DOCUMENTS REQUIRED FOR IMPORT-EXPORT CUSTOMS CLEARANCE

Any commercial cargo, whether it is for import or export, requires customer clearance. Simply put, this means that businesses engaged in exporting and importing goods to and from the country need to clear specific customs barriers as outlined by the government. 

The customs clearance process typically involves preparing documents that may be submitted electronically or physically with the consignment. This helps concerned authorities to calculate taxes and duties that will be levied on the cargo.

The type of documents required for customs clearance usually depends on the type of goods being shipped. It may also vary depending on the country of origin and the destination of the cargo. However, as a thumb rule, there are a set of general documents that most businesses need to comply with when importing or exporting goods. 

 

LIST OF DOCUMENTS REQUIRED FOR EXPORTS CUSTOMS CLEARANCE

• ProForma Invoice 
• Customs Packing List
• Country of Origin or COO Certificate
• Commercial Invoice
• Shipping Bill
• Bill of Lading or Airway Bill
• Bill of Sight
• Letter of Credit
• Bill of Exchange
• Export License
• Warehouse Receipt
• Health Certificates

LIST OF DOCUMENTS REQUIRED FOR IMPORTS CUSTOMS CLEARANCE

• Bill of Entry 
• Commercial Invoice
• Bill of Lading or Airway Bill
• Import License
• Certificate of Insurance
• Letter of Credit or LC
• Technical Write-up or Literature (Only required for specific goods)
• Industrial License (for specific goods)
• Test Report (If any)
• RCMC Registration cum Membership Certificate 
• GATT/DGFT declaration
• DEEC/DEPB/ECGC License for duty benefits

You can understand what these documents mean from their explanation as given below. 

Pro Forma Invoice

The Pro Forma Invoice documents the intention of the exporter to sell a predetermined quantity of goods or products. This invoice is generated as per the outlined terms and conditions agreed upon between the exporter and the importer, through a recognised medium of communication such as email, fax, telephone or in person. It is similar to a ‘Purchase Order’, which is issued prior to completing the sales transaction. 

Customs Packing List

The customs packing list states the list of items included in the shipment that can be matched against the pro forma invoice by any concerned party involved in the transaction. This list is sent along with the international shipment and is especially convenient for transportation companies as they know exactly what is being shipped. Individual customs packing lists are secured outside each individual container to minimise the risk of exporting incorrect cargo internationally. 

Country of Origin or COO Certificate

The Country of Origin Certificate is a declaration issued by the exporter that certifies that the goods being shipped have been completely acquired, produced, manufactured or processed in a particular country.

Commercial Invoice

A commercial invoice is a mandatory document for any export trade. The customs clearance department will ask for this document first as it contains information about the order, including details such as description, selling price, quantity, packaging costs, weight or volume of the goods to determine customs import value at the destination port, freight insurance, terms of delivery and payment, etc. A customs representative will match this information with the order and decide whether to clear this for forwarding or not. 

Shipping Bill

A shipping bill is a traditional report where the downside is asserted and primarily serves as a measurable record. This can be submitted through a custom online software system (ICEGATE). To obtain the shipping bill, the exporter will need the following documents:

-GR Forms for shipment to all the countries

-Packing list (with various details such as information about the content, quantity, the gross and net weight of each package)

-Export License

-Indent

-Acceptance of Contract

-Invoices (with all relevant information such as the number of packages, quantity, price, correct specification of goods, etc.)

-Purchase Order

-Letter of Credit

-AR4 and Invoice

-Examination or QC Certificate

-Port Trust document

 

Bill of Lading

Bill of Lading is a legal document issued by the carrier to the shipper. It acts as evidence of the contract for transport for goods and products, mentioned in the bill provided by the carrier. It also includes product information such as type, quantity, and destination that the goods are being carried to. This bill can also be treated as a shipment receipt at the port of destination where it must be produced to the customs official for clearance by the exporter. Regardless of the form of transportation, this is a must-have document that should accompany the goods and must be duly signed by the authorised representative from the carrier, shipper, and receiver. The Bill of Lading comes in handy if there is any asset theft. 

Bill of Sight

Bill of Sight is a declaration from the exporter made to the customs department in case the receiver is unsure of the nature of goods being shipped. The Bill of Sight permits the receiver of goods to inspect them before making payments towards applicable duties. Applying for a bill of sight becomes necessary as it acts as a substitute document if the exporter does not have all the must-have information and documents needed for the bill of entry. Along with the bill of sight, the exporter also needs to submit a letter that allows for the clearance of goods by customs. 

Letter of Credit

Letter of credit is shared by the importer’s bank, stating that the importer will honour payment to the exporter of the sum specified to complete the transaction. Depending on the terms of payment between the exporter and importer, the order is dispatched only after the exporter has this letter of credit. 

Bill of Exchange

Bill of Exchange is an alternative payment option where the importer is to clear payments for goods received from the exporter either on-demand or at a fixed or determinable future. It is similar to promissory notes that can be drawn by banks or individuals. You can even transfer a Bill of Exchange by endorsement.

Export License

Businesses must have an export license that they can provide to customs in order to export or forward any products. This only needs to be produced when the shipper is exporting goods to an international destination for the very first time. This type of license may vary depending on the type of export you intend to make. This can be done by applying with the licensing authority, and the permit is eventually issued by the Chief Controller of Exports and Imports. 

Warehouse Receipt

Warehouse Receipt receipt is generated once the exporter has cleared all relevant export duties and freight charges post customs clearance. This is needed only when an ICD in involved. 

Health Certificates

Health Certificate is applicable only when there are food products that are of animal or non-animal origin involved in international trade. The document certifies that the food contained in the shipment is fit for consumption by humans and has been vetted to meet all standards of safety, rules and regulations prior to exporting. This certificate is issued by authorised governmental organisations from where the shipment originates.

Bill of Entry

A bill of entry is a legal document to be filled & duly signed by an importer/CHA/carrier. After filing a bill of entry along with the other necessary documents, assessment and examination of goods are carried out by concerned authorities. Once the process is completed, an importer can avail for ITC claim on goods.

Import License

There are certain items that cannot be freely imported in India, an import license is a permission granted by the government to undertake import activities for restricted goods. In order to avail the benefits, one must file an application to the licensing authority.

Insurance certificate

An Insurance Certificate is a document required for import customs clearance. This certificate helps the authorities to verify the shipment, in terms of whether the selling price contains the insurance or not. Also, it helps determine the precise value which eventually decides the import duty aggregate.

RCMC Registration cum Membership Certificate

RCMC is a certificate issued by Export Promotion Councils of India. If an exporter or importer wants to avail any benefits under any schemesgoverned by FTP or any of the EPCs then he has to submit his RCMC as well at the time of customs clearance. 

GATT/DGFT declaration

Every importer has to file a GATT and DGFT declaration while completing customs clearance formalities for imports. It has to be filed as per the terms stated in General Agreement on Tariff and Trade. Following are some of the requirements for filing this document. 

1. Customs Valuation for imported goods subjected to duties & Taxes.
2. Three copies of the declaration to be maintained
   • two copies are for customs administration
   • and one copy is for the declarant
3. The Form should be kept with the detailed customs declaration for a period of 3 years
4. The declarant is obliged to accurately and fully fill the form in detail.

Technical write up, literature

A Technical Write up is a document only required for some specific goods. It describes the features/usage of the product, mostly done for better handling of goods. This helps the authorities to better define the product and understand the value-added cost under it.

Industrial License

An industrial license may be required for importing specific commodities. If an importer wants to avail any import duty benefit, an industrial license can be used as proof to avail the benefit. In this particular case, a copy of industrial license also becomes one of the customs clearance documents required for importing the goods.

Source: dripcapital.com by Avani Ghangurde