Basics of Import

 Introduction:

Export and Import trade is regulated by Directorate General of Foreign Trade (DGFT), it is a body functioning under the Ministry of Commerce and Industry, Department of Commerce, Government of India. DGFT is the regulator, promotor and facilitator of Import and Export. DGFT implements the policies and procedure from time to time for Export and Import.

General Guidelines for Import:

• No Export Import without Importer Exporter Code Number (IEC)

Every Importer/Exporter has to apply for and obtain an Importer and Exporter Code Number (IEC No.). No export or Import shall be made by any person with obtaining an IEC number unless specifically exempted. Only one IEC is permitted against one Permanent Account Number (PAN).

• Import of Samples

Duty free import of samples upto Rs. 3,00,000 for all exporters shall be allowed as per terms and conditions of custom notification. No. authorisation shall be required for Import of bonafide technical and samples of items restricted in ITC (HS) except vegetable seeds, bees and new drugs.

• Mandatory documents for import of goods into India

1. Bill of lading/Airway Bill;

2. Commercial Invoice cum Packing List;

3. Bill of Entry

• Compliance of Import with Domestic Laws

Domestic Laws/ Rules/ Orders/ Regulations/ Technical Specifications/ Environment/ Safety and Health norms applicable to domestically produced goods shall apply, mutatis mutandis, to import, unless specifically exempted.

• Remittances of Import Payments- controlled by AD-Bank

Authorised Dealer Banks may allow remittances for making payments for imports into India, after ensuring that the remittance is for bona fide trade transactions as per applicable laws in force.

• Import license for import of new goods

Import license is required only for negative list items (Restricted Goods) as laid down in Indian trade Classification (Harmonised System) [ITC (HS)] of export and import published by DGFT under the Foreign Trade Policy.) [ITC (HS)] is applicable for import and export of new goods not for second hand goods.

• Import Policy for second hand capital goods

• Import Policy for second hand goods other than capital goods

• Time limits for settlement of Import Payments

Remittances against imports should be completed not later than 6 months from the date of shipment.

• Time limits for Deferred Payments against Import

1. Deferred Payments arrangements are treated as trade credits for which the procedural guidelines as laid down for external commercial borrowings and trade credits have complied with.

2. Remittances against imports should be completed up to 5 (five) years in such arrangements.

• Third Party payment for Import Transactions

Banks may be allowed to make payments of third party for import of goods, subject to the condition under:

1. Irrevocable purchase order/Tripartite agreement should be in place,

2. Import invoice should contain a narration that the related payment has to be made to the (named) third party.

• Bill of entry should mention the name of shipper as also the narration that the related payment has to be made to the (named) third party.

• Advance remittance for Import of Goods

Bank may allow advance remittance for import of goods without any ceiling, however if the amount of advance remittance exceeds USD 200,000 or its equivalent, an unconditional irrevocable standby Letter of Credit or guarantee from an international bank of repute situated outside India is required.

• Advance remittance for the import of services

 Bank may allow advance remittance for import of services without any ceiling however where the amount of advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of international repute situated outside India is required. Bank should also follow up to ensure that the beneficiary of the advance remittance fulfil his obligation under the contract or agreement with the remitter in India, failing which, the amount should be repatriated to India.

• Interest on Import Bills

Bank may allow payment of interest on delayed payments for a period of less than 3 (three) years from the date of shipment at the rate prescribed for trade credit from time to time.

• Evidence of Import for Physical Imports

Importer shall submit Bill of Exchange, port code and date for marking evidence of import under Import Data Processing and Monitoring System (IDPMS) within 3 months from the date of remittance.

• Evidence of Import for Non-Physical Imports

Where imports are made in non-physical form, i.e., software or data through internet/ datacom channels and drawings and designs through e-mail/ fax, importer shall submit a certificate from a Chartered Accountant that the software/data/drawings/design has been received by the importer, may be obtained within 3 (Three) months from the date of remittances.