Customs in India, like in other countries are responsible to clear the imported or export goods after proper checking whether they are importable/exportable under various rules made by different ministries for different products as per licensing/approvals required and for collection of duties. Further they implement various concessions, exemptions that are given to certain class of products, depending upon their end use, source country or under certain schemes of DGFT.
RESTRICTIONS FOR IMPORT / EXPORTS
There are restrictions on imports and exports for various strategic, health, and other reasons. There can be quantitative and qualitative restrictions on the imports and exports. If the goods are not banned, the government can give a permission/license for specific reasons.
Principles of Restriction :
(a) Protection of public morals (b) Protection of human, animal or plant life or health (c) Protection of patents, trademarks and copyrights and the prevention of deceptive practices (d) Prevention of prison labor (e) Protection of national treasures of artistic, historic or archaeological value (f) Conservation of exhaustible natural resources (g) Protection of trade of fissionable material or material from which they are derived; and (h) Prevention of traffic in arms, ammunition and implements of war. (i) Protection of Environment.
Labeling and Marking Rules for Imports :
stipulates that MRP, generic name of product, month and year of entry in trade channel, importer name and address and quantity in standard units must be carried prominently on the “principle display panel” of the of prepackaged commodities for retail sale only.
Technical Standards for Quality :
The government has subjected imports of some products to mandatory compliance of Indian Quality Standards. The foreign manufacturers and exporter are required to register with Bureau of Indian Standards (BIS) to comply with registration requirements for certain electronic goods.
Import of Second Hand Goods :
All second hand goods are restricted for imports and may be imported only in accordance with the provisions of the Policy, ITC (HS), Public Notice or a license / certificate / permission issued in this behalf.
The following items may be imported without a license / certificate / permission.
Second Hand Capital Goods except personal computers, laptops, photocopiers, air-conditioners, diesel- generating sets.
Any form of metallic waste, scrap, seconds and defectives, other than those which are of a value below the value specified for any such items by a notification issued in this behalf, and excluding hazardous, toxic waste, radio active contaminated waste/ scrap containing radio active material.
Woolens rags / synthetic rags / shoddy wool in completely mutilated form subject to the condition that mutilation must conform to the requirements as specified by the customs authorities.
Import of all types of ships may be made without a license / certificate / permission on the basis of guidelines issued by Ministry of Shipping and as per the age/residual life norms prescribed by the Ministry of Shipping.
SCOMET Items :
Special Chemicals, Organisms, Materials, Equipments & Technologies (SCOMET) items can be exported/imported from India only against a license issued for this purpose, as per the international agreements for strategic reasons.
Agriculture Permit System:
The import of agriculture products like Plants / Plant Materials / Fruits / Seeds for Consumption is controlled by the Ministry of Agriculture, by means of Phyto-sanitary Certificate. The goods upon entry into India are subjected to plant quarantine inspection and treatment against a fee.
Sanitary Import Permit for Animal Products Imports :
Animal products importers are required to produce a sanitary permit at the customs gate before entry into the country. Meat and meat products, eggs, milk and milk products, pet food, embryos, ova or semen and other live stock products from livestock are covered.
Restricted License / Negative List License:
Restricted goods can be imported / exported through a license or as per procedure in a public notice for this. Restricted item license / certificate / permission may be granted by the Director General of Foreign Trade or any other licensing authority authorized by the Government The DGFT / Licensing authority may take the assistance and advice of a facilitation committee. The Facilitation Committee consists of representatives of technical authorities and Departments / Ministries concerned . Some of the items that may be imported upon approval/license, subject to certain conditions are –
Scrap of Lead Acid Batteries
Scrap of PET bottle and plastic waste, tyres
Used cooking oil
Feeding supplement of Livestock
Old equipment containing electronic parts, New Lead Acid Batteries, other recyclable items
Customs looks at the valuation of the goods while importing and exporting because most of the import duties and export incentives are based on the value of the goods. Further it is important from the perspective of proper foreign exchange outflow or inflow. Valuation of the goods is done under Section 14 of the Custom Act 1962, and as per Customs Valuation (Determination of Value of Imported Goods) Rules 2007 & Customs Valuation (Determination of Value of Export Goods) Rules 2007. Customs assesses the goods and their value presented by the importer. Upon assessment the goods are allowed for clearance upon payment of duty.
Primarily the declared transacted value is accepted as value of the goods (except in specific cases). However the customs may not accept the declared value based on various reasons such as :-
Related party transactions
Significantly higher value of comparable identical/similar goods imported at or about the same time
Abnormal / specific and special discounts.
The mis-declaration/ non-declaration of specified parameters
Registered Export System (REX), is a new system of certification of origin of goods introduced by European Union (EU) for the purpose of their preferential trade arrangements with the developing countries. This will help EU to unilaterally grants tariff preferences to the developing countries.
This system will replace the existing system of certification of GSP certificates of origin Forms A by a new system of self-certification of origin of goods by the exporters. ….read more
Special Valuation Branch of the customs deals with cases involving related party transactions and follows a procedure as laid down in the circulars issued by CBEC from time to time. The procedure involves investigation spread over a period of time and requires the importer to reply to a set of questionnaire and also maintain documentation and furnish the information as and when required. After the investigation the customs may accept or reject the value. On rejection the value is re-determined based on the sequential methodology (identical/similar valuation, deductive valuation, computed valuation, residual valuation). At times such a re-determination may involve imposition of fine and penalty depending on the reasons of rejection of the value.
Re-Exports and Re-Imports
Capital goods, equipment, components, parts and accessories, whether imported or indigenous, may be sent abroad for repairs, testing, quality improvement or up-gradation or standardization of technology and re-imported without a license / certificate / permission
Re-imports of goods for reasons of being defective or rejected etc. can be done wherein all the benefits that had been claimed are required to be reversed.
Export of Imported Goods :In the same or substantially the same form may be made without a license / certificate / permission provided that the item to be imported or exported is not mentioned as restricted for import or export in the ITC (HS). Goods, including those mentioned as restricted item for import (except prohibited items) may be imported under Customs Bond for export in freely convertible currency without a license / certificate / permission provided that the item is freely exportable without any conditionality / requirement of license / permission as may be required under ITC (HS) Schedule II. If the goods have to be exported after having been paid duty, for reasons of being defective or unusable etc, they can be exported under drawback.
Import on Export basis :New or second hand capital goods, equipment, components, parts and accessories, containers meant for packing of goods for exports, jigs, fixtures, dies and moulds may be imported for export without a license / certificate / permission upon payment of duty. Drawback of duties paid at the time of import is available depending upon the time of utilisation in the country. Alternatively imports can be done on execution of Legal Undertaking / Bank Guarantee and paying the applicable duty at the time of re-export.