Unit 5: Customs Procedures and Digital Trade Platforms

Overview of Indian Customs Act

The Indian Customs Act, 1962 is a law that regulates the import and export of goods into and from India. Its main goal is to:

• Collect customs duties (taxes on imported/exported goods).
• Prevent illegal trade or smuggling.
• Ensure compliance with trade regulations.

Key Points in Simple Terms

1. Import Duty & Export Duty – Taxes applied on goods coming into or going out of India.
2. Valuation of Goods – Customs determines the value of goods to calculate tax.
3. Prohibited & Restricted Goods – Certain goods are banned (e.g., narcotics) or need special permission (e.g., weapons, chemicals).
4. Customs Authorities Powers – Customs officials can inspect, seize, or detain goods if rules are violated.

Example: If a company imports electronic goods worth ₹10 lakh, customs duty will be applied based on the category of electronics. If the goods are smuggled, the Act empowers officials to seize them and penalize the importer.

Customs Clearance Process for Exports and Imports

Customs clearance is like airport security for goods—all goods must be checked and approved before leaving or entering India.

A. Import Process (Goods Coming to India)

1. Arrival of Goods – The goods reach port/airport.
2. Filing Bill of Entry – Importer submits details of goods, invoices, shipping documents to customs.
3. Assessment & Duty Payment – Customs calculates duty and taxes.
4. Inspection & Examination – Officials may inspect the goods to ensure legality.
5. Release of Goods – Once duties are paid and documents are in order, goods are cleared.

B. Export Process (Goods Leaving India)

1. Filing Shipping Bill – Exporter submits goods details, invoices, and export documents.
2. Customs Assessment – Customs verifies and approves the shipping bill.
3. Inspection – Officials check goods if required.
4. Clearance & Shipment – Goods are cleared for export.

Example: A textile exporter sending garments to the USA files a shipping bill online. Customs checks the documents and releases the goods after verification.

Role of Customs House Agent (CHA)

A Customs House Agent is a licensed professional who helps importers and exporters clear their goods with customs.

Key Roles in Simple Terms

1. Document Filing – Filing Bills of Entry (imports) and Shipping Bills (exports).
2. Duty Payment Assistance – Helping pay duties and taxes correctly.
3. Liaison with Customs – Representing clients in front of customs officials.
4. Cargo Handling – Coordinating inspection and release of goods.

Why important?
Many businesses don’t have in-house knowledge of customs rules. CHAs make the process smooth and legally compliant.

Example: A small electronics company hires a CHA to file import documents and pay duties when importing laptops from China.

Indian Customs Electronic Gateway (ICEGATE) Registration

ICEGATE is the online platform of Indian Customs for electronic filing of import/export documents. It reduces paperwork and makes clearance faster.

Benefits:

1. File shipping bills and bills of entry online.
2. Track status of consignments in real-time.
3. Make payments of customs duties digitally.
4. Download electronic certificates like e-BRC and FIRC.

Registration Process for Businesses or CHAs:

1. Visit ICEGATE website.
2. Create an account using PAN and Importer Exporter Code (IEC).
3. Receive login credentials.
4. Start filing shipping bills, bills of entry, and other documents online.

Example: An exporter registers on ICEGATE, files a shipping bill online, and customs approves it without physically visiting the port.

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Summary Table 

Topic	Key Points	Simple Example
Indian Customs Act	Regulates import/export, collects duties, prevents illegal trade	Electronics import taxed per law
Customs Clearance	Import & export process – document filing, duty payment, inspection, release	Export garments to USA via shipping bill
CHA	Licensed agent helping with customs procedures	Small company hires CHA to import laptops
ICEGATE	Online customs portal for filing & tracking	Exporter files shipping bill online, avoids physical visit

Uploading Documents Online

India has digitalized a lot of customs and export-import processes to make trade faster and paperless. Key documents that can be uploaded online include:

A. Shipping Bill

• What it is: A legal document filed by the exporter containing details of goods, their value, destination, and duty exemptions (if any).
• Purpose: Customs checks this before clearing goods for export.
• Online Filing: Through ICEGATE, exporters can submit shipping bills electronically.

Example: A textile company exporting sarees to the USA files a shipping bill online on ICEGATE; customs approves it digitally, reducing time at the port.

B. Electronic Certificate of Origin (e-CoO)

• What it is: Certificate proving where the goods were manufactured.
• Purpose: Helps the importer get duty benefits under Free Trade Agreements (FTAs).
• Online Filing: Issued and uploaded electronically via ICEGATE or the DGFT portal.

Example: An Indian tea exporter can issue an e-CoO showing the tea is produced in Assam, so the buyer in Europe can claim reduced import duties.

C. Electronic Bank Realization Certificate (e-BRC)

• What it is: Proof that the exporter has received payment for exported goods in foreign currency.
• Purpose: Required for foreign exchange compliance with the Reserve Bank of India (RBI).
• Online Filing: Banks generate and upload e-BRCs automatically when payment is received.

Example: An exporter receives $10,000 from a buyer in the UK. The bank issues an e-BRC proving the amount was credited in India.

Indian Single Window System

A digital platform for exporters and importers to interact with multiple government agencies at one place.

Purpose: Avoids visiting multiple offices; simplifies approvals and clearances.

Functions

1. Submit export/import applications.
2. Track approvals from DGFT, customs, port authorities, and other regulatory bodies.
3. File and retrieve electronic documents like shipping bills, CoO, and licenses.

Example: Instead of separately visiting customs, DGFT, and quality inspection offices, a food exporter can complete all approvals via the Indian Single Window System.

Trade Analytics and Compliance Monitoring Tools

These are digital tools used by the government and businesses to track trade patterns, ensure compliance, and make decisions.

Key Points in Simple Terms

1- Trade Analytics Tools

• Track import/export trends, top trading partners, and product categories.
• Help businesses identify opportunities in global markets.
• Example: ICEGATE reports can show which country imports maximum Indian spices.

2- Compliance Monitoring Tools

• Ensure exporters/importers follow customs rules, GST, and foreign exchange regulations.
• Detect violations like under-invoicing, mis-declaration of goods, or prohibited items.
• Example: Customs systems flag shipments of restricted chemicals to prevent illegal trade.

Benefit for Businesses

• Reduce legal risks, penalties, and delays in shipping.
• Make informed business and export strategy decisions.

Summary Table 

Topic	Key Points	Simple Example
Uploading Documents Online	Shipping Bill, e-CoO, e-BRC; reduces paperwork & speeds up customs	Export sarees → file shipping bill online; e-CoO shows origin; e-BRC proves payment received
Indian Single Window System	One-stop digital portal for approvals from customs, DGFT, and regulators	Food exporter completes all approvals digitally instead of visiting multiple offices
Trade Analytics & Compliance Tools	Track trade trends, ensure rules compliance, detect violations	Analytics show top spice-importing countries; compliance tool flags prohibited chemicals