How to import in India

If you like to import goods and/or services, some kind of registration procedure is being completed.  Sometimes import license/permit may be obtained from the concerned government department.

Usually, for the importation of goods and/or services in India, we need IEC (Importer Exporter Code).

It’s a one-time registration to act as an Exporter/Importer in India.

However, if restricted items are imported, a separate import license may be required to import such restricted goods.  Categories of products classified under freely importable, restricted to import, and prohibited to import are published from time to time. The products under the Prohibited list of goods are not permitted to import which may be referred to the official website.

• Establish an organization
• Obtaining Licence from LSGB
• Open Bank Account
• Obtaining Importer-Exporter Code (IEC) Number
• Obtaining Goods and Service Tax Identification Number (GSTIN)
• Selection of Goods or/and Service
• Selection of Markets
• Mode of transportation
• Pricing/costing/INCOTERMS
• Processing a Purchase order
• Pre-Import
• Import clearance
• Post-clearance
• Proof of Import for Foreign remittance
• Import Obligation

How to start an Import Company in India

India’s Foreign Trade i.e. Exports and Imports are regulated by Foreign Trade Policy notified by the Central government in the exercise of powers conferred by section 5 of foreign trade (Development and Regulation) Act 1992. Presently Foreign Trade Policy 2015-20 is effective from 1^st April 2015.  As per FTD & R act, import is defined as an act of bringing into India any goods by land, sea or air and with the proper transaction of money.

STARTING IMPORTS

Import in itself is a very wide concept and a lot of preparations is required by an importer before starting an import business:

Establishing an Organisation

Start a Sole Proprietary concern/ Partnership firm/Company/Society/Trust etc. as per the procedures.

Obtaining Permanent Account Number (PAN)

Obtain Permanent Account Number (PAN) from Income Tax department for our organization other than Sole Proprietary concern.

Proprietor’s personal PAN is the business PAN of Sole Proprietary concern.

It is necessary for every exporter and importer to obtain a PAN from the Income Tax Department because IEC is issued on the basis of PAN.

Obtaining Licence from LSGB

Obtain Licence from Local Self Governing Body like Panchayath/Municipality/Municipal Corporation as per shops and establishment Act.

Opening a Bank Account

Open a current account with an Authorised Dealer (AD) Bank to deal in Foreign Exchange.

Obtaining Importer-Exporter Code (IEC) Number

IEC is PAN-based which is mandatory for undertaking export/ import. Application for obtaining IEC can be submitted to the Regional Authority of DGFT online along with the attachments and application fee.

Obtaining Goods and Service Tax Identification Number (GSTIN)

GSTIN is a PAN-based number that is mandatory for undertaking export/import.

Application for obtaining GSTIN can be submitted online with the GST portal along with the attachments.

Selection of product

Major items are freely importable except few items appearing in the restricted/channelized/ prohibited list.

After a detailed study, proper selection of the product or products is crucial for your import dream.

Selection of Markets

An overseas market should be selected after research covering market size, competition, quality requirements, payment terms, preferential market, etc. Export promotion agencies, Indian Missions abroad, colleagues, friends, and relatives might be helpful in gathering information for a market selection.

Finding Buyers

Participation in trade fairs, buyer-seller meets, exhibitions, B2B portals, web browsing is an effective tool to find buyers.

EPC’s, Indian Missions abroad, overseas chambers of commerce can also be helpful.

Pricing/Costing/INCOTERMS

The price should be worked out taking into consideration of all expenses from the procurement to import proceeds and foreign remittance.

Free on Board (FOB), Cost & Freight(C&F), Cost, Insurance & Freight (CIF) and etc. like eleven INCOTERMS and in practice. Import costing should be to buy the maximum quantity at the competitive price with maximum profit.  Import costing sheet for every imported product is advisable.

Processing an Purchase Order

On issuing an export order, it should be examined carefully in respect of items, specification, payment conditions, packaging, delivery schedule, etc., and then the order should be confirmed. Then the importer may enter into a formal contract with the overseas seller through LC- Letter of Credit or any other formal way.

Pre-shipment

Procurement of Goods

After confirmation of the purchase order, immediate steps may be taken to procure needed arrangements to a proper and smooth landing and clearance of Goods.

Quality Control

If it needed a Pre-shipment inspection for assuring the quality of our import cargo, appoint our Inspection agencies for the same. Maintaining high quality is necessary to sustain import business and assure our country’s quality control rules.

Finance

Arrange finance for the purchase and its Import clearance including Customs duty and GST and other related charges

Labeling, Packaging, Packing, and Marking

Give proper instruction through Purchase order and assure goods should be packaged, labeled strictly as per the importing country’s rules and statutory requirements.

Similarly, good packing helps easy handling, maximum loading, reducing shipping costs, and to ensuring safety and standard of the cargo.  Marking such as an address, package number, port of loading and port of destination, weight, size, handling instructions, etc. provides easy logistics.

Insurance

The marine insurance policy covers risks of loss or damage to the goods during the in transit. Generally, other than the CIF contract, the importer’s responsibility is to arrange the insurance policy.

Delivery

It is important to properly plan for fast, safe, cost-effective delivery at the right place.

Shipment

Air, Sea, Courier, Postal, etc.

Customs Procedures

Invoice

Packing List

Certificate of Origin

Bill of Lading/Airway Bill

Bill of Entry

In the Non-EDI ports, manually or EDI ports through online submission of the Bill of Entry is required to Import goods.

Bill of Entry is in different forms for Home consumption, Bonded, Ex-bond, etc.

Under EDI System, declarations in the prescribed format are to be filed. A checklist is generated for verification of data by the importer/CHB. After verification, the data is submitted to the System generates a Bill of Entry Number importer/CHB. In most of cases, a Bill of Entry is processed by the system on the basis of declarations made by the importers without any human intervention.

After completing Customs formalities and remitting Customs duty Officer of Import Dock grant OOC (Out of Charge).

Any correction/amendments in the check list generated after the filing of the declaration can be possible. In situations, where corrections are required to be made after the generation of the Bill of Entry number, amendments are carried out in the following manners.

Where the printout of the Bill of Entry has already been generated, the exporter may first surrender all copies of the shipping bill to the Dock Appraiser for cancellation before the amendment is approved by the system.

Customs Broker

Importers may avail of services of Customs Broker licensed by the Commissioner of Customs.  They are professionals and facilitate work connected with the clearance of cargo from Customs.

After OOC of the cargo prepare an e-way bill at GST portal and move the cargo from dock to importers premises.

Post-clearance

• Letter of Credit (if a shipment is under L/C)
• Invoice copy
• Packing List copy
• Bill of Lading/ Airway Bill copy
• Declaration under Foreign Exchange
• Certificate of Origin/GSP copy
• Copy of Inspection Certificate, wherever necessary
• Any other document as required in the L/C or by the buyer or statutorily

Submit documents to Bank

After clearance, it is obligatory to present the documents to the Bank.

Documents should be drawn under L/C as the case may be, along with the following documents

• Bill of Entry copy
• Bill of Exchange
• Letter of Credit (if a shipment is under L/C)
• Invoice copy
• Packing List copy
• Bill of Lading/ Airway Bill copy
• Declaration under Foreign Exchange
• Certificate of Origin/GSP copy
• Copy of Inspection Certificate, wherever necessary
• Any other document as required in the L/C or by the buyer or statutorily

Negotiation/Remittance of Import Proceeds

Submit the evidence of import with AD bank against your foreign remittance

Import Obligation

Importers can submit documents to the concerned authorities like GST, DGFT, Customs, etc.