Global trade is definitely a difficult art to master. Whether it be using the right terms or choosing the right freight mode, whether it be preparing the required documents or analyzing the PnL, international trade demands a good grasp. It requires deeper market understanding, proper research, and informed decision-making to be able to reap profits exponentially. But many a time, even after all this; things get stuck at a point. From improper packaging to invalid declarations, from wordplay to rule play, anything and everything could be the reason for it. But at which point? Yes, you guess it right. It is at the customs
The Customs Department
For those who are not aware of customs, it is a governmental department take looks into the proper implementation of the policies laid down, collection of customs duties and associated taxes, and helps facilitate the inter-country movement of goods and cargoes. They act as the essential gate to be crossed for good to enter or leave a country, and in case of ambiguity can make arrests, confiscate goods or take other necessary actions as could be done by those in the police department. And hence, getting stuck at customs can sometimes be a hard nut to crack. So, what could be done to ensure a hassle-free custom clearance? The answer to this is Custom Brokers.
The Custom Brokers
In layman’s terms, Custom Brokers are the middlemen liaising with the government and the clients. They are people holding thorough knowledge about the entire process and specialize in custom clearance tasks. They play a pivotal role in coordinating with multiple departments to ensure the seamless export-import of goods from and to a country, ensuring mitigating dry losses and ensuring profits. Their work includes classifying goods correctly, checking the clearance documentation, and ensuring the absence of errors, thus saving time, money, and effort.
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Steps involved in Custom Clearance
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01
Calling of Vessels
It basically refers to the arrival confirmation procedure that is mandatory to be done by the person carrying the vessel having the goods.
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02
Filing Import General Manifest (IGM)
It is a document entailing the details of the goods carried in the vessel, by the person in charge of or carrying the vessel.
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03
Verification Operations
It refers to document verification and assigning of IGM numbers (post successful verification), only after which the vessel can land and the cargo can be unloaded
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04
Custody of Custodian
A custodian is the Principal Commissioner or Commissioner of Customs, assigned by the government, under whose custody the goods remain until custom clearance takes place.
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05
Filing Bill of Entry
The importer of the goods should file a bill of entry (customs copy) electronically for the clearance of the goods, before or on the arrival of the goods. In the bill of entry, the duty and taxes to be paid are assessed by the importer himself and this is called self-assessment. The importer will self-assess the duty after considering the applicable rate of exchange and the rate of import duty. Upon approval of the Bill of Entry, the importer has to pay the GST and duty which will be entered into the Indian Customs Electronic Data Interchange System (ICEDIS). Once it is entered in ICEDIS, a bill of entry number will be generated. The importer should then submit the bill of entry (customs copy), the duty-paid challan, and other supporting documents to the port authorities for making an order permitting clearance. After making an order permitting clearance, the port officer would generate a duplicate bill of entry (importer’s copy) and a triplicate bill of entry (exchange control copy). Both copies will be handed over to the authorized person later.
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06
Delivery of Goods
Once all these operations are done, the importer can take the delivery of goods. However, in case the goods are warehoused, he/she has to issue an ex-bond bill of entry to clear the whole or part of the cargo at the warehouse.
Role of Custom Broker
The process mentioned above looks cumbersome, isn’t it? That’s exactly where a customs broker can pitch in to help. Owing to their expertise, they can help in a variety of ways to ensure smooth customs clearance.
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01
Gray Areas
There could be some unintentional errors in the documentation that might lead to the cargo being withheld by customs. These may include tariff classification, customs valuation, appeals and dispute settlements, refunds, drawbacks, remission of duties, sales and excise tax implications, etc... A custom broker can immediately step up to review the operations and coordinate to mitigate the same.
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02
Cost Cutting
Whether it be cargo insurance or buying and selling of freight rates, the customs broker makes sure to seal the deal at the minimum price, to reap mutual benefits.
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03
Reducing the Burden
Besides the cases of immediate call to action, the customs brokers can also help coordinate with different stakeholders for making delivery arrangements, maintaining custom accounting documents, making record entries, and paying the necessary duties on time.