in foreign exchange is involved. The limit of Rs. 25,000/- does not apply where the G.R. waiver or specific permission has been obtained from the Reserve Bank of India.
Documents
Documents
which do not attract any duty or subject to any prohibition/ restriction on their import or export.
Samples
Rs.50,000/- for exports and Rs.10,000/- for imports which are not subject to any prohibition or restriction on their import or export and which do not involve transfer of foreign exchange.
Free Gifts
Rs. 25,000/- in case of exports and Rs.10,000/- in case of imports which are not subject to any prohibition or restriction on their import or export and which do not involve transfer of foreign exchange.
Dutiable goods include all goods having commercial value and are imported or exported through courier
Re-import/Re-export
Re-import
When goods are re-imported?
Rejects Replacement of defective goods Cancellation of order After exhibition/display etc. Returned after use in particular project/contract and completion of the contract etc. When Goods are sent for repairs, re-conditioning etc. Goods which may have to be sent for special processes like electroplating, polishing or coating and re-imported.
Re-import
Import duties
Import duties of Customs are leviable
No distinction is made whether The goods being imported had discharged duties earlier or They are being re-imported after exportation for particular purposes.
Re-import
Procedure for Re-importation is governed by respective notifications issued by the Government.
These notifications normally include provisions related to Duty component on re-importation Time period of re-importation Exemption allowed, if any Procedural aspects
Re-export
When goods are re-exported?
Import goods found defective or not fit for use. After completion of contract or projects. Exhibition etc.
Important Aspects
Section 74 of the Customs Act, 1962 provides for grant of 98% of the Customs duties leviable at the time of importation, by way of Drawback if it is re-exported by the importer, subject to laid down conditions in Cus. Ntfn No. 36/1995 Dtd. 26.05.1995.
Re-export
Goods have to be identified with the earlier import documents and duty payments to the satisfaction of the Assistant Commissioner at the time of export. If such goods have been used in India after importation, refund is granted on a proportionate basis under Cus. Ntfn No.19/65Cus (NT) dated 6.2.1965 as amended by Cus. Ntfn No. 23/2008 Dtd. 01.03.2008. The table that prescribes rate of drawback is under:
S. Length of period between the date of No. clearance for home consumption and the date when the goods are placed under Customs control for export (1) (2)
1.
2. 3.
95%
85%
More than six months but not more than 75% nine months
4.
5. 6. 7.
More than nine months but not more than twelve months
More than twelve months but not more than fifteen months More than fifteen months but not more than eighteen months More than eighteen months
70%
65% 60% Nil
Important Notifications
Customs Subject Notification No. and Date
43/96-Cus. Exemption to specified goods exported from India Dtd. 23.07.1996 and re-imported after being subjected to specified processes.
259/Cus. Dtd. 11.10.1958. 271/Cus. Dtd. 25.10.1958. Exemption to re-import of challenge cups, or trophies, won by Defense Units. Exemption to re-import by Armed Forces returning from service abroad.
Important Notifications
26/Cus. Dtd. 19.02.1962 174/cus. Dtd. 24.09.1966 Exemption to re-import of catering equipments, etc. by Indian Airlines. cabin Exemption to re-import of private personal property.
Exemption to re-import of Indian goods and parts thereof (whether of Indian or foreign manufacture) for repairs, reconditioning, remaking or similar other process.
Exemption to re-import of goods sent for execution of approved projects. Exemption to re-import of goods exported under duty drawback rebate of duty or under bond.
Warehousing
Warehousing
The facility of warehousing of imported goods in Customs Bonded Warehouses, without payment of Customs duty otherwise leviable on import, is permitted under the Customs Act, 1962. Basically, goods after landing are permitted to be removed to a warehouse without payment of duty and duty is collected at the time of clearance of goods from the warehouse.
Warehousing
Important Provisions
Warehousing Station Warehouses are to be appointed at particular places only. Customs under Section 58 can licence Private Bonded Warehouses
Bonding of imported goods Filing of Into-Bond Bill of Entry Execution of Bond
Storage Period Generally One year. In case of EOUs it is 5 years for Capital Goods and 3 Years for others.
Warehousing
Important Provisions
Rate of Interest Payment of Interest @15% p.a. after expiry in case of EOUs. In other cases it is @15% p.a. after expiry of ninety days.
Manufacture-in-Bond Operations Manufacturing in bond is permissible under Section 65 of Customs Act. 1962. Manufacture-in-bond operations are to be carried out under Customs supervision on cost-recovery basis.
Warehousing
Important Provisions
Rate of Duty/ Value for Assessment The rate of duty applicable is as per provisions of Section 15 of the Customs Act i.e. on the date on which the goods are actually removed from the warehouse.
However, when the warehousing period or the extended warehousing period has expired, the duty payable is with respect to the date when the warehousing/extended warehousing period expired and not the actual date of removal.
Warehousing
Important Provisions
Export of bonded goods: Warehoused goods can be exported without payment of duty except Nepal and Bhutan.
Demands
Demands
Section 28 of the Customs Act, 1962 provides for recovery of any duty
which has not been levied or has been short levied or erroneously refunded or if any interest payable has not been paid, part paid or erroneously refunded
provided a notice demanding such duties/interests is issued within the time limit specified in that Section.
Demands
Causes and Time Limits for issuance of Demand Notice
Causes of issuance of Demand Notice If the short levy is by reason of collusion or any willful misstatements or suppression of facts Short levy is pointed out by Audit Actions taken Demand notice is to be issued within 5 years from the relevant date specified in Section 28. Show Cause Notice is issued and 15 days are given to show cause why payment is not made
Demands
Upon receipt of the reply from the Noticee the matter is examined in detail and the Noticee is offered an opportunity of Personal Hearing to explain his case before the adjudicating authority. On the basis of the facts and personal hearing, the adjudicating authority come to the conclusion after taking into consideration the provisions of Law.
Refunds
Refunds
The case of refund arises where duty has been paid in excess of what was actually leviable on the goods. Excess payment may be
due to lack of information on the part of importer/exporter or non-submission of documents required for claim of lower value or rate of duty. due to shortage/short landing, pilferage of goods or even incorrect assessment of duty by Customs.
Refunds
In such cases, refund of excess amount of duty paid can be claimed by the importer or exporter. If any excess interest has been paid by the importer/exporter on the amount of duty paid in excess, its refund can also be claimed.
Any person claiming refund of any duty or interest, has to make an application in duplicate in the form as prescribed in the Customs Refund Application (Form) Regulations, 1995, to the jurisdictional Deputy/Assistant Commissioner of Customs. Such application is to be made before the expiry of six months from the date of payment of duty and interest.
Refunds
However, in case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, application for refund can be made before the expiry of one year from the date of payment of duty and interest.
Why it is necessary to establish standard practices for valuation and assessment of goods
In international Trade Values are different and based on internal-external factors. To ensure that there is uniformity in approach at different Customs formations. To avoid any ambiguity. To assure that goods are not undervalued and appropriate duty is paid on importation.
Customs Valuation
Customs Valuation
Whereas Section 14 of the Customs Act, 1962 lays down the basis for valuation of import & export goods in the country. The rates of customs duties leviable on imported goods (& export items in certain cases) are either
specific (fixed) or ad valorem basis or at times specific cum ad valorem.
When customs duties are levied at ad valorem rates, i.e., depending upon its value, it becomes essential to lay down in the law itself the broad guidelines for such valuation to avoid arbitrariness.
Valuation where Tariff Value is fixed u/s. 14 (2) of the Customs Act, 1962.
Section 14 (2) of CA, 1962 speaks of fixation of tariff values for imported or export goods: CBEC may fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value.
Customs Valuation
The provisions of sub-section (1) of Section 14 follow the provisions contained in Article VII of GATT. The Customs Valuation Rules closely follow the WTO Customs Valuation Agreement to implement Article VII of GATT. The importer is required to
truthfully declare the value in the B/E provide a copy of the invoice file a valuation declaration in the prescribed form to facilitate correct and expeditious determination of value for assessment purposes.
Rule 2 - Definitions.
Rule 3 - Determination of the method of valuation. Rule 4 - Transaction value of identical goods. Rule 5 - Transaction value of similar goods. Rule 6 - Determination of value where value can not be determined under rules 3, 4 and 5. Rule 7 - Deductive value. Rule 8 - Computed value.
Contd.
In other words, if the invoice value is accepted by Customs without any reservation then there is no question of Valuation at all.
When invoice value is not acceptable by Customs then the question of valuation comes into picture. Under these circumstances, Customs have to follow the valuation rules for determining the value.
The value of imported goods shall be the transaction value of identical goods sold for export to India and imported at or about the same time as the goods being valued; Provided that it shall not be the value of the goods provisionally assessed.
Contd.
In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods.
Contd.
Provided that such transaction value shall not be the value of the goods provisionally assessed. All other conditions as applicable to identical goods apply mutatis mutandis to similar goods
The value of imported goods shall be based on the unit price at which
the imported goods or identical or similar imported goods are sold in the greatest aggregate quantity to persons who are not related to the sellers in India, subject to the following deductions :
(i) Commissions paid or payable or the additions usually made for profits and general expenses in connection with sales in India of imported goods.
(ii) the usual costs of transport and insurance and associated costs incurred within India; (iii) the customs duties and other taxes payable in India by reason of importation or sale of the goods. Contd.
Where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and on the basis of data available in India;
Provided that the value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade, when the seller or buyer has no interest in the business of other and price is the sole consideration for the sale or offer for sale.
Contd.
.
Contd.
(a) the following to the extent they are incurred by the buyer but are not included in the price actually paid or payable for the imported goods, namely:.
(ii) the cost of containers which are treated as being one for customs purposes with the goods in question;
.
Contd.
(i) materials, components, parts and similar items incorporated in the imported goods;
.
(ii) tools, dies, moulds and similar items used in the production of the imported goods;
.
Contd.
(c) royalties and licence fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable;
(d) The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues, directly or indirectly, to the seller; Contd.
.
Contd.
Contd.
Contd.
Contd.
Contd.
(ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers.
(iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include
Contd.
.
the date of presentation of Bill of Entry under Sec. 68 the date of payment of duty
This is because the Exchange Rates, Rates of Duty and Tariff value keep changing.
inwards of the vessel or the arrival of the aircraft, the crucial date will be the date of entry inwards of the vessel or the date of arrival of the aircraft.
the date of presentation of the ex-bond bill of entry for home consumption is the crucial date provided the goods are removed during the permitted warehousing period (including extension allowed, if any).
The guidelines for examination of the circumstances of the sale of the imported goods in case of related parties have been laid down in Customs Circular No.11/2001-Cus., dated 23.2.2001.
Rule 2 - Definitions.
Rule 3 - Determination of the method of valuation. Rule 4 - Determination comparison. Rule 6 - Residual method. Rule 7 - Declaration by the exporter. Rule 8 - Rejection of declared value. of export value by
Contd.
The value of the export goods shall be based on the transaction value of goods of like kind and quality exported at or about the same time to other buyers in the same destination country of importation or in its absence another destination country.
Contd.
(1) Subject to the provisions of rule 3, where the value of the export goods cannot be determined under the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods.
Rule 7: Declaration by the exporter.The exporter shall furnish a declaration relating to the value of export goods in a specified manner.
Contd.
The Customs officer has powers to reject the value on the basis of reasonable doubt about the truth or accuracy of the value declared.
Main reasons for rejecting the declared value: (a) the significant variation in value at which goods of like kind and quality exported at or about the same time (b) the significantly higher value compared to the market value of goods of like kind and quality at the time of export. (c) the mis-declaration of goods in parameters such as description, quality, quantity, year of manufacture or production.
Assessment
Assessment
Assessment is necessarily done for determining
the value of cargo for the purpose of calculating duty and checking classification of product from the point permissibility of import.
of
For the purpose of assessment normally following documents are submitted for clearance of goods through customs:-
Assessment
Sr. No. i. ii. iii. For Import Bill of Entry Invoice and Packing List Import Licence, where necessary For Export Shipping Bill Invoice and Packing List Export Lic./ Quota Certificate, where necessary; PAN based Business Identification Number (BIN) Export Inspection Agencys Certificate G.R.I. Form/SDF/ PP declaration A.R.E.-1/2 Form of Central Excise
iv. v. vi.
Assessment
Tips for quicker assessment :Where some goods are imported for the first time or their tariff classification is not well established, or their prices have gone down considerably, importers are advised to keep catalogue/literature regarding composition and functions of the goods and their prices ready with them before hand. Customs Officer may ask for it.
Examination of Goods
Government of India has signed revised KYOTO conventions on 4th of Nov. 2005. Under this the examination would be based on risk involved and cargoes are divided into 3 categories :1) Low risk, 2) Medium risk and 3) High risk
Similarly Govt. has introduced the Risk Management System (RMS) of which Accredited Clients Programme (ACP) is a major component.
Examination of Goods
The objective of the programme is to grant assured facilitation to importers. With the implementation of the Risk Management System, this programme will replace all existing schemes for facilitation in the sites where RMS is implemented. The goal of the Risk Management System (RMS) is to enable the department to strike an appropriate balance between trade facilitation and enforcement.
Exemption Notifications
The basic benefit against exemption notification is exemption against payment of customs duty. The exemption could be only of Basic Customs Duty or a percentage of Basic Customs Duty or Basic Customs Duty + Countervailing Duty etc.
The concept of related person for the purpose of determination of value of imported goods or the value of excisable goods manufactured / removed is almost on similar basis under both the laws.
Settlement Commission
An alternative channel for resolution of dispute for assessees finally- without going into the prolonged litigation in adjudication/appeals/revisions etc., has been created by constituting Customs & Central Excise Settlement Commission.
Presently, three Benches in the Settlement Commission have been constituted and they are functioning at Delhi, Mumbai and Chennai, etc.
Section 127B of the Customs Act, 1962 provides filing of application by the assessee for settlement of cases before the Settlement Commission.
Settlement Commission
Settlement Commission cannot entertain the cases which are pending with the Appellate Tribunal or in a Court. Similarly, the matters relating to classification cannot be raised before the Commission. It is also specified that no application can be made unless the appellant has filed a bill of entry, or a shipping bill etc., or a show cause notice issued by proper Officer
The settlement provision will apply in cases where the additional duty liability accepted by the applicant exceeds three lakh rupees and accepted amount has been paid with interest before application to the commission.
Advance Ruling
To facilitate the non-resident and specified resident investor in ascertaining his tax liabilities in terms of Customs, Central Excise duties and Service Tax. As the name suggests, it is sought and given before the commencement of a particular activity and it is a Ruling i.e. it is in the nature of an order binding the parties involved. A scheme of Advance Ruling has been incorporated in the Customs Act, 1962, the Central Excise Act, 1944 and in the Finance Act, 1994.
Advance Ruling
Activity / services on which Advance Rulings can be sought:
Activity means import or export of goods under Customs Act, 1962, and production or manufacture of goods under the Central Excise Act, 1944. Service refers to a taxable service, specified in Chapter V of the Finance Act, 1994 under the Service Tax provisions.
Advance Ruling
Who can seek an Advance Ruling?
Any person who is a non-resident setting up a joint venture in India in collaboration with a non-resident or a resident;
Any person who is a resident setting up a joint venture in India in collaboration with a non-resident; A wholly owned subsidiary Indian Company of which the holding company is a foreign company; A joint venture in India; A resident falling within any such class or category of persons as the Central Government may, by notification in the official gazette specify in this behalf.
Conclusion
Ignorance of Law is not an excuse. You should therefore know the Law while transacting any business with Customs. Wrong procedures/shortcuts or ignorance ultimately lead to financial losses.