1

Customs Clearance for Imports

Import of goods into India can be done through any mode of transport – sea, air or
land. Import can also be made through couriers or post office.

CUSTOMS DUTY ON IMPORTS

The types of customs duty on imports and the valuation of goods based on which
such duty is levied is briefly discussed below.

 TYPES OF C USTOMS DUTY ON IMPORTS

The various types of customs duty that may be levied on imports are:
(i) Basic customs duty;
(ii) Additional customs duty;
(iii) Special additional duty;
(iv) Protective duties;
(v) Countervailing duty;
(vi) Anti-dumping duty;
(vii) Safeguard duty;
(viii) National calamities contingency duty; and
(ix) Education cess.
Basic Customs Duty
Basic customs duty on import is the standard rate of duty levied as per provisions of
Section 12 of the Customs Act. The rate of duty is specified in the First Schedule to
the Customs Tariff Act. Normally it is levied as a percentage of on the customs value
of the goods imported.
Additional Customs Duty
Additional customs duty is levied under Section 3(1) of the Customs Tariff Act. The
amount of the duty equivalent to the excise duty payable on a like product
manufactured or produced in India. It is levied on the imported value of the goods,
that is, value of goods plus basic customs duty thereon. The purpose is to provide a
level playing ground for imported and indigenous goods. This additional duty is
equivalent to the excise duty on the final product. In certain cases, the manufacture
of the product in India may be exempt from excise duty. Such manufacturer loses
Cenvat credit for the excise duty paid on imports. Therefore his cost may be higher
than that of imported goods which do not suffer excise on imports. To
counterbalance the difference, the government may impose additional customs duty
on specified goods under Section 3(3) of the Customs Tariff Act equivalent to excise
duty payable on raw materials, components etc. This duty is in addition to the
additional customs duty imposed under Section 3(1) on all goods.
Special Additional Duty
Special additional duty is levied under Section 3(5) of the Customs Tariff Act. It is
levied at 4% on al imported goods to counterbalance the sales tax, vat, local tax or
other charges on articles similar to the one imported on their sale, purchase or
transaction in India.
Protective Duties
Section 6 of the Customs Tariff Act empowers the Central Government to levy a
protective duty based on a recommendation made by the Tariff Commission,
established under the Tariff Commission Act, 1951. The purpose is to protect a
domestic industry which warrants such action immediately. This duty can be levied
only for a specific period. The notification issued should be placed before the
Parliament for approval. This provision is not being used, as it may not be compatible
with WTO norms.
2

Countervailing Duty
Countervailing duty can be levied under Section 9 of the Customs Tariff Act to offset
any adverse effect of subsidies granted by the exporting country on the goods
imported into India. The duty will be up to the level of such subsidy. The duty is
imposed by issue of a notification. Each such notification should be laid before each
House of Parliament.
Anti-dumping Duty
Anti-dumping duty can be levied under Section 9A of the Customs Tariff Act on the
goods exported to India at very low prices compared to prices in the domestic
market. The duty can be levied only if the imports of goods dumped into India cause
and threaten material injury to any established industry in India. Anti-dumping duty is
levied on imports from a specific country.
Safeguard Duty
Under Section 8B of the Customs Tariff Act, safeguard duty can be imposed on any
product imported into the country in such large quantities as to cause or threaten
serious injury to the domestic producers of like or directly competitive products,
irrespective of the country of origin of the imported product. Safeguard duty is a
temporary measure to provide a need based protection to the domestic industry for a
limited period, with the ultimate objective of restoring free and fair competition.
National Calamity Contingent Duty
National Calamity Content Duty of customs is levied on specified commodities vide
Section 134 of Finance Act, 2003.
Education Cess
Education cess is imposed on all imported goods. Cess is different from duty in that
the amount collected as cess can be used only for the purpose of development of the
sector for which it is collected.

 CUSTOMS VALUATION FOR IMPORTS

Customs duty is payable on the assessable value or customs value of imported
goods. The value is the transaction value as defined under Section 14(1) of the
Customs Act. In very few cases it can be the tariff value as fixed under Section 14(2)
of the Customs Act. Tariff value is not compatible with WTO norms.
Customs valuation is done on the basis of the provisions of Section 14(1) of
Customs Act and Customs Valuation (Determination of Value of Imported Goods)
Rules, 2007.
Generally, transaction value of the goods imported is the basis for customs value.
Transaction value is the price actually paid or payable for the goods imported at the
time and place of importation. In addition to the price so paid/payable, any amount
that the importer is liable to pay for costs and services, including commission and
brokerage, engineering, design work, royalties and licence fees, costs of
transportation to the place of importation, insurance, loading and unloading and
handling charges to the extent specified in the Rules are to be added to the
transaction value to arrive at the customs value.
Customs value as calculated above will be applied in all cases of imports where
(a) price is the sole consideration for the transaction, (b) there are no unusual
restrictions on the use of goods by the importer, and (c) there is no other direct or
indirect benefit to the seller.
Where the transaction value of the imported goods cannot be used for
assessment, the following values may be used proceeding sequentially in the same
order:
(a) Transaction value for identical goods imported about the same time. This is
the value of other imported goods which are same in all aspects, including physical
characteristics, quality and reputation, except for minor differences in appearance
that does not affect the nature of the goods.
 3

(b) Transaction value of similar goods imported about the same time. This is the
value of other goods which although not alike in all respects, have like characteristics
and like component materials which enable them to perform the same functions and
to be commercially interchangeable with the imported goods.
(c) Deductive value is applied if transaction value of identical goods or similar
goods is not available, but the goods are sold in India (imported earlier). Deductive
value is the price at which identical goods or similar goods are sold in India, less post-
importation costs.
(d) Computed value is the sum of (i) the cost of production of the imported goods,
(ii) profit usually included in sale of goods of the same class by producers in the
country of exportation, and (iii) additions made to the transaction value under
transaction value method.
At the request of the importer, computed value may be adopted in preference to
the deductive method.
(e) Residual method is applied in all other cases. Here the value is determined
using reasonable means consistent with the general provisions of the customs
valuation rules and data available in India.

 EXCHANGE RATE FOR C USTOMS

To convert the foreign currency value of the imports into Indian rupees for the
purpose of customs valuation, the customs department announces the exchange rate
Indian rupee against major currencies for imports and exports separately on a
monthly basis. The conversion will be done at the exchange rate relevant for the
currency as on the date of filing of bill of entry with the customs.

CUSTOMS CLEARANCE FOR IMPORTS

Every import into the country, by any mode of transport, is subject to customs
clearance. The steps involved in getting clearance can be broadly classified into three
stages:
(i) Stage I – Arrival of cargo and application for release of imported cargo
(ii) Stage II – Examination and assessment by Customs
(iii) Stage III – Payment of duty and release of cargo.

 ARRIVAL OF C ARGO AND FILING OF ENTRY

At this stage the cargo arrives at the customs area and permission from customs is
obtained to unload the cargo at the port. The importer applies to the customs for
permitting the import, which forms the basis of assessment by the customs.
• Arrival of cargo
The Customs Act provides that a vessel/aircraft carrying imported cargo can call or
land only at customs port/airport. Except in case of emergencies, calling or landing at
any other place is prohibited. Within 24 hours after arrival of the vessel and within 12
hours after arrival of the aircraft, the Master/Agent should file with the customs
authorities Import General Manifest (IGM) which, among others, contains the details
of goods to be unloaded at the port from the vessel/aircraft. The IGM should contain
all details of bills of lading/air waybills including the details of the house bills of
lading/house air waybills, in case of consolidated cargo.
In case of a vessel, in addition to IGM, the shipping line will apply to the
preventive officer for granting Entry Inwards. The Master of the vessel will not permit
the unloading of cargo until an order has been issued by the proper officer granting
Entry Inwards of such vessel. Entry inwards will be granted only when berthing
accommodation is granted to a vessel. In case of congestion at the port, shipping
berth may not be available immediately and grant of Entry Inwards may be delayed.
After the formalities of IGM and Entry Inward are fulfilled, the goods will be unloaded
at the place provided for such unloading. Unloading from the vessel will be done
under the supervision of the proper office.
4

The unloaded goods are entrusted to the custody of the Airport Authority of India,
or Port Trust Authority or any other customs approved warehouse, as custodians. The
steamer agents or airline issue a cargo arrival notice to the consignee intimating him
of the arrival of the vessel carrying his goods.
In case of import through land, the goods should reach the land customs station
through the approved route only. The entry filed by the carrier is known as Import
Report, which should be filed with the customs within 12 hours of the vehicle arriving
at the land customs station.
• Filing of bill of Entry
An importer has the option to clear the goods for home consumption (use within the
country) after payment of the duties or to clear them for warehousing without
immediate payment of duties. For this purpose he has to file (a) bill of entry for home
consumption, or (b) bill of entry for warehousing, as may be appropriate. The
procedure for bill of entry for home consumption is described now.
The bill of entry should be filed in four copies: Original and duplicate are meant
for customs, triplicate for the importer and the quadruplicate for the importer’s bank
through which payment for import is made. The bill of entry for home consumption is
printed on white paper.
The following documents should accompany the bill of entry:
(a) Signed invoice
(b) Packing list
(c) Bill of Lading
(d) Importers declaration
(e) License wherever necessary
(f) Insurance document
(g) Industrial License, if required
(h) Test report in case of chemicals
(i) Catalogue, Technical write up, Literature in case of machineries, spares or
chemicals as may be applicable
(j) Separately split up value of spares, components machineries
(k) Certificate of Origin, if preferential rate of duty is claimed
(l) No Commission declaration
While filing the bill of entry the correctness of the information given has also to be
certified by the importer in the form a declaration at the foot of the bill of entry.
Under the EDI system, the importer does not submit documents as such for
assessment but submits declarations in electronic format containing all the relevant
information to the Service Centre. A signed paper copy of the declaration is taken by
the service centre operator for non-repudiability of the declaration. A checklist is
generated for verification of data by the importer. After verification, the data is
submitted to the system by the Service Centre Operator and system then generates
a bill of entry Number, which is endorsed on the printed checklist and returned to the
importer. No original documents are taken at this stage. Original documents are
taken at the time of examination. The importer also needs to sign on the final
document after Customs clearance.
Prior Entry for Bill of Entry
Normally a bill of entry has to be filed after IGM is filed by the carrier. However, for
faster clearance of the goods, it is permitted to file the bill of entry in advance. This
bill of lading is valid if the vessel carrying the goods arrive within 30 days from the
date of presentation of the bill of lading. If there is a delay beyond 30 days in the
arrival of the vessel, the bill of entry will not be valid and fresh set should be filed.
Bill of entry should be filed in five copies and the fifth copy is called Advance
Noting copy. The importer has to declare that the vessel is due within 30 days and
that he will present the bill of entry for final noting as soon as the IGM is filed.
In case of goods carried by container ships, the containers may be transferred
from the mother vessel to a feeder vessel (smaller vessel) at an intermediate port
like Singapore or Colombo. At the time of filing of advance bill of entry, the importer
does not know as to which vessel will bring the goods to Indian port. In such cases,
 5

the name of mother vessel may be filled in on the basis of the bill of lading. On
arrival of the feeder vessel, the bill of entry may be amended to mention names of
both mother vessel and feeder vessel.

 EXAMINATION AND ASSESSMENT BY C USTOMS

At this stage, the customs verifies the documents and the cargo and passes orders
on the duty payable by the importer.
• Noting of bill of entry
Noting of bill of entry refers to checking its contents with the IGM filed by the carrier.
In the non-EDI system the importer has to get the bill of entry noted in the concerned
unit of the customs. A bill of entry number is generated and indicated on all copies.
After noting the bill of entry is sent to the appraising section of the Custom House for
assessment functions, payment of duty etc. In the EDI system, the Steamer Agents
get the manifest filed through EDI or by using the service centre of the Custom House
and the noting aspect is checked by the system itself – which also generates bill of
entry number.
• Assessment
After noting/registration of the Bill of entry, it is forwarded manually or electronically
to the concerned Appraising Group in the Custom House dealing with the commodity
sought to be cleared. Appraising Wing of the Custom House has a number of Groups
dealing with earmarked commodities falling under different Chapter Headings of the
Customs Tariff and they take up further scrutiny for assessment.
The appraising officer has to determine: (a) proper classification of the goods
imported, (b) determine the value for the purpose of customs, (c) determine the duty
liability after considering the exemptions or benefits under relevant export promotion
scheme, and (d) verify the importability of goods and compliance with requirements
of any permission/licence in this regard.
Where the appraising officer is not very clear about the description of the goods
from the document or as some doubts about the proper classification, he may give
an examination order in advance of finalisation of assessment including order for
drawing of representative sample.
On receipt of the examination report the appraising officer in the group assesses
the bill of entry. He indicates the final classification and valuation in the bill of entry
indicating the duties leviable. Then the bill of entry is sent to the Assistant
Commissioner/Deputy Commissioner for confirmation. After confirmation, the
comptist in the department calculates the duty amount the rate of exchange at the
relevant rate as declared under Section 14 of the Customs Act.
In the EDI system of handling of the documents/declarations for taking import
clearances the cargo declaration is transferred to the assessing officer in the groups
electronically. The assessing officer processes the cargo declaration on screen. All
the calculations are done by the system itself. If assessing officer needs any
clarification from the importer, he may raise a query. The query is printed at the
service centre and the party replies to the query through the service centre. After
assessment, a copy of the assessed bill of entry is printed in the service centre.
Documents are normally examined at the time of examination of the goods. Final bill
of entry is printed after ‘out of charge’ is given by the Custom Officer.
• Examination of Goods
All imported goods are required to be examined for verification of correctness of
description given in the bill of entry. However, a part of the consignment is selected
on random selection basis and is examined.
In case the importer does not have complete information with him at the time of
import, he may request for examination of the goods before assessing the duty
liability or, if the Customs Appraiser/Assistant Commissioner feels the goods are
required to be examined before assessment, the goods are examined prior to
assessment. This is called First Appraisement. The importer has to request for first
6

check examination at the time of filing the bill of entry or at data entry stage. The
reason for seeking First Appraisement is also required to be given. On original copy of
the bill of entry, the Customs Appraiser records the examination order and returns
the bill of entry to the importer with the direction for examination. The importer takes
it to the import shed for examination of the goods in the shed. Shed Appraiser/Dock
examiner examines the goods as per examination order and records his findings. The
importer takes back the bill of entry to the assessing officer for assessing the duty.
The goods can also be examined subsequent to assessment and payment of duty.
This is called Second Appraisement. Most of the consignments are cleared on second
appraisement basis. Second appraisement is not mandatory. It is done on selective
basis on the basis of risk assessment or specific information report. Even here, whole
of the consignment is not examined. Only those packages which are selected on
random selection basis are examined in the shed.
Under the EDI system, the bill of entry, after assessment by the group or first
appraisement, as the case may be, should be presented at the counter for
registration for examination in the import shed. After registration, the bill of entry is
passed on to the shed Appraiser for examination of the goods. Along-with the bill of
entry the importer should present all the necessary documents. After completing
examination of the goods, the Shed Appraiser enters the report in System and
transfers first appraisement bill of entry to the group and gives 'out of charge' in case
of already assessed bill of entry. Thereupon, the system prints Bill of Entry and order
of clearance (in triplicate). All these copies carry the examination report, order of
clearance number and name of Shed Appraiser. The two copies each of bill of entry
and the order are to be returned to the Importer, after the Appraiser signs them. One
copy of the order is attached to the Customs copy of bill of entry and retained by the
Shed Appraiser.

 PAYMENT OF DUTY AND RELEASE OF C ARGO

The importer gets the goods released after payment of the duty assessed.
• Payment of duty
Customs duty can be paid in the bank branches designed by the concerned customs
house or through TR-6 challans at the treasury of the customs house. After the
assessment and calculation of the duty liability the importer has to deposit the duty
calculated with the treasury or the nominated banks. Then he can go and seek
delivery of the goods from the custodians. Where the goods have already been
examined for finalisation of classification or valuation, no further
examination/checking by the dock appraising staff will be done and the goods will be
delivered after taking appropriate orders and payments of dues to the custodians, if
any.
Where the goods are subject to second check/appraisal, duties are determined
and paid in the Customs House and appropriate order is given on the bill of entry.
After paying the duty, the importer submits the goods for examination in the import
sheds in the docks etc. to the examining staff. If the goods are found to be as
declared the importer can clear the goods after the shed appraiser gives ‘out of
charge’ order.
The relevant date for determining the rate of customs duty for goods cleared for
home consumption is the date of presentation of bill of entry. Date of presentation of
bill of entry is held to be the date on which it is noted by the proper officer.
• Green Channel facility
Some major importers have been given the green channel clearance facility. It means
clearance of goods is done without routine examination of the goods. They have to
make a declaration in the declaration form at the time of filing of bill of entry. The
appraisement is done as per normal procedure except that there would be no
physical examination of the goods. Only marks and number will be checked in such
cases. However, in rare cases, if there are specific doubts regarding description or
quantity of the goods, physical examination may be ordered.
 7

• Execution of Bonds
Wherever necessary, for availing duty free assessment or concessional assessment
under different schemes and notifications, execution of end use bonds with Bank
Guarantee or other surety is required to be furnished. These have to be executed in
prescribed forms before the assessing Appraiser.
• Bill of Entry for Bond/Warehousing
A separate form of bill of entry is used for clearance of goods for warehousing. All
documents as required to be attached with a Bill of Entry for home consumption are
also required to be filed with bill of entry for warehousing. The bill of entry is
assessed in the same manner and duty payable is determined. However, since duty
is not required to be paid at the time of warehousing of the goods, the purpose of
assessing the goods at this stage is to secure the duty in case the goods do not reach
the warehouse. The duty is paid at the time of ex-bond clearance of goods for which
an ex-bond bill of entry is filed. The rate of duty applicable to imported goods cleared
from a warehouse is the rate in-force on the date on which the goods are actually
removed from the warehouse.
• Delay in Clearance
Goods are expected to be cleared from the port within three days of their arrival.
Demurrage is payable to the port if goods are not cleared within three working days.
If the delay is due to customs formalities, and the customs authorities certify so, such
demurrage may be remitted by port authorities.
If the goods are neither cleared nor kept in the warehouse by the importer within
30 after unloading, the goods may be sold by the customs after giving notice to the
importer.

WAREHOUSING AND CLEARANCE EX-BOND

As mentioned earlier, the imported goods may not be immediately cleared for home
consumption, but cleared and kept in the bonded warehouse. The facility of
warehousing of imported goods in Customs Bonded Warehouses, without payment of
Customs duty 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 from the warehouse.

 LODGING INTO WAREHOUSE

The goods can be lodged in bonded warehouse after clearance through submission of
Bill of Entry for Warehousing (Yellow Bill of Entry).
• Warehousing Stations
The Central Board of Excise and Customs has delegated its power for declaring
places to be Warehousing Stations to the Chief Commissioners of Customs. After the
declaration of any place as a Warehousing Station, the Assistant/Deputy
Commissioner of Customs, may appoint a Public Bonded Warehouse or a Private
Bonded Warehouse where imported dutiable goods may be deposited. Goods can be
stored in Public Bonded Warehouse by any importer, while only the licencee can
store the goods in a Private Bonded Warehouse. Other importers can store the goods
in a Private Bonded Warehouse only where Public Bonded Warehouse is not
available.
• Bonding of Import Goods
Where bonding facility is desired on importation, the importer should present to the
Customs a Bill of Entry for warehousing (also known as Into-Bond Bill of Entry) in the
prescribed form along with relevant documents required. The duties liable are
assessed but not required to be paid. A suitable bond has to be executed with the
Bond Section before Customs allow bonding. Once the warehousing bond has been
executed by the importer, the Customs may order the deposit of the goods in the
8

warehouse. The goods are normally escorted to Bonded Warehouse if the warehouse
is at the same port/airport station where goods landed. Otherwise these are allowed
to be moved under a transit bond - without escort.
The whole of the bonded goods are to be fully accounted for - by way of home
consumption/export etc. Once all the goods brought under any bond have been
accounted for to the satisfaction of the Customs officer, after payment of all duties
etc., the Customs officer cancels and returns the bond executed as discharged in full.

 PROCEDURE DURING STORAGE PERIOD

During the permitted period of storage, the importer has to pay the charges and can
have access to the goods and request their transfer to another warehouse.
• Storage Period of Warehoused Goods
Any goods deposited in a warehouse may be stored up to a period of one year in the
Bonded Warehouse. The warehousing period can be extended by the Commissioner
of Customs for a period of 6 months and by the Chief Commissioner of Customs for
such further period as is deemed fit by him. The importers should file their
applications for extensions well before the expiry of the initial/extended period of
warehousing.
Before granting extensions, officers will examine the condition of the goods to see
that they are not likely to deteriorate during the extended period.
Extensions in warehousing period are granted only in such cases the goods are
kept in the warehouse under circumstances beyond the control of the importer. Lack
of finance to pay the duty is not considered as valid reason for seeking extension.
In case the warehoused goods are likely to deteriorate, the Commissioner of
Customs may reduce the one year’s period of warehousing to such shorter period as
he may deem fit.
• Operations on Warehoused Goods
All warehoused goods are subject to the control of the Customs officers. The importer
may inspect, sort, show for sale, and take samples etc. from the bonded goods with
the permission of the proper officer. He should also pay warehouse-keeper rent and
warehouse charges at the rates fixed under law.
• Movement under Bond
With the permission of the Customs Officer, the importer may remove the said goods
from one warehouse to another either under the supervision of the Customs officer or
by executing a bond equal to the amount of import duty leviable on such goods if the
goods are to be removed to a warehouse in another town. Customs duty is to be
secured by a transit bond backed by a bank guarantee/cash security for 50% of the
duty involved in case the goods are of sensitive nature. In respect of non-sensitive
goods, transit bonds would be covered by a Bank Guarantee or a cash security for 25%
of the duty involved. Commissioners of Customs may demand greater
guarantee/security if felt necessary in certain cases.

 CLEARANCE OF IMPORTED GOODS

The goods in bonded warehouse can be cleared by submitting Ex-bond Bill of Entry
and payment of customs duty.
• Filing of Ex-Bond Bill of Entry
The importer of any warehoused goods can clear the goods for home consumption by
filing an ex-bond Bill of Entry (green bill of lading) and after payment of duties etc. in
terms of section 68 of the Customs Act.
• Rate of Duty/ Value for Assessment:
The rate of duty applicable is as 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
 9

date of removal. The value for assessment of duty is the original value as determined
at the time of filing of into Bond Bill of Entry and assessments before warehousing.
• Clearance for Export
Goods in the customs warehouse can be cleared for export without payment of duty
by submitting shipping bill.

CUSTOMS CLEAERANCE FOR IMPORTS AT AIRPORT

The procedure for customs clearance for imports at airport is similar to that for
imports at seaports. The procedure for the carrier is as mentioned under imports at
seaport. The procedure for the importer too is similar. It may differ slightly depending
upon the arrangements at each airport. The following procedure is prescribed at the
Chennai airport. The material is collected from the website of Chennai airport. Airport
Authority of India (AAI) is the custodian.
• Filing of Bill of Entry
The Bill of Entry along with copies of the following documents are filed with the
Admission Clerk located at the Ground floor of the Air Cargo Complex:
(i) Delivery Order
(ii) Bill of Entry (in quadruplicate)
(iii) Airway Bill/House Airway Bill (2 copies)
(iv) Invoices
(v) Packing list
(vi) Import Licence, wherever required
(vii) Catalogue
(viii) Any other relevant documents
The process of ‘noting’ of bill of entry is carried out at this office, in case of
manual clearance.
In case of EDI, import Annexure-I along with documents are to be to the Service
Centre, situated in front of Import heavy cargo shed. Once the data is fed in the
system a check list will be generated and given to Importer for verification and
signature.
Then the system will cross verify the detail with the IGM, if found correct/tallied
Bill of Entry Number is generated and the same is passed for assessment.
• Appraisement
The Bill of Entry is put up to Appraisement Department for processing the same for
the First or Second Appraisement (in case of Second Appraisement, ‘Duty’ is
assessed and ‘paid before’ the Customs Examination.)
Open Examination order
In case of first appraisement open examination order is obtained. To obtain the
Open Examination Order, the Importer/Agent is required to contact the Shed
Appraiser who will (mark and make) a remark/noting for calling the packages for
Examination. He shall also indicate the name of the Examining Officer on the Bill of
Entry and thereafter AAI Location Counter should be approached to get the/location
Slip.
• Generation of location slip
The location slip is generated at the AAI location counter on the basis of the Customs
open examination order on the Bill of Entry and along with other relevant documents
like Delivery Order / Sub delivery order, Copies of master/house air waybill.
• Customs Examination
Packages are forwarded for Customs Examination from the locations, based on the
Location Slip generated by AAI.
After the customs examination, the packages are re-packed/sealed in the
presence of Importer and returned to the AAI for storage into the location.
10

• Out of customs charge

In case of First Appraisement, after completion of the Examination, the remaining
Customs formalities will be completed on the first floor. After payment of duty, Office
Superintendent in the Treasury Section will give ‘Out of Customs Charge’ On
completion of the Examination formalities, and also if the goods are in order, the
Shed Appraiser will give ‘Out of Customs Charge’ in case of goods being cleared
under Second Appraisement.
• Issuance of Bill-Cum Gate Pass
After obtaining ‘Out of Customs Charge’ by the Importer/Agent is required to contact
AAI Billing Counter for issue of Demurrage Charges-cum-Gate Pass after payment of
AAI charges and two copies (Green and Red) will be issued. The green copy should be
submitted to the AAI staff located in the Examination Area and Red Copy should be
retained by the Importer.
• Delivery
On receipt of the Green copy of the Gate Pass, the AAI staff shall make arrangements
for delivery of the packages and will direct the importer to go to the Delivery Gate for
taking delivery of the packages.
On verification of the Gate Pass and the packages by Customs Gate Officer and
AAI Staff, the consignments will be released to the Importer/Agent against clear
signatures.

CLEARANCE AT INLAND CONTAINER DEPOT

The imported cargo can be got cleared at the Internal Container Depot, if so
mentioned in the bill of lading. The importer can get the customs clearance
formalities executed at the ICD. The imported cargo unloaded at a port is allowed to
be transhipped ICD if the cargo is mentioned in the import manifest for such
transhipment. The transhipment procedure of imported cargo is governed by the
provisions of section 54 of the Customs Act and the Goods Imported (Conditions of
Transhipment) Regulations, 1995. Mostly the procedures relate to the duties of the
carriers.
The imported cargo can be a full container load (FCL) cargo or less than container
load (LCL) cargo. LCL cargo may be carried as a part of the consolidated cargo where
the freight forwarder stuffs all such cargo in a container and issues house bill of
lading to the shippers.

 FCL CARGO
The entire container with seal intact will be transhipped to the ICD. The procedure for
transhipping the containers and delivery at ICD are as follows.
• Transhipment Permit
A 'transhipment permit' is the permission granted by the Customs, at the port/airport
of unloading of imported goods, to shipping agents for carriage of goods to another
ICD in India. The shipping agent submits an application along-with transhipment
forms (5 copies), sub-manifest and a copy of IGM to the Customs. The Customs
scrutinizes the details furnished by the shipping agents in the application for
transhipment. In case, the documents are in order and there is no alert notice against
the shipping agent, permission for transhipment is granted by the Customs.
• Execution of Bond and Bank Guarantee
To ensure that imported cargo, on which duty has not been paid, are not pilfered en-
route to ICD and reach there safely, a bond with bank guarantee is executed by the
carrier engaged for the transhipment of the goods. The terms of the bond is that if
the carrier produces a certificate from Customs at the ICD for safe arrival of goods
there, the bond stands discharged. In case such certificate is not produced within 30
days or within such extended period as the proper officer of Customs may allow, an
 11

amount equal to the value, or as the case may be, the market price of the imported
goods is forfeited.
• Sealing of Containers
After issuance of transhipment permit and execution of bonds as mentioned above,
containers are sealed with 'one time bottle seal' by the Customs. In case, containers
are already sealed with 'one time bottle seal' by the shipping agents, containers are
not required to be sealed again by the Customs. In such cases, shipping agents are
required to inform the serial number of seals to Customs, which is just verified by the
Customs.
• Carriage of Container
After sealing and/or checking of seals by Customs, containers are moved from the
gateway port and carried by the shipping agents to the ICD by vessels, rail or road.
• Formalities at the Destination
At the destination, carrier is required to present the sealed cover containing a copy of
transhipment permit to Customs. The Customs checks the particular of containers,
seals etc. with reference to transhipment permit. The carrier is required to obtain a
certificate regarding landing of container from the Customs.
In case, the seals are found to be broken at the time of examination of containers
by the Customs, a survey of contents of the containers is conducted in presence of
Customs officer, carrier, importer or his representative and representative of
insurance company. Shortage, if any, noticed is recorded and is signed by all those
present. The carriers are required to pay the duty for pilferage in terms of the
condition of bond executed by them with the Customs at the port of loading.
• Submission of Landing Certificates
The carriers have to obtain the landing certificates of containers from the Customs at
the ICD and submit the same to the Customs at the originating port. The Customs
reconciles its record and closes IGMs on the basis of these certificates.
• Clearance of the Goods
After safe landing of containers at the ICD, the importers or their authorised agents
are required to follow all Customs formalities such as filing of bill of entry,
assessment, examination of goods etc., for clearance of the goods.

 LCL CARGO
LCL import cargo brought from different destinations at any gateway port can be re-
worked and consolidated to stuff containers ICD wise. With this facility of re-working
of containers at Gateway Ports, the importers bet the benefit of saving on freight as it
helps in optimum utilization of container capacity. It also helps in attracting business
for Indian ports and developing these Ports as transhipment hubs.
(i) On arrival of the LCL cargo meant for ICDs, at the Gateway Port the
concerned shipping line files the I.G.M. with the Customs, as per the
procedure.
(ii) The de-stuffing and consolidation of the LCL cargo ICD wise is done at the
earmarked space under supervision of the Customs and surveyors of the
custodians.
(iii) After ICD-wise consolidation of LCL cargo , the custodian at the Gateway Port
prepares a tally list showing details of the import consignments, the previous
container number, IGM No. and the details of the new container. The
shipping line files sub-IGMs for all LCL (Import) cargo IGM wise.
(iv) After acceptance of sub-IGM by the Customs, the LCL cargo is allowed to be
re-stuffed in empty containers ICD-wise. The containers so re-stuffed are
sealed by the custodian as per the procedure. The details of the new bottle
seal is indicated in the sub-IGM.
12

(v) For transhipment of re-stuffed LCL cargo in new containers to different ICDs,
the concerned shipping line is to follow the procedure laid down above under
FCL cargo.
(vi) After completion of Customs formalities and clearance of LCL cargo at the
respective ICDs, a copy of the sub-IGM is to be sent back to the Customs
authorities at the Gateway Port for confirmation/closure of IGM.

IMPORT THROUGH COURIER

Goods may be imported through couriers. The facility of courier clearance is available
at select customs airports and land stations. Under the scheme, the courier goods are
cleared through a fast track mode on observance of simple formalities by courier
companies. Examination of parcels is kept to the minimum and clearance is allowed
on the basis of selective scrutiny of documents. The duty, where leviable, is paid by
the courier company on behalf of importers before taking delivery of the parcels. The
weight limit for individual packages for import is 70 kg.
The facility of imports and exports through courier mode is allowed to only to
those courier companies which are registered by the Customs. These courier
companies are called "Authorized Couriers". The courier parcels are normally carried
by passenger/cargo aircrafts. In the case of clearance through Land Customs
Stations, other mode of transport is used. On arrival of import goods at the airport or
at the Land Customs Station, the on-board courier/the authorized agent of the courier
company carrying goods by any other mode of transport hands over the goods to
different courier companies for undertaking Customs clearance of their
consignments.
Except for certain excluded categories, all goods are allowed to be imported
through the courier mode. The goods which are not allowed to be imported through
courier are (a) animals and plants; (b) perishables; (c) publications containing maps
depicting incorrect boundaries of India; (d) precious and semi precious stones, gold
or silver in any form; and (e) chemicals falling within Chapters 28, 29 and 38 of the
Customs Tariff.
For facilitating Customs clearance, the goods imported by courier have been
divided into three categories, viz., (a) documents; (b) samples and free gifts; and (c)
dutiable or commercial goods. The documents include any message, information or
data recorded on paper, cards or photographs having no commercial value, and
which do not attract any duty or subject to any prohibition/restriction on their import
or export. Samples have been defined to mean any bona fide commercial samples
and prototypes of goods supplied free of charge of a value not exceeding Rs.50,000/-
for exports and Rs.5000/- for imports which are not subject to any prohibition or
restriction on their import or export and which does not involve transfer of foreign
exchange. Free gifts means any bona fide gifts of articles for personal use of a value
not exceeding rupees 25,000/- for a consignment in case of exports and Rs.5000/- 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. The third category of
imports is dutiable or commercial goods.
The Regulations require the above three categories of goods to be packaged
distinctively in identifiable courier company bags with appropriate labels. This is
because, the scheme of assessment and clearance of the goods is different for the
three categories. Essentially, the goods in the first two categories do not attract any
customs duty. Therefore, simplified Bills of Entry (Courier Bill of Entry-III for
documents and Courier Bill of Entry-IV for samples and free gifts) have been specified
for their clearance. One single Courier Bill of Entry is sufficient for clearance of any
number of such goods imported by any Authorised Courier on a particular flight. It is,
however, necessary that for the purpose of clearance of documents, the manifest
filed by the Authorised Courier specifies the nature of document i.e. whether letters,
brochures, catalogues, manuals, etc. This is necessary to verify that indeed the item
of import viz., ‘document’ is duty free and deserves to be cleared under CBE-III of the
regulations. For clearing dutiable or commercial goods, Form Courier Bill of Entry-V is
 13

required to be filed. This Form can contain a number of individual consignments

imported by one courier on behalf of more than one consignee. There is no limit as
regards the quantity of dutiable or commercial goods which can be imported through
the courier. These goods are assessed to duty on merits like any other imported
goods, and exemption, wherever available, is allowed to such imports when claimed.
The simplified procedure for filing Courier Bills of Entry does not apply to all
goods. The regulations stipulate that for certain categories of imports, a regular Bill
of Entry prescribed in the Bill of Entry (Forms) Regulations, 1976 is to be filed. These
include, (a) goods imported under duty exemption scheme applicable to EOUs and
units in EPZs; (b) goods imported under DEPB, DEEC and EPCG Schemes; (c) goods
imported against the license issued under the Foreign Trade (Development and
Regulation), Act, 1992 and (d) goods imported by a related person defined under the
Customs Valuation Rules, 1988.
The regulations prescribe a procedure for clearance of uncleared goods. In case
of imported goods, a notice is required to be issued to the Authorised Courier and
goods can be disposed of after the expiry of 30 days of the arrival of the said goods.
The charges payable for storage and holding of such goods are to be borne by the
Authorised Courier.

POSTAL IMPORTS
The facility for import of goods by Post Parcels has been provided by the Postal
Department at its Foreign Post Offices and sub- Foreign Post Offices. Customs
facilities for examination, assessment, clearance etc. are available at these Post
Offices.
Letter Mail Articles are generally cleared by the Customs at the time of their
arrival and sorting unless they appear to contain contraband or dutiable articles. In
such cases, the Letter Mail is subjected to further examination at the Foreign Post
Offices or sub- Foreign Post Offices, as the case may be.
A letter, packet or parcel post containing imported and dutiable goods should
bear a declaration stating the nature, weight and value of the contents or if such a
declaration is attached alongside indicating that the letter/packet may be opened for
Customs examination.
The Rules prescribed for landing and clearing at notified Ports/Airports/Land
Customs Stations of parcels and packets forwarded by the foreign mails or passenger
vessels or air liners are as follows: -
1. The boxes or bags containing the parcels labeled as "Postal Parcel", "Parcel
Post", "Parcel Mail", "Letter Mail" will be allowed to pass at the Foreign Parcel
Department of the Foreign Post Offices and Sub Foreign Post Offices.
2. On receipt of the parcel mail, the Postmaster hands over to the Customs the
following documents:
(a) a memo showing the total number of parcels received from each country
of origin;
(b) parcel bills in sheet form (in triplicate) and the senders’ declarations (if
available) and any other relevant documents that may be required for
the examination, assessment etc. by the Customs Department;
(c) the relative Customs Declarations and dispatch notes (if any); and
(d) any other information required in connection with the preparation of the
parcel bills which the Post Office is able to furnish.
3. On receipt of the documents, the Customs Appraiser shall scrutinize the
particulars given in the parcel bill and shall identify the parcels required to be
detained for examination either for want of necessary particulars or defective
description or suspected misdeclaration or under-valuation of contents. The
remaining parcels are to be assessed by showing the rates of duty on the
declarations or parcel bill, as the case may be. For this purpose, the
Appraisers are generally guided by the particulars given in the parcel bill or
Customs declarations and dispatch notes (if any). When any invoice,
14

document or information is required whereby the real value, quantity or

description of the contents of a parcel can be ascertained, the addressee may
be called upon by way of a notice to produce or furnish such invoice,
document and information.
4. Whenever necessary, the values from the declarations are entered into the
parcel bill and after conversion into Indian Currency at the ruling rates of
exchange, the amount of duty is calculated and entered. The relevant copies
of parcel bills with the declarations so completed are then returned to the
Postmaster immediately. In case of postal imports, duty is calculated at the
rate and valuation in force on the date that the postal authorities present a
list of such goods to the Customs. In case the list is presented before the
arrival of the vessel carrying the goods, the list is deemed to have been
presented on the date of the arrival of the vessel.
5. All parcels marked for detention in the manner indicated above are to be
detained by the Postmaster. Rest of the parcels will go forward for delivery to
the addressee on payment of the duty marked on each parcel.
6. As soon as the detained parcels are ready for examination, they are submitted
together with the parcel bill to the Customs. After examining them and filling
in details of contents of value in the parcel bills, Customs note the rate and
amount of duty against each item. The remarks "Examined" is then to be
entered against the entry in the parcel bill relating to each parcel examined
by the Customs Appraiser and the Postmaster’s copies will be returned by the
Customs.
7. In the case of receipt of letter mail bags, the Postmaster gets the bags opened
and scrutinized under the supervision of the Customs with a view to identify
all packets containing dutiable articles. Such packets are to be detained and
are presented in due course to the Customs Appraiser with letter mail bill and
assessment memos for assessment. As soon as packets so detained are ready
for examination and assessment, they shall be submitted together with the
relative letter mail bill and assessment memos to the Customs. After
examining them and filling the details of contents of value in the bill, the
Customs Appraiser will note the rate and amount of duty against each item.
He will likewise fill in these details on the assessment memos to be forwarded
alongwith each packet.
8. All parcels or packets required to be opened for Customs examination are
opened, and after examination, re-closed by the Post Office officials and are
then sealed by them with a distinctive seal. The parcels or packets remain
throughout in the custody of the Post Office officials.
9. If on examination the contents of any parcel or packet are found to be mis-
declared or the value understated or to consist of prohibited goods, such
parcels or packets must be detained and reported to the Customs and the
Postmaster does not allow such parcels or packets to go forward without the
Customs’ orders.
10. The duties as assessed by the Customs Appraiser and noted in the parcel bill
or letter mail bill shall be recovered by the Post Office from the addressees at
the time of delivery to them. The credit for the total amount of duty certified
by the Customs Appraiser at the end of each bill is given by the Post Office to
the Customs Department in accordance with the procedure settled between
the two Departments.
11. The parcel bills or letter mail bills and other documents on which assessment
is made remain in the custody of the Post Office, but the duplicates, where
these are prepared, are kept in the Customs Department for dealing with
claims for refunds, etc.