Customs clearance is the set of processes that move goods from the port into use. Fast clearance minimizes holdups, lowers cost, and keeps customers satisfied. One key part is the customs duty payment, which you must make on time so the goods do not stay at the port. This guide explains what customs clearance means, the common duty types in India, the usual steps to clear goods, and how to plan for the taxes and port charges. Read this post to make your next import simpler and faster.
What is Customs Clearance?
Customs clearance is an activity that customs officers undertake to facilitate the movement of goods across a border. The officers examine the documentation, assess the applicable rate of duty, and ensure that the goods are in proper compliance with the rules. The file you send is checked against the invoice, the packing list, and the transport papers. Customs may conduct a desk check or a physical check, and if all is in order and customs duty payment is paid, customs gives a release, and the goods can leave the port. Good papers and the right codes help speed this up.
Types of Customs Duties
There are several types of customs duties. Learn about them by reading below:
Countervailing Duty (CVD)
CVD is a charge that matches any unfair tax advantage foreign manufacturers may gain. It helps local makers by adding a cost to some imports, so if your goods face CVD, plan that cost into your landed price.
Anti-Dumping Duty
Anti-dumping duty prevents goods that are sold abroad at very low prices from harming local firms. This duty can be added where officials find dumping, so check if your supplier or country faces any anti-dumping duty before you buy.
Special Additional Duty (SAD)
SAD is a charge that brought the import tax close to the local sales tax. Rules change over time, so check current law to see if SAD or a similar rule applies to your goods.
Safeguard Duty
Safeguard duty is a short-term tax used when a flood of a certain import hits the local market and harms local firms. It is used only for a short period and for certain goods.
Social Welfare Surcharge
This is a small add-on to the basic customs duty. The money goes to fund certain public welfare schemes, and though it is not large, it is still part of the final duty bill.
Compensation Cess
Compensation cess is a separate levy on select goods like some fuels or luxury items. It is charged over basic duty and other levies, so check if your product has any such cess.
Integrated Goods & Services Tax (IGST)
IGST on imports works like GST on local sales, as it is shown on the Bill of Entry and can be claimed as input tax in your GST return where rules allow. Always ensure your BoE details match your GST data before making a claim.
Custom Handling Fee
Ports and service firms may add handling, storage, or clearance fees, which differ by port and by the service used. Since these local charges can raise the final landed cost, it is wise to plan for them in advance.
Customs Clearance Process in India
Here are the usual steps importers follow to clear goods in India. Do each step with care to avoid holdups.
1. Prepare Your Papers: Collect the commercial invoice, packing list, Bill of Lading or AWB, import licence (if needed), and any test or fit certificates. Clean, clear papers cut checks.
2. Get an IEC: The firm needs an Importer Exporter Code (IEC) to file. A Customs House Agent (CHA) can help if you do not file yourself.
3. File Entry Bill: Enter on the ICEGATE or let your CHA submit via EDI, ensuring that the correct HSN code, quantity, value, and port destination are specified, since minor errors in these fields may end in delays for the entire process.
4. Pay Duties and Fees: After filing, make the customs duty payment, IGST, and any extra levies through the bank route accepted by the port, keeping the payment challan as proof, and make sure to budget for the full cost, not just the base duty.
5. Customs Review: Customs may perform a desk review or call for a physical check, so if they ask for more papers, give them fast to keep the flow moving.
6. Release and Move: Once the duty is posted and checks are complete, customs issues the release. Monitor the Bill of Entry until it shows “Out of Charge,” as goods can only leave the port after this.
When you use a good CHA and check the HSN and values before filing, you reduce most delays. A short note to customs or port teams ahead of arrival can also help.
How Much Are India’s Customs Duties and Taxes?
Duty rates differ by product and rule in force. Here is what you must watch:
- Basic Customs Duty: The duty depends on the HSN code, so use the correct HS code to get the right rate, as a wrong code can place you in a higher duty slab and increase cost.
- IGST: IGST on imports is charged like GST on local sales. You can claim it as input where the law allows, but ensure the Bill of Entry matches your GST inward data before claiming.
- Extra Duties: CVD, anti-dumping, safeguard, and cess apply to certain goods or goods from certain places. Check if your item faces any of these before you ship.
- Port and Handling Fees: The port may charge handling, storage, and clearance fees. These add to your final cost and vary by port.
To Conclude
Custom clearance in India remains a clear path if one keeps on correctly following the necessary steps, pays the required customs duty payment, and tracks the file till it becomes Out of Charge. Keep some budget for accountability and other port taxes, choose a reputable CHA, and maintain all documents in one system. For vendors who need any further assistance, Amazon Global Selling also provides services in customs, logistics, and growth.
Our step-by-step assistance minimizes the wasting of time on forms so that one can focus more on sales by controlling and agreeing upon import documents, tracking, and routine checks. Initiate with Amazon Global Selling professional resources to ease the process of clearance and enhance business.