Import Duty?

An import duty is the tax collected by the customs authorities. A good's value will usually dictate the import duty. Depending on the context, import duty may also be known as a customs duty, tariff, import tax or import tariff. When a shipment of goods reaches the border, the owner, purchaser or a Customs broker (the importer of record) must file entry documents at the port of entry and pay the estimated duties to customs.

Customs duty in India is defined under the Customs Act, 1962 and enables the government to levy duty on exports and imports, prohibit export and import of goods, procedures for importing/exporting and offenses, penalties, etc. All matters related to customs duty fall under the Central Board of Excise & Customs (CBEC).

Import duties have two distinct purposes :

1. Raise income for the local government
2. Give a market advantage to locally grown or produced goods that are not subject to import duties

Customs Authority?

Customs authority means the authority that is responsible under the law of a Party for the administration and enforcement of customs laws and regulations. Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country.

Rights and duties of customs authority :

• Checking information and documents for the implementation of customs control, oral questioning, obtaining information, customs inspection and personal examination, as well as checking the premises, territories and means of transport for customs clearance;
• Implementation of customs control over goods and vehicles in order to verify the accuracy of information provided by individuals and legal entities, as well as the legality of their foreign economic activity after the release of goods and vehicles;
• Implementation customs control over goods and means of transport for the purpose of verifying the accuracy of the information provided by physical and legal entities, as well as the legality of their foreign trade activities, after the release of goods and means of transport;
• Request and receive information and documents related to export-import operations of banks, financial authorities and other organizations, as well as physical and legal entities;
• Store and confiscation of goods and other valuables that are the subject of customs violations;
• To carry out investigation, inspection and operational-search activities;
• Monitor compliance with customs legislation

Import Customs clearance process :

Customs clearance is the act of taking goods through the customs authority to facilitate the movement of goods into a country (import)

1. Filing of IGM - The procedures to file IGM (Import General Manifest) are done by the carrier of goods or his agent and can be done electronically before the goods arrive/reach. This file contains all the details of the goods imported by the vessel.
2. On review of the IGM( Import General Manifest) and the post verification of the documents, the customs authorities will grant the goods for entry and will assign an IGM number to the manifest and permit the master to bring the vessel to this land and unload the cargo. As the aircraft arrives, the goods will further remain in the custody of the Custodian until it clears the entire customs procedure
3. Bill of Entry - The importer should comply with the import customs clearance formalities as the goods arrive at the customs station. For the other goods that are offloaded, importers can clear the goods for home consumption after payment of duties. Hence, every importer must file in Section 46 an entry (Bill of entry) for home consumption or warehousing.
4. Assessment - The value appraising officer of customs then has to verify that the goods that will be imported are the same which the importer reported in submitted documents. If required, an assessing officer of customs can also give his order to inspect a hundred percent of the imported goods. In these cases, all the pieces and packets of the goods are sent to the customs bonded area, and then a thorough inspection of imported goods is arranged. After checking, a report on such a hundred percent inspection is to be delivered to the assessing officer of customs by the deputed inspection team of customs
5. After the completion of the above formalities on assessment, the appraising officer of customs specifies the rate of duty on imported goods, in case it is applicable. Once the classification of imported goods is derived, the rate of import duty is reflected electronically on the basis of the software system of Customs Tariffs
6. Examination of goods - All the imported goods are examined to verify the correctness of the description given in the Bill of entry. However, the part of the consignment is therefore selected and randomly looked. Also, the goods will be inspected prior to assessment in case the importer does not have complete info. At the time of Import or even if the Customs Appraiser or Assistant Commissioner requires the goods are to be examined before assessment. The appraiser examines the goods as per the examination order and then records his approval
7. Payment of duty - The duty can be easily paid either in the designated banks or via TR-6 challans. Different Custom Houses have authorized certain banks for payment of duty
8. If there are no such discrepancies at the time of examination of goods “Out of Charge” order is given, the goods can be cleared