Decoding Bill of entry (BOE): Understanding its key terms

Decoding the Bill of entry : Understanding its key terms

So Basically a BOE Contains five parts namely , 1. Bill of entry summary 2. Invoice & Valuation Details 3. Duties 4. Additional Duties 5. Other Compliances

Part 1 : Bill of Entry Summary

1. IEC – Importer Exporter Code : An unique 10 digit code issued by the Directorate General of foreign Trade(DGFT) to every importer and exporter in Inda. Customs uses this code to track the import/export transactions of an entity.

2. BR ( Branch Code)- 3 digit number associated with the branch that is executing import/export activity. For example, a company headquarter in Bengaluru with a branch in Delhi will have same IEC(Icegate Reg. no) but different branch codes for transaction made by each location.

3. CB Code (Customs Broker Code)- Unique Code assigned to a customs broker to identify licensed agent to act on behalf of an importer or exporter.

4. BE TYPE – Type of bill of entry – Home consumption , Ex-Bond, warehousing

5. OCC (Out Of Charge)- Customs has cleared the goods for release to the importer.

6. BCD (Basic Customs Duty) : Duty levied on imported goods asper customs act, 1975 ( Applied as a % of Assessable value (CIF Value)

7. ACD(Additional Customs Duty) – Duty levied to counterbalance domestic excise duties on similar goods.

8. SWS (Social Welfare Surcharge)- Surcharge levied to fund social welfare schemes. Generally 10% of the BCD.

9. NCCD (National calamity cotingent Duty)- To raise funds for disaster management.

10. ADD (Anti – Dumping Duty)- Duty Imposed to good imported at below – market prices.

11. Countervailing Duty(CVD) –Imposed to counter subsidies provided by exporting country to their exporters.

12. IGST – Tax levied on imports under gst regime. Applied on the Assessable value + BCD + SWS + Other Duties.

13. Cess – A cess imposed on specific goods for specific purpose.

14. Total Ass. Value – The Value of imported goods on which duties and taxes are calculated.

15. SG (Special GST): – Meaning: This refers to the Special Goods and Services Tax levied on certain goods or services under special circumstances.

16. SAED (Special Additional Duty): – Meaning: Special Additional Duty is an additional duty that was previously imposed on imported goods under the Customs Act, in lieu of the excise duty applicable to domestic goods.

17. GSIA (Goods and Services Tax Input Adjustment): – Meaning: Goods and Services Tax Input Adjustment refers to the mechanism under the GST law, where businesses can adjust or claim back the GST paid on inputs (goods or services used in business operations).

18. TTA (Terminal Tax Adjustment): – Meaning: Terminal Tax Adjustment refers to adjustments made to the taxes charged at the terminal (port of entry) when goods arrive, ensuring that the final tax paid aligns with the correct taxable value and duties

19. Bond No. – Meaning: The Bond Number refers to the unique identifier assigned to a Customs Bond. – What Is a Customs Bond?: A customs bond is a security deposit provided by the importer (or their agent) to the customs department. It serves as a guarantee that the importer will fulfill all duties and tax obligations related to the import

20. Debt Amount – Meaning: The Debt Amount refers to the total amount of money owed to the customs department by the importer at the time of clearance

21. BG Amount (Bank Guarantee Amount) – Meaning: The Bank Guarantee Amount refers to the amount of money secured through a Bank Guarantee (BG) provided by the importer to the customs authorities.

22. What Is a Warehouse Code (WH Code)? 1. Meaning: – The WH Code is a code assigned to a Customs Bonded Warehouse where imported goods are stored without immediate payment of duties and taxes.

Part 2 : Invoice & Valuation Details –

1. Valuation Method – Method used to determine the assessable value of imported goods for the purpose of calculating Custom duties. For eg : – Transaction value method , Comparable Value Method, Similar Goods Value Method, Deduction Value Method, Computed Value Method, Fallback Method.

2. CTH (Customs Tariff Heading) – Used for determining customs on imports. It is a part of 8-digit HSN Code used for the claasification of goods.

In Part 3 – Duties, Item Details section of a Bill of Entry,

1. CETH (Central Excise Tariff Heading) : Used for levying excise duty on manufactured goods (pre-GST) , Now on Petroleum, tobacco.

2. FS (Freight or Freight Status) Meaning: This refers to the Freight associated with the imported goods, which is the cost of transportation for the goods. Purpose: The freight charges are included in the Assessable Value of the goods to calculate customs duties. FS is used to specify whether the freight has been included in the valuation or not. Example: If the freight charges are included in the value of the goods, it will be noted as FS Included.

3. PQ (Packing Quantity) Meaning: Packing Quantity refers to the quantity or number of packages or units in which the goods are packed. Purpose: This is required for customs to calculate the volume or weight of the goods to apply relevant duties and taxes. Example: PQ = 10 Boxes might indicate that the goods are packed in 10 boxes.

4. DC (Description of Cargo) Meaning: The Description of Cargo refers to a brief description of the imported goods being cleared. Purpose: It helps customs officers and other stakeholders understand what the goods are, ensuring correct classification and duty assessment. Example: DC = “Plastic Kitchenware” or DC = “Mobile Phones”.

5. WC (Weight/Weight Code) Meaning: Weight refers to the total weight of the goods being imported, including packaging. It may also include a Weight Code to specify the unit of measurement (kg, lb, etc.). Purpose: The weight is essential for calculating duties based on the weight of the cargo, as certain customs duties are assessed per kilogram or tonne. Example: WC = 500 kg indicates that the total weight of the shipment is 500 kilograms.

6. AQ (Assessment Quantity) Meaning: Assessment Quantity refers to the quantity of the goods that is used for calculating customs duties. Purpose: It is a key parameter to calculate duties based on the quantity of goods, such as the number of units, weight, or volume. Example: If the duty is assessed based on the number of items, AQ = 100 Units could indicate that 100 individual units of a product are being imported.

7. UPI (Unit Price) Meaning: Unit Price refers to the price of each individual unit of the imported goods. Purpose: The unit price is crucial in determining the Assessable Value of the goods for duty calculations. It is usually declared based on the Invoice Price. Example: If the unit price is ₹100, then for 100 units, the total price will be ₹10,000.

8. COO (Country of Origin) Meaning: Country of Origin refers to the country where the goods were manufactured, produced, or processed. Purpose: The country of origin is important because some goods may qualify for preferential duty treatment or exemptions depending on the trade agreements between countries. Example: COO = China, indicating that the goods were manufactured in China.

In Part 4 – Additional Details of a Bill of Entry

1. SVB Details refers to the Special Valuation Branch (SVB) details. SVB (Special Valuation Branch) . The Special Valuation Branch (SVB) is a branch under the Central Board of Indirect Taxes and Customs (CBIC) that deals with the valuation of imported goods, particularly in cases where the transaction value might not reflect the true market value due to factors like related party transactions (e.g., importer and exporter being part of the same company or group). The purpose of the SVB is to ensure that the correct value is declared for customs duty purposes. When Does SVB Apply? SVB is typically involved in cases where: – Related Party Transactions: The importer and the exporter are related (e.g., subsidiaries, parent company, etc.), which could affect the transaction price. – Customs Valuation Issues: When customs authorities suspect that the declared value of goods for duty purposes is not correct, or the price may not be reflective of market conditions.

2. Single Window Declaration (SWD) – The Single Window Declaration (SWD) is a system designed to facilitate and streamline the process of import/export clearance by allowing the submission of all required documents and information through a single platform.

Part V – Other Compliances) –

1. PGA Examination Instructions refer to specific instructions provided by the Participating Government Agencies (PGA) regarding the examination or clearance of certain goods. PGAs are regulatory bodies or departments that have a role in overseeing the importation of goods, and their instructions must be followed to ensure that the goods comply with the relevant regulations.