Customs

Customs refers to the government authority responsible for regulating the import and export of goods, collecting duties, and ensuring compliance with trade laws. In India, the Central Board of Indirect Taxes and Customs (CBIC) oversees customs procedures under the Customs Act, 1962.

Why Customs Compliance is Important?

• Ensures legal import and export of goods.
• Prevents smuggling, fraud, and undervaluation of goods.
• Facilitates faster clearance of goods at ports and airports.
• Helps businesses claim export incentives and avoid penalties.

Key Functions of Customs

• Collection of customs duties on imports and exports.
• Implementation of export promotion schemes (EPCG, SEZ, EOU, etc.).
• Enforcement of restrictions on prohibited or restricted goods.
• Issuance of clearance documents like Bill of Entry and Shipping Bill.
• Preventing illegal trade and ensuring national security.

Types of Customs Duties

• Basic Customs Duty (BCD): Charged on imported goods as per tariff rates.
• IGST on Imports: Collected at the point of import under GST law.
• Social Welfare Surcharge: Charged on BCD at applicable rates.
• Anti-dumping Duty: Imposed to protect domestic industry from cheap imports.
• Safeguard Duty: Levied in case of sudden import surges.

Key Customs Documents

• Bill of Entry: Filed by importers for clearance of goods.
• Shipping Bill: Filed by exporters to move goods out of India.
• Import Export Code (IEC): Mandatory for import/export activities.
• Packing List & Commercial Invoice: Required for valuation and classification.
• Letter of Credit / Payment Documents: Proof of trade transaction.

Customs Clearance Process

1. Filing of Bill of Entry (import) or Shipping Bill (export) through ICEGATE portal.
2. Assessment of duty and compliance with regulations.
3. Examination and inspection by Customs, if required.
4. Payment of duty (if applicable).
5. Out-of-Charge (import) or Let Export Order (LEO for export) granted.

Key Tips

• Always classify goods correctly under HSN code to avoid penalties.
• Maintain accurate and complete trade documentation.
• Use ICEGATE portal for electronic filing to save time.
• Stay updated with CBIC notifications on tariff and duty changes.