Have a look on detailed Import and Export process in India
To all the organizations in India working as trading partners should understand the fundamentals of the import and export process. The process involves a lot of documentation, essential checks and multiple stakeholders in between. Acknowledging the entire framework allows the trading businessmen to smoothly either export or import the products. All the procedure is validated and regulated under Foreign Trade policy by the central government. Given below is complete and detailed process for Import as well as export procedures in India –
- IMPORT PROCEDURE –
Import refers to purchase and transportation of goods from other countries to own country via air, road or ocean. Government of India has set a procedure to import goods which is as follows-
- Get Import Export code – Prior to any step taken, one should try to get IEC or import-export code from their DGFT or Directorate general of Foreign trade. It is a onetime registration of the trading organization or traders with lifetime validity. It is usually a time-consuming process so one needs to wait for 12-15 days till IEC comes.
- Compliance of goods – Once the IEC is available with you, next step is to check the compliance of goods. Under section 11, Customs Act (1962), Foreign trade act and policy you will have the information of all the goods and products which can be imported. For the ones which are either prohibited or restricted needs special permissions from federal government.
- Classification of license – The next step is to identify the type of product or good. Based on the product that you are willing to import, either you will be asked for a specific license or no license at all. You can classify the same under the act of Indian Trading clarification (ITC). Under ITC (HS) code you can identify products and goods and categorize it accordingly. ITC(HS) code is an alpha- numeric code consisting of 8 digits which is used to classify the goods into categories. Every license has its expiry date typically ranging from 18 months till 24 months.
- Bill of Entry and other documentation – Once you have obtained your license, next step is the declaration of bill of entry. It is a document by import declaring all the necessary information of the goods such as – quantity, weight and nature. Under section 46 by the Custom act, Permanent account number (PAN) details and Business identification number (BIN) is required from your end. You also need to do the cargo declaration. After all the documentation is completed, your goods undergo various checks by custom officials to ensure the authenticity and security purpose. Once the goods are checked, a pass out order is being imposed which lets the products to move to the further process.
- Import duty charges – Custom tariff act 1975 allows the country India, to impose some import duty charges on the goods imported to the other country. Along with these IGST charges are also charged.
These were the steps for importing a product or good from the scratch.
- EXPORT PROCEDURE –
Export is a process of sending the goods from own country to different ones with several modes such as – ocean, road and air. Our government has some set of procedures to follow to export the goods. To all the businessmen wanting to deal in the export should be able to understand it in depth. Here are the steps to export a good to other country –
- Obtain the order – The first and foremost step is to obtain the order from respective customer or agent. A contract must be built between the importer as well as exporter such as – invoice. Having a glance with utmost importance on the product requirement, payment option, quantity, delivery date is the next step. Once it is fine with exporter, the process can begin further.
- Production and clearance of goods – The next step is to start the manufacturing or production of the goods. For that, if the exporter needs finances, RBI has given the option of export credit to the ones at initial stages. It can be used to purchase the important materials, manufacture and exporting the goods further. As soon as the goods are produced, efforts for clearance from excise duty starts.
- Prior to shipment inspection and checks – Before the shipment, there are certain components to check and inspection such as – product inspection, self-certification and quality control check. Then the certificate is issued by the government which has further copies. Then, it is sent for custom verification, another to importer and one for self.
- Role of clearing and forwarding agents – Once the inspection is conducted and the certificate is issued of inspection, then comes the clearing and forwarding agents. These agents take care of multiple requirements such as – packaging the goods, arranging the transportation, custom clearance etc. The following documents are required from exporter’s side such as – invoice, custom declaration, inspection certificate and credit letter. They also book a space to ship the good and taking the necessary permissions. The documents further required are fee proof and note.
- Custom clearance – Once the documents are received, the forwarding agents unload the goods and store them into the warehouse. Then the custom clearance and special permission is taken. The important documents are – contract, bill, invoice, package information etc. Bill of lading is produced after the checks of the dock.
- Dispatch of documents – Once the Bill of lading is issued, documents such as – commercial invoice, other invoices, packaging list is sent to the exporter.
- Submission of documents to the bank – All of the documents are submitted to the respective banks. The documents are – marine insurance policy, bill of lading, bill of exchange, credit letter, bank certification, package list and commercial invoice.
- Completion of export order – Once the export order is completed in all the stages, the export incentives are claimed at the end which are valid for the exporter.
This was the detailed process of exporting order.