A Guide to the Import and Export Process in India
If you plan to set up a trading company in India, you will need to understand the local import and export regulations and processes.
Who Regulates the Trade in India?
Trade in the country is regulated by the Foreign Trade (Development and Regulation) Act, 1992. Through this act, the federal government has the power to make certain provisions. These provisions include those linked to the regulation and the development of foreign trade. The current provisions fall under the Foreign Trade Policy, 2015-20.
What Are the Import Procedures Involved?
If you are going to be involved in import, you will need to comply with the following steps:
Get an Import Export Code (IEC)
You will need to obtain this pan-based registration. Without an IEC, you won’t be able to clear customs, send shipments or send and receive foreign currency payments. It takes about 10-15 days to get your IEC.
Comply with The Trade Laws
You must comply with Section 11 of the Customs Act (1962), Foreign Trade Policy, 2015-20, and the Foreign Trade (Development & Regulation) Act (1992). Some items may require additional permission and license from the Federal Government and DGFT.
Get Your Import License
Imported items must be classified under the Indian Trading Clarification. This is based on the Harmonised System of Coding or ITC (HS) classification. This will help you determine if your products need a license. Your ITC-HS code is an 8-digit alphanumeric code and it will be issued by the DGFT.
Complete Your Documents
You will need to file your Bill of Entry and any other relevant documents to be cleared for import in India. Besides your Bill of Entry, you will need a permanent account number (PAN). This will be based on your Business Identification Number (BIN) and it is part of the regulations and process formalities. Any goods that are cleared via the Electronic Data Interchange (EDI) system will not need a formal Bill of Entry. It will be filed and generated through the computer system. If your Bill of Entry is filed via an EDI, you must provide other supporting documents.
Figure Out Your Import Duty Rates
Goods in India are levied using basic customs duties. Goods are also levied by the Government through the integrated goods and services tax (IGST)
What Are the Export Regulations and Procedures Involved?
Like the export process, you will need an IEC number from your regional joint DGFT. Once that is done, you will then need to ensure you comply with the local trade laws. You will also need to check if additional licenses are required.
To clear your goods for export, you must register with the Indian Chamber of Commerce (ICC). The ICC will issue a Non-Preferential Certificates of Origin. This will certify that your export goods originate from India.
Both export and import regulations in India require that the following commercial documents be prepared:
- Airwaybill.
- Commercial invoice.
- Bill of export.
- Bill of entry GST return forms (GSTR 1 and GSTR 2).
- Registration of your Membership Certificate (RCMC).
- GSTR refund form;
- Exchange Control Declaration.
- Bank Realisation Certificate.
Need a Hand? We’re Here to Help
Do you plan to set up an import or export business in India? 3E Accounting can help. For more information about our services, contact us here today.