Step by Step Procedure of Import Procedures and Documentations
A very important role is played by the Import and Customs authorities in all countries of the world when it comes to the entry of goods into the country. The era of globalization ushered in more and more interactions between different countries of the world, leading to an increase in the masses of imports and exports. In order to effectively manage all this, having a trained body of officials and rules is very important.
Import procedures and documentation are required for any good that crosses the international borders and enters the country. This can range from mere gifts to big shipments.
Steps for the Process of Import Procedure
The following steps can adequately explain the process of import procedure and documentation:
First and foremost, before anything can enter the country, a comprehensive list of what item is being imported and for what purpose needs to be updated and registered. Data like this can be obtained from trade associations and trade organisations.
The EXIM Policy is then consulted by the Importer to make sure that all rules and regulations are followed and standards are met.
Then the request of the instalment of foreign cash takes place which includes the trading of Indian Currency into foreign notes. In this matter, The Exchange Control Department of the Reserve Bank of India (RBI) manages foreign trade exchange in India.
The importer then puts in an import request with the exporter for the supply of merchandise.
Once the payments are settled between the importer and the seller, a letter of credit is issued to the importer.
The importer arranges for the payment of the advance money on arrival of the goods at the port. This saves the importer from the high penalties.
The overseas supplier after in-loading the merchandise on the ship dispatches the “Shipment Advice” to the importer to give information with respect to the shipment of goods.
Dock charges are also paid out by the importer once the goods are received and all inspections are completed.
In India, the procedure of imports usually follows this outline, unless the goods are otherwise specified as hazardous or are specially requested by the government of the country. A number of documents are required to make sure that this process takes place seamlessly, which is important for the importer to have quick access to.
These Documentations Include
All invoices, packing lists, certificates specifying the origins of the product and its description, GATT declaration, IET documents and any other document that the government specifies.
Catalogue, Technical Write ups – required for import of machinery and equipment.
Chemical Composition, Test bond required by the respective customs – all are needed in case of Chemical Import.
Phytosanitary Certificate with Fumigation, Certificate of Origin – required for un-processed food, plant products, wood imprints, fruits and seeds import.
Test Report and Composition – for processed food product import.
Azo Dye Inspection Certificate – in Import of Fabric.
PLAT T essential for valuation – In case of import of Plastic Granules.
Registered EPCG License, Panelised Undertaking by Importer, Bond com BG Bank Covering Letter, Signature Attestation from Bank, Copy of Board of Regulation, Particles of Memorandum, and Detail of Previous License – Import under EPCG license.
Form necessary from Supplier for customs duty advantage – Import of Ceramic Tiles.
Test Certificate – Import of Wine and Whiskey.
Explain Import Procedure
Import procedure means all the steps involved in purchase of goods from any foreign country. The procedural steps involved in import trade differ from country to country in respect of their import policy, statutory requirements. In majority of the countries import trade is being controlled by the government. The objective of empowering the government in the import trade is to keep a strict restriction policy in regards of foreign exchange, protection of Indigenous industries etc. For importing goods, a specified and regulated procedure is to be followed. The procedure is summed into quick steps as below:
Trade Enquiry
Procurement of Import License and Quota
Obtaining Foreign Exchange
Placing the Order
Dispatching a letter of Credit
Obtaining Necessary Documents
Customs Formalities and Clearing of Goods
Making the Payment
Closing the transactions
FAQs on Import Procedures and Documentation Explained
1. What is the import procedure as per the CBSE syllabus?
The import procedure refers to the systematic, step-by-step process that a business or individual must follow to bring goods into India from a foreign country. This includes a series of activities from making a trade enquiry to getting the goods cleared by customs. It ensures that all imports are legal, properly taxed, and comply with national trade policies.
2. What are the main steps involved in importing goods into India?
The primary steps in the import procedure for the 2025-26 session are:
- Trade Enquiry: The importer requests information on price and terms from potential overseas suppliers.
- Procurement of Import Licence: The importer checks the EXIM policy to see if a licence is needed for the goods.
- Obtaining Foreign Exchange: The importer applies to a bank authorised by the RBI to get the required foreign currency.
- Placing an Order (Indent): The importer places a formal order with the exporter, detailing the goods, price, and shipping.
- Obtaining a Letter of Credit: The importer's bank provides a letter of credit, guaranteeing payment to the exporter upon shipment.
- Customs Formalities and Clearance: After the goods arrive, the importer files a Bill of Entry and completes customs inspection and pays import duty to clear the goods.
3. What is the importance of an Importer-Exporter Code (IEC)?
An Importer-Exporter Code (IEC) is a unique 10-digit code issued by the Directorate General of Foreign Trade (DGFT). It is mandatory for any business or individual undertaking import or export activities in India. Its importance lies in enabling the government to track foreign trade transactions and ensuring that the business is registered and compliant with trade regulations.
4. What is the difference between a Bill of Lading and a Bill of Entry?
A Bill of Lading and a Bill of Entry are two distinct documents used at different stages of the import process.
- A Bill of Lading is issued by the shipping company to the exporter when the goods are loaded onto the ship. It acts as proof of shipment and a title document for the goods. The importer needs this to claim the goods.
- A Bill of Entry is a legal document filed by the importer with the customs authorities when the goods arrive. It contains details of the goods, their value, and origin, and is used for assessing customs duty.
5. Why is a Letter of Credit (L/C) a crucial document in international trade?
A Letter of Credit is a guarantee from the importer's bank that the exporter will receive payment once the terms of the agreement are met, such as shipping the goods. It is crucial because it minimises risk for both parties. The exporter is assured of payment, and the importer is assured that payment will only be made after the goods are shipped as per the contract. This builds trust in transactions between parties in different countries who may not know each other.
6. What are some of the key documents required for customs clearance of imported goods?
For customs clearance, an importer generally needs to present several key documents, including:
- Bill of Entry: For customs assessment.
- Commercial Invoice: Stating the price and details of the goods.
- Bill of Lading or Airway Bill: As proof of title to the goods.
- Packing List: Detailing the contents of each package.
- Certificate of Origin: To verify the country where the goods were made.
- Import Licence: If required for the specific goods being imported.
7. What is the role of 'Shipment Advice' in the import process?
Shipment Advice is a document sent by the exporter to the importer as soon as the goods have been dispatched. Its primary role is to inform the importer about the shipment details, such as the invoice number, date of shipment, vessel name, and a description of the goods. This information is vital for the importer to make necessary arrangements for customs clearance and payment, ensuring they can receive the goods without delay upon arrival at the port.
8. Beyond legal penalties, what are the business risks of failing to follow the correct import documentation and procedures?
Failing to follow proper import procedures can lead to significant business risks beyond just fines. These include:
- Delayed Shipments: Incorrect paperwork can cause goods to be held up at customs for weeks, disrupting supply chains and production schedules.
- Unexpected Costs: Delays often result in high demurrage charges (port storage fees) that can erase profit margins.
- Loss of Goods: In severe cases of non-compliance, customs authorities may seize and confiscate the goods permanently.
- Damaged Reputation: A history of compliance issues can damage a company's reputation with suppliers, banks, and government authorities.
