CUSTOM CLEARANCE PROCEDURES IN INDIA
PAYMENT MODES
All imported goods in India have to pass through the customs clearance after they cross the Indian border. The imported goods are examined, assessed, evaluated, and then allowed to be taken out of customs charge for use by the importer. The procedures for Customs clearance of goods imported in India are as follows:
Import Manifest: As per the section 30 of the Customs Act, 1962, the person, carrying imported goods should hand over, within 24 hours of the arrival of the conveyance, an import manifest to the customs. The import manifest upholds the complete list of all goods and products that had been carried on board, and those to be carried to the subsequent ports.
Entry in the Import Department of Customs House: On receipt of information regarding the arrival of the goods, the importers or customs agents / broker information to make an entry by filing a Bill of Entry, in the Imports Department of Customs House.
Clearance of Goods: After payment of duty, the importer must give the duplicate copy of Bill of Entry on which order for examination of the goods is given by Customs and get the goods examined. If the description of goods is found to be correct, clearance of goods is allowed.
Warehousing the Goods: The imported goods can be warehoused at the port of shipment, without the payment of duty, but by presenting a“ Bill of Entry for Warehousing”. The warehoused goods can be cleared in one or more installments.
Foreign Exchange: Once the importer is allowed to remit foreign exchange out of the country, he has an obligation to import the permitted goods. If the goods of lesser values are imported then it would lead to leakage of foreign exchange.
Letter of Credit: It is the most common method of payment in International trade. Under this, importer’ s bank guarantees to the supplier’ s bank that the bank will pay given the amount in the agreement, once the supplier meets the terms and conditions of the letter of credit.
Bank Drafts and Cheques: Bank drafts and cheques are the most popular methods of remittances. A bank draft is a payment order issued by an importer’ s bank on its own branch. The bank draft then is handed over to the buyer who sends it to the beneficiary. The beneficiary obtains payment on presentation to the bank on which the bank draft is drawn. a
Bill of Exchange: A bill of exchange is an order made by the exporter and sent to the importer through a commercial bank. Bill of exchange is an important method of payment.
Telegraphic Transfer( TT) This is a method of foreign payments in which importer through telegraphic transfer the funds to the exporter in foreign countries. The money is deposited with the commercial banks and the banker sends a telegram to the foreign branch to make certain payments to the exporter, on that very date. After that, the foreign branch makes the required payments in foreign exchange currency to the exporter. This type of transfer is the fastest and no risk involved method of transmitting funds.
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