Updated on April 23, 2022
Customs Clearance is a complex and time-consuming process that every Exporter has to deal with in their business. In India, each and every consignment is manually examined in order to impose various kinds of export duties. The entire documentation process and the export customs clearance also get complicated because of the high import tariffs, multiplicity of exemptions, and export promotions. But now because of the spread of COVID 19, India is following strict measures so as to ensure smooth operations and functioning in all the customs locations in India. You may also like to read Import customs clearance procedure in India.
So, you need to grasp a proper amount of information for the clearance of the export goods.
We will spotlight a few things through this blog:
The procedure of the export Custom Clearance in India
Documents required for the Export Custom Clearance
Measures that have been taken for smooth customs clearance during COVID-19
Export Custom Clearance cost in India
Those who are seeking exports customs clearance in India has to follow certain formalities and procedure:
Registration of the Exporter
Processing of Shipping Bill for Non-EDI and EDI
Quota Allocation label
Arrival Inspection of Goods at Docks
System Appraisal of Shipping Bills
Customs Examination of Export Cargo
Stuffing / Loading of Goods in Containers
Drawal of Samples
Amendments or corrections
Export of Goods under Claim for Drawback
To export the goods, an exporter needs to obtain a PAN-based Business Identification Number(BIN) that they can get through the Directorate General of Foreign Trade prior to the filing of a shipping bill for the customs clearance of the exported goods.
Due to the COVID 19, the customs formations are having a greater amount of sensitivity in handling cargo that is coming from the affected areas, as they are accepting the delay in filing import declarations and further waiving the late filing fees in genuine cases.
In the case of registration export under export promotion schemes:
All the exporters planning to export under the "Export Promotion Scheme" need to get their DEEC book/licenses etc.
Processing of the Shipping Bill - For EDI
Processing of the Shipping Bill- For Non-EDI
According to the EDI System, declarations in the format that has been prescribed are to be filed through the Service Centers of Customs. Then a checklist is developed/generated for the data verification by the exporter/CHA. Once the verification is over, the data is then submitted to the System via the Service Center operator, and then the System generates a Shipping Bill Number that has to be endorsed on the printed checklist.
In the case of Non-EDI, the exporter/CHA shall fill the shipping bills or bills of export in the format as mentioned in the Shipping Bill and Bill of Export (Form) regulations, 1991. An exporter/CHA can apply different forms of shipping bill/ bill of export for duty-free export of goods, export of dutiable goods and export under drawback, etc.
To reduce the human interface and maintain social distancing, the (OOC) Out of Charge work, that was earlier performed by an officer, has been assigned to the EDI system.
The machine-based automated release consignments have been launched pan India on 05.03.2020 and there will be e-delivery of PDF-based Gate passes and Out of Charge copies of BoE for custom exporters/importers.
This refund drive has successfully culminated in shipping bills that were also sanctioned. This initiative has provided immediate liquidity to various businesses, during the Covid-19 crisis. Hence, this remains an area for priority in Covid-19 crisis.Keeping in mind the current situation, a special refund and drawback disposal drive has been launched to provide instant relief to the businesses, especially MSMEs, which have been adversely hit by COVID.
The quota allocation label is instructed to be pasted on the export invoice. The allocation number of the Apparel Export Promotion Council (AEPC) has to be entered into the System during the time of shipping bill entry.
The Exporter needs to submit the quota certification of the export invoice along with other original documents to the Customs at the time of examination of the export cargo. To determine the validity date of the quota, the relevant date needs to be the particular date on which the full and final consignment is presented to the Customs for the examination and duly recorded in the Computer System.
The goods arrive at the docks on the basis of examination and inspection of the goods. At this point of the stage, the port authorities then check the quantity of the goods along with all the documents.
A Shipping Bill is prepared by the System on the basis of declarations that are made by the exporters without any human intervention.
It is the duty of the Customs Officer to verify and check the quantity of the goods that are actually received and entered into the System. Then mark the Electronic Shipping Bill and also hand over all the original documents to the Dock Appraiser of the Dock, who is assigned by the Customs Officer for the examination.
The Customs Officer, along with the Dock Appraiser, may inspect/examine the shipment. Then the examination report is to be entered into the System by the Customs Officer. He then marks the Electronic Bill with all the original documents and a checklist to the Dock Appraiser. The next thing he may do is to proceed to allow "Let Export" for the shipment and inform the exporter/agent.
The exporter/agent then gives the Exporter's copy of the shipping bill that is to be signed by the Appraiser clearly mentioning "Let Export" to the steamer agent. Then for the allowance of the shipment, the Customs Preventive Officer that will be supervising the process of loading the container and general cargo into the vessel may further provide "Shipped on Board" approval on the copy of the shipping bill.
To draw and test the samples, the Customs Officer may proceed to draw two samples from the consignment but this process may vary on COVID 19 situation. Well, there is no such separate register for recording dates of samples drawn. 3 copies of the test memo are thereby prepared by the Customs Officer.
The disposal of the 3 copies of the test memo is given as follows:-
Original – This is to be sent along with the sample to the particular testing agency.
Duplicate – This is the Customs copy that is to be retained with the 2nd sample.
Triplicate – This is the Exporter's copy.
It is also possible that the Assistant Commissioner/Deputy Commissioner may take a virtual inspection using video conferencing.
Any correction/amendments in the checklist developed after the filing of the declaration can be made at the service center. So, if the documents have not been submitted in the System and the shipping bill number is not generated. Certain situations appear where the corrections are required, so in that case, amendments can proceed in the following manner:
The goods that have not been given permission of "Let Export", so amendments may be permitted by the Assistant Commissioner (Exports).
But if the "Let Export" order has already been submitted, in that case, amendments that were done may be permitted only* by the Additional/Joint Commissioner, Custom House, that is the in-charge of the export section.
After the actual export of the goods, the process of the Drawback claim is processed via the EDI system through the officers of the "Drawback Branch" that is on the basis of first come, first served without filling any kind of separate form.
The generation of the Shipping Bill is done by the System in 2 copies- one of the two will be a Custom copy and the other one as an exporter copy. Both the copies are further signed by the Customs officer and the Custom House Agent.
Documents needed for the Export Customs Clearance
As per the Foreign Trade Policy, the three core documents are required to export the goods:
Bill of Lading/Lorry Receipt/Airway Bill/Postal Receipt/Railway Receipt.
Commercial Invoice cum Packing List (According to the Central Board of Excise and Customs circular under the Customs Act, separate commercial invoice and packing list are permitted)
Shipping Bill/Postal Bill of Export/Bill of Export,
Therefore, apart from these three documents, there are other documents that you may require when you try to ship goods overseas. Also, looking at the current COVID 19 situation, the exact requirements of the documents depend upon the GOI at that particular time and location of export.
Export Order/Purchase Order
Country of Origin(COO) Certificate
Letter of credit from the Importer's bank
Dangerous Goods Forms(Required for those goods considered as dangerous)
Bill of exchange
Export General Manifest
Things have now changed as the customs department is providing a 24x7 custom clearance facility that will be implemented at all custom formations so as to avoid any type of supply chain disruption or disorder. Also, a devoted one window COVID-19 helpdesk for EXIM trade has been created on the CBIC website for all the brokers/importers and exporters to provide easy and quick resolution for all the issues. Regular coordination is thereby maintained with district administration and police authorities for the easy and smooth functioning of EXIM cargo, and persons engaged in this process during the lockdown.
The majority of the ports have been asked not to levy penalties, demurrage/charges/fee/rental on any port user for any such delay. The genuine reason attributable to lockdown measures will be considered.
CBIC and zonal Chief Commissioners are actively monitoring the entire situation via video conference with customs stations and trade to solve any type of emerging issue.
Under the scheme of export from India, exports of the notified goods/ items to the notified markets as per listed in "Appendix 3B" of Handbook of Procedures are thereby given free transferable duty credit scrips on the realized FOB value of exports at a specified rate.
Exports of notified goods of FOB value that are up to Rs 5,00,000 per consignment via courier or foreign post office using e-commerce may be entitled to the MEIS benefit. The list of items that are eligible comes under MEIS using an e-commerce platform is available in Appendix 3C.
Goods that are imported under free trade agreements can be cleared easily without even producing the original certificate of origin.
But MEIS has been withdrawn w.e.f. 1st January 2021. A new Scheme named "Remission of Duties and Taxes on Exported Products (RoDTEP)" has been introduced that shall refund the embedded duties which have been suffered in export goods.
According to the Service Exports from India Scheme (SEIS), the service providers of notified services as per Appendix 3D are thereby eligible for freely transferable duty credit scrip at the rate of 5% of net foreign exchange earned.
By following this above-mentioned information, you can maintain all your documents according to the given procedure. I hope this blog solves all your queries regarding the Export Customs Clearance in India and you are ready for the clearance of your goods.