Navigating customs clearance and regulations in India
This white paper outlines a number of areas of Indian customs regulations and practice which are useful for anyone involved in import or export to know.
Overview of Indian Customs
- The Directorate General of Foreign Trade (DGFT), which has the responsibility for implementing the government’s foreign trade policy.
- The Bureau of Indian Standards (BIS), which has the responsibility as National Standards Body to develop standardisation, marking and quality certification of certain goods.
- The Wireless Planning Commission (WPC), which is a wing of the Ministry of Communications and has the responsibility as regulatory authority for frequency spectrum management. All wireless equipment needs approval from the WPC.
- The Food Safety and Standards Authority of India (FSSAI) is a regulatory authority for Food related products.
- Plant Quarantine (PQ) is regulatory authority for imports of Plant and Agriculture related products.
- The Central Drugs Standard Control Organization (CDSCO) is the Central Drug Authority for discharging functions assigned to the Central Government under the Drugs and Cosmetics Act. Approval is required for all Pharmaceuticals and Bulk Drug.
- Animal Quarantine (AQ) is the regulatory authority for imports of animals and animal-related products.
Import Export Code (IEC)
Goods and Services Tax Identification Number (GSITN)
Customs Tariff Heading (CTH) / Harmonized System Nomenclature (HSN)
- The first two digits of the code provide the chapter number,
- The next two digits give the Customs Tariff Head (CTH) grouping.
- The third set of two digits in the code gives the Customs Tariff Sub-heading.
- The resulting six-digit code is aligned with the Harmonized System of Nomenclature adopted by the World Customs Organization.
- The last two digits indicate the Customs Tariff sub-head for the classification.
Customs Valuation Regulations (CVR)
- The Transaction Value Method;
- Comparative Value Method based on Transaction Value of identical goods;
- Comparative Value Method based on Transaction Value of similar goods;
- Deductive Value Method based on subsequent sale price in the importing country;
- Computed Value Method based on cost of materials, fabrication and profit in the country of production;
- Fallback Method based on previous methods with greater flexibility.
|Terms||Value on commercial invoice||Origin inland handling charges||Freight charges||Insurance premium|
i) They are officers or directors of one another's businesses
ii) They are legally recognised partners in business
iii) They are employer and employee
iv) Any person directly or indirectly owns, controls or holds 5 per cent or more of the outstanding voting stock or shares of both of them
v) One of them directly or indirectly controls the other
vi) Both of them are directly or indirectly controlled by a third person
vii) Together they directly or indirectly control a third person
viii) They are members of the same family
Free Trade Warehousing Zones (FTWZ)
Free Trade Agreements
- South Asian Free Trade Area (SAFTA)
- Least Developed Countries (LDC)
- Sri Lanka – India
- Thailand – India
Preferential Tariff Agreements
- Korea – India
- Mercosur India
- Asia Pacific Trade Agreement (APTA)
- Malaysia – India
- SAARC agreement
- Bangladesh agreement
- Chile – India
- Mauritius, Seychelles, Tonga – India Preferential Tariff Area
Comprehensive Economic Cooperation Agreement
- Association of Southeast Asian Countries (ASEAN)
- Japan – India
- Singapore – India
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