SYLLABUS

Class – B.Com VI Sem. (Tax)

Subject – Custom Duty & M.P. Stamp Duty
UNIT – I Introduction of custom duty-features objects and types. Important Definitions
customs law and Rules. Restrictions on import-export.

UNIT – II Determination of Assessable value for customs. Practical problems relating to

computation of Assessable value. Calculation of payable customs duty.

UNIT – III Procedure for import and export and clearance. Prohibited goods, notified goods,
specified goods. Restricted imports. Provisions relating to Baggage. Export promotion
schemes. Function and powers or customs officers.

UNIT – IV Types of assets – Agricultural land, non-agricultural land; Residential, commercial and
industrial land; House, flat and office; Meaning of ‘Prakosth’ and its registration,
measurement of properties.
UNIT – V Registration of properties, procedure of registration; Registration Authorities stamp
duty on registration; Name transfer after registration, proforma of agreement for
purchase-sale of property. Proforma of registry of property. Guide line-meaning,
importance, procedure of determination of guideline, uses guideline.
Class – B.Com VI Sem (Tax) subject – Custom Duty & M.P. Stamp Duty (Optional)
Unit – 1
Meaning of Customs Duty
The term Customs has derived its essence from the Custom, which means a customary practice or a
course of action that is observes and repeated in the like circumstances. Customs Duty has been in
vogue from ancient times.

As per ancient custom, a merchant entering a kingdom with his goods had to make a suitable gift to the
king. In the course of time, this customs was formalized into Customs Duty. This is collected on imports
and occasionally on exports too. The word Customary is derived from customs, which indicates that it is
a very old tax. Taxes on goods were levied on various goods right from the Veda period. Customs duty
as we understand today has its origin in British period.

In the present time customs duty means a tax which is levied by the Government on import of goods
into India and export out of India. It is a central tax and mainly imposed on imported goods. Generally
govt. levies export duty on a very few items due to export promotion.

Basis of determining the duty

Import Duty and Export may be determined on the following two bases;
1. Ad Valorem Duty
When the duty is determined on the basis of the value of the goods it is referred to as ‘Ad
Valorem Duty’
2. Specific Duty
When the duty is determined on the basis of the measurement of goods, it is called Specific Duty.

Main features of customs Duty

Customs duty is tax on import or export of goods. It is levied by central Govt. of India. It is collected and
used by the centre. The main features of this tax are as under –
1. Customs Duty levied on Import and Export
Customs Duty is an indirect tax levied by Central Government on import and export of goods. Customs
Duty is applicable in foreign trade. It is an important source of revenue and instrument for regulating
import and export of the country.
Customs duty is levied on the following two types of transactions –
a. Goods imported from outside India, i.e. Duty on Import
b. Goods exported to another countries i.e./ export duty.
2. Levying of customs duty
Customs duty levied upon import and export, there for it may be –
a. Import Duty – When a person imports some goods from outside India, is called import and tax
or duty payable on such goods called Import Duty.
b. Export Duty – When a person exports some goods from India to other countries, is caked export
and duty payable on such goods called Export Duty.
3. Indirect Tax
It is an indirect tax. It imposed by the central govt. on import in India or export of goods from India.
Duty imposed on import called Import duty and on export called Export Duty. However Import Duty is
more than Export Duty.
4. Goods under Customs Act
Customs duty is on goods as per section 12 of Customs Act. Section 2(22), gives inclusive definition of
goods includes (a) vessels, aircrafts and vehicles (b) stores (c) baggage (d) currency and negotiable
instruments and (e) any other type of movable property.
5. Objects of Customs Duty
The customs duty is levied, primarily, for the purpose of raising revenue. However, it serves as an
important tool in regulating imports of foreign goods into India with the view to conserve foreign
exchange, regulate supply of goods into domestic market and provide protection to the domestic
industry from foreign competition by restricting import to selected goods and services. The duty on
export is also levied for the purpose of regulating exports in the like manner.
6. Important source of Revenue
Customs duty started with 5%. After independence, need arose to reduce imports as foreign exchange
became scarce and to protect Indian industry from foreign competition. Customs duty rates were
increased. Auxiliary duty and countervailing duty was introduced.
7. Rate of Customs Duty
In India, customs duty has been widely used for not only increasing the government Revenue, but for
providing protections to the domestic industry. Though the customs duty started with 5%, but at one
point of time, the total burden of duty was as high as 100% and in some cases even more than 200% or
300%
Customs Duty has second rank first Central Excise Duty among indirect taxes levied by Central
Government. It is an indirect tax and levied by govt. of India on import and export of goods.

Taxable Event
In case of Importation
Import of goods will commerce when they cross the territorial waters of India but is completed when it
becomes part of the mass of the goods within the country. Taxable event is reached when the goods
reach the customs barrier and the bill of entry for home consumption is filed.
In case of Exportation
Exportation commences when the shipping bill in respect of such goods is filed but the taxable event is
completed when the goods cross the territorial waters of India.

Types of Customs Duties

Following custom duties are levied in India:
1. Basic Customs Duty
Basic Customs duty is levied on the value of the goods. Value of the goods is fixed in accordance
with the provisions of Sec. 14 of the Act.
Duty is levied at different rates on different goods. According to Finance Act, 2007 the peak rate
of duty on non-agricultural product has been reduced from 12.5% to 10% with a few
exceptions, which is maintained by finance Act, 2011.
2. Additional Custom Duty (ACD)
If an article which is produced in India is imported then an additional customs duty will be
levied on it. This duty will be equal to the excise duty leviable on that article in India. Where a
like article is not manufactured in India, the duty would be liviable on the class of articles to
which the imported article belongs. Where such duty is leivable at different rates, the highest
duty shall be levied.
3. Countervailing Duty (CVD)
This levy has use when goods manufactured indigenously are exempt from excise duty. In such
case, the indigenous manufacturer will be loser to the extent of duty paid on inputs. This duty
paid on his inputs is lost as final product is exempt from duty. This becomes additional cost to
indigenous manufacturer. On the other hand, the imported goods do not have to pay CVD as the
product is exempt from duty. The foreign supplier has not paid any excise duty on his inputs. He
gets cost advantage to that extent. Section 3(3) is intended to offset such cost advantage to
foreign supplier.
4. Special Additional Duty (SDA)
Keeping in mind the maximum sales tax, VAT, local tax or any other charge leviable on a like
article on its sale or purchase in India, the Central Government levy special additional duty on
the imported article.
Purpose of the Additional Duty is to counter-balance sales tax, VAT, local tax or other charges
leviable on articles on its sale, purchase or transaction in India. Explanation to section 3(5)
makes it clear that even if imported article was not sold in India, tax will be leviable on the basis
 of sales tax, VAT or other tax that would have been payable if the goods were sold, purchased or
transported in India.
5. Education Cess
Finance Act, 2004 has imposed an education cess on items imported into India @2% and 1%
Higher Education cess is imposed b6y Finance Act, 2007, to make it a total of 3% on the
aggregate of duties of customs.
6. Safeguard Duty
If the Central government is satisfied that an article is imposed into India in such increased
quantity that it will cause serious injury to domestic industry then it may impose a safeguard
duty on that article by a notification.
7. Product Specific Safeguard Duty on Imports from China
If the Central government is satisfied that an article is imposed into India from China in such
increased quantity that it will cause serious injury to domestic industry then it may impose a
safeguard duty on that article by a notification.
8. Countervailing duty on Subsidized Articles
Where any country pays, directly or indirectly, any subsidy on the exportation of any article
then on the importation of that article in India the Central Government may impose
countervailing duty not exceeding the amount of such subsidy.
9. Anti-dumping Duty on Dumped Articles
Where any article is exported from any country into India at less than its normal value, then,
upon the importation of such article in India, the Central Government may impose an
antidumping duty not exceeding the margin of dumping in relation to such article.
This duty shall be in addition to other custom duties.
10. Re-Importation Duty
If the goods are imported into India after exportation there from, such goods hall be liable to
duty and be subject to all the conditions and restrictions which are imposed on the actual
imports.
11. Additional Duty on Tea and Tea Waste
In the case of tea waste imported into India, there shall be levied and collected, by surcharge, an
additional duty of customs @Rs. 1 per kg. However, green tea has been exempted from this
additional duty of customs.
12. National Calamity Contingent Duty of Customs
On the following goods this duty is levied:
1. Pan Masala – Not containing tobacco 23%
2. Pan Masala – Containing tobacco 10%
3. Chewing tobacco, snuff tobacco and similar tobacco products 10%
4. Cigarettes Rs. 20 to Rs. 235
per thousand
5. Bidis Rs. 1 to Rs. 2
per thousand
6. Crude petroleum oils Rs.50 per ton
7. Polyester Yarn (withdrawn by Finance Act, 2008)
8. Motor cars and two-wheelers 1%

Important Definitions
“Adjudicating authority” means may authority competent to pass any order or decision under this Act,
but does not include the Board, Commissioner (Appeals) or Appellate Tribunal. (Sec. 2(1))
“Baggage” includes unaccompanied baggage but does not include motor vehicles; (Sec 2(3))
“Coastal Goods” means goods other than imported goods, transported in a vessel from one port in India
to another. (Sec 2(7))
“Conveyance” includes a vessel and aircraft and a vehicle. (Sec.2 (9))
“Customs area” means the area of a customs satiation and includes any area in which imported goods or
exported goods are ordinarily kept before clearance by customs Authorities. (Sec.2(11))
“Customs stations” means nay customs port, airport or land customs stations. (Sec. 2(13))
“Dutiable Goods” Any goods which are chargeable to duty and on which duty has not been paid.
“Entry” in relation to goods means an entry made in a bill of entry, shipping bill or bill of export and
includes in the case of goods imported or to be exported by post, the entry referred to in section 82 or
the entry made under the regulations made under section 84 (Sec. 2(16))
“Export” means taking out of India to a place outside India.
“Export goods” means any goods which are to be taken out of India to a place outside India. (Sec. 2(19))
“Exporter” in relation to any goods at any time between their entry for export and the time when they
are exported, includes any owner or any person holding himself out to be the exporter. (Sec.2(20))s
“Foreign gong vessel or aircraft” means any vessel or aircraft for the time being engaged in the carriage
of goods or passengers between any port or airport in India or not, and includes:
1. Any naval of a foreign Government taking part in any naval exercises;
2. Any vessel engaged in fishing or any other operations outside the territorial waters of India;
3. Any vessel or aircraft processing to a place outside India for any purpose whatsoever. (Sec.
2(21))
“Import” means bringing into India from a place outside India. (Sec. 2(23))
Import Manifest” or Import Report required to be delivered under section 30. (Sec. 2(24))
“Imported Goods” means any goods brought into India from a place outside India but does not include
goods which have been cleared for home consumption (Sec. 2(25))
“Importer” in relation to nay goods at any time between their importation and the time when they are
cleared for home consumption, includes any owner or any person holding himself out to be the
importer. (Sec. 2(26))
“Indian customs waters” means the waters extending to the sea up to the limit of contagious zone of
India under section 5 of the Territorial Waters, Continental shelf, Exclusive Economic Zone and other
Maritime zones Act, 1976 and includes any bay, gulf, harbor, creek or tidal river. (Sec. 2(28))
“Prohibited goods” means any goods the import or export of which is subject to any prohibition under
this Act or any other law for the time being in force but does not include any such goods in respect of
which the conditions subject to which the goods are permitted to be imported or exported have been
complied with. (Sec. 2(33))
“Shipping Bill” means a shipping bill referred to in Section 50 (Sec. 2(37))

Restrictions of Import & Export

Through collecting revenue for central government by way of customs duty is, of course a major
purpose of Customs Act, yet, another major purpose is to prohibit or restrict illegal imports and exports.
Section 11 of the Customs Act, 1962, empowers Central Government to prohibit the import or export of
goods of any specified description. Such prohibition may be absolute or conditional. Such prohibition
can be made by issuing a notification.
Purpose for which import/export can be prohibited: The purpose for which imports/ exports can be
prohibited are given in section 11(2) as follows:
1. Maintenance of the security of India.
2. Maintenance of public order and standards of decency of mortality
3. Prevention of smuggling
4. Prevention of shortage of goods of any description
5. Conservation of foreign exchange and the safeguard of balance of payments
6. Prevention of injury to the economy of the country by the uncontrolled import or export of gold
or silver.
7. Prevention so surplus of any agricultural product or the product of fisheries.
8. Maintenance of standards for the classification, grading or marketing of goods in international
trade.
9. Establishment of any industry.
10. Prevention of serious injury to domestic production of goods of any description
11. Protection of human, animal or plant life or health.
12. Protection of national treasures or artistic, historic or archeological value
13. Conservation of exhaustible natural resources
14. Protection of patents, trademarks and copyrights
15. Prevention of deceptive practices.
16. Carrying on of foreign trade in any goods by the State, or by a Corporation owned or controlled
by the State to the exclusion, complete or partial, of citizens of India.
17. Fulfillment of obligations under the Charter of the United Nations for the maintenance of
International peace and security.
18. Implementation of any treaty, agreement or convention with any country.
19. Compliance of imported goods with laws which are applicable to similar goods produced or
manufactures in India.
20. Prevention of dissemination of documents containing any matter which is likely to prejudicially
affect friendly relations with any foreign state is derogatory to national prestige.
21. Prevention of the contravention of any law for the time being in force and
22. Nay other purpose conductive to the interests of the general public.
 UNIT II
ASSESSABLE VALUE AND CALCULATION OF CUSTOMS DUTY
Procedure for computation of Customs Duty on Imports
Customs duty is payable on goods imported from outside India. Calculating the amount of duty the
procedure can be divided in two steps-
a. Determination of Assessable value
b. Calculation of Customs Duty Payable
The procedure discussed below –

ASSESSABLE VALUE
Base of Assessable Value is 'Transaction Value' of imported or exported goods. Transaction value as the
price actually paid or payable for the goods when sold or export to India, adjusted in accordance with
Rule 9. As per rule 9 of the Valuation Rules, the price of the imported goods is to be increased by-
a. Specified costs and services such as commission, brokerage, cost of containers and packing.
b. Proportionate value of goods and services supplied by the buyer, free of charge or at
concessional rates for use in production/sale for export of the imported goods like tools,
materials, etc.
c. Royalties and licence fees related to the imported goods required to be paid by the buyer.
d. The value of any part of the proceeds of any subsequent resale, disposal, etc.
e. All other payments made or to be made by the buyer as a condition of sale of the imported
goods.

Transaction Value
Some costs, services and expenses are to be added to the price paid or payable, these are not already
included in the invoice price. These are discussed below-
1. Commission and Brokerage ineludible – Commission and brokerage except buying commission
is includible.
2. Packing cost is includible – Cost of containers which are treated as being part of goods for
customs purposes. Similarly, cost of packing-both labour and material is to be included.
3. Value of Goods supplied by buyer to be added – If buyer has supplied goods tree of cost or at
reduced cost in connection with production or export of goods, these should be included.
4. Services/documents/technical know-how supplied by Buyer to be added – Cost of engineering,
development, art work, design work and plans and sketches undertaken by buyer which is
necessary for production of imported goods is includible, only if work is undertaken outside
India:
5. Royalties and licence free – If buyer has paid royalties and licence fees separately in relation to
imported goods, these are includible, unless these are already included in selling price. Royalty
may include payments in respect of patents, trademarks or copyrights.
6. Other payments made to seller to be added – If buyer has made, directly or indirectly, any
payment to seller as a condition of sale, such payments should be included for obvious reason
that ordinary selling price has been reduced due to such payment
7. Cost of Transport upto port should be added – Cost of transport from exporting country to India
is to be added in Assessable Value.
8. Insurance cost should be added- Insurance charges on goods are to be added. If these are not
ascertainable, these- will be calculated @ 1.25% of FOB value of goods.
9. Landing charges to be added – Cost of unloading and handling associated with delivery of
imported goods in port (called landing charges) shall be added. These will be calculated @ 1%
of CIF value, i.e. FOB price plus freight plus insurance.

Exclusions from Assessable Value

Such expenses or charges should be excluded
1. Some Specific charges – If the following charges are included in the invoice, shall be excluded
from assessable value.
 a. Charges for construction, erection, assembly, maintenance or technical assistance
undertaken after importation of plant, machinery or equipment.
b. Cost of transport after importation.
c. Duties and taxes in India
2. Payment not related to imported goods – Other payments from buyer to seller that do not relate
to imported goods are not part of the customs value.
3. Interest on Deferred Payment – Interest on deferred payment, if town separately in the Invoice
cannot be added.

CALCULATION OF CUSTOMS DUTY PAYABLE

The following are the different types of Customs (Import) Duties-
1. Basic Customs Duty (BCD) – This is the duty levied under Section 12 of the Customs Act. It is
levied as a Percentage of value as determine under Section 14(1) of the Act. Basic duties
prescribed in the Customs Tariff Act.
Formula: Basic Customs Duty

2. Additional Duty of Customs (CVD) – This duty is popularly known as countervailing duty. Under
Section 3 (1) of the Customs Act, an additional duty on goods imported into the country is
leviable.
Formula: Additional Customs Duty

3. Education cess on customs duty – An education cess has been imposed on imported goods. The
Education cess will be 3% of the aggregate duty of customs. Education cess on customs duty of
‘dutycustoms' it mean it will be calculated on aggregate amount of Basic Customs Duty +
Additional Customs Duty (Counter Vailing Duty)
4. Special Additional Duty in Lieu of Sales Tax [sec. 3(5)] – A special additional duty was imposed
4% to counter balance Sales Tax etc.
a. If the goods imported the special additional duty shall be charged @ 4% on the following
aggregate amount –
i. Assessable Value (A.V.) ___________
ii. Basic customs duty +___________
iii. Additional customs duty for excise +___________
iv. Education cess on basic duty + Additional duty +___________
Aggregate amount for special Additional Duty …………………….

COMPUTATION OF ASSESSABLE VALUE AND CALCULATION OF CUSTOMS DUTY

Following procedure is adopted for determining the customs duty on the imported goods:
1. Determining the Assessable Value of goods.
2. Converting the foreign exchange value of the imported goods into Indian Currency i.e., Rupees.
3. Computing the Customs Duty.

COMPUTATION OF ASSESSABLE VALUE OF GOODS

1. Purchase Price of Goods xxxx
2. Commission and Brokerage (except buying Commission) xx
3. Cost of Packing xx
4. Material and Services provided by the Importer xx
5. Royalty and Licence Fee xx (+)xxx
FOB Value of Goods Tag Total
6. Transportation Cost (upto 20% of F.O.B. Value) xx
7. Insurance Premium (upto 1.125% of F.O.B. Value) xx (+)xxx
CIF Value of Goods Total
a. Loading, Unloading and Handling charges at 1% of
the CIF Value xx (+) xx
Assessable Value of Goods in Foreign Currency G. Total
x Rate of Exchange x Rate of
exchange
Assessable Value of Goods in Indian Currency As ascertained

CAULATION OF CUSTOMS DUTY

Amt. of duty
1. BASIC CUS OMS DUTY
a. Assessable Value of Goods x x x (a)
b. Rates of duty say 10% u/s 3(1) of C. T. A. x (b) XXXX
2. ADDITIONAL CUSTOMS DUTY:
Assessable Value x x x (a)
Add : Basic Custom Duty x x (b)
Value of Add. Custom (a +b) Total (c)
x Rate of A.C.D. including Education Cess (c x Rate) XXX(d)
Add : Education Cess 3% on Total of
Basic Customs Duty and
Additional Customs Duty xx
Total
 UNIT-III
Procedures for Imports and Exports

General Provisions about Customs Procedures

Basic document is Entry’ in relation to goods means entry made in Bill of Entry, Shipping Bill or
‘Entry’ Bill of Export. In case of import by post, label or declaration accompanying
goods is ‘entry’
Loading and unloading Imported goods can be unloaded only at specified places. Goods can be
at specified places only exported only from specified places.
Computerization of Customs procedures are largely computerized. Most of documents have to be
customs procedures e-filed.
Amendment to Documents submitted to customs can be amended with permission In case of
documents bill of entry, shipping bill or bill of export; it can be amended after clearance
only on the basis of documentary evidence which was in existence at the time
the goods were cleared, warehoused or exported, and not on basis of any
subsequent document. [Proviso to section 149].
ICD and CFS Imported and export goods are usually handled in containers. These can be
stored in Inland Container Depot (ICD) or Container Freight Station (CFS).
They function like dry port for handling and temporary storage of
imported/export goods and empty containers.
Boat Notes ‘Boat Notes’ are used for transferring small cargo from ship to shore, or from
shore to ship, without berthing the ship.
Transshipment of Goods can be transshipped from one conveyance to other after following
goods required procedure. Such transshipment may be to any major port or airport
in India. The goods can be transshipped to any other customs station in India
if Customs Officer is satisfied that the goods are bona fide intended for
transshipment to any customs station. The facility is available at all customs
ports and Inland Container Depots (ICDs).
Coastal goods Procedures have been prescribed for coastal goods, even if there is neither
import nor export.

Import Procedures
e-filing of documents Goods should arrive at customs port/airport only. Most of customs
procedures are computerized. E-filing of documents is required.
Import manifest or ‘Person in charge of conveyance’ is required to submit Import Manifest or
Import Report Import Report.
Entry Inwards Goods can be unloaded only after grant of ‘Entry Inwards’.
Risk Management Self Assessment on basis of ‘Risk Management System’ (RMS) has been
System introduced in respect of specified goods and importers.
Bill of Entry for home Importer has to submit Bill of Entry giving details of goods being imported,
consumption on along with required documents. Electronic submission of documents is done
payment of customs in major ports.
duty White Bill of Entry is for home consumption. Imported goods are cleared on
payment of customs duty.
Bill of Entry for Yellow Bill of Entry is for warehousing. It is also termed as ‘into bond Bill of
warehousing Entry’ as bond is executed. Duty is not paid and imported goods are
transferred to warehouse where these are stored. Green Bill of Entry is for
clearance from warehouse on payment of customs duty. It is for ex-bond
clearance.
Noting, examination Bill of Entry is noted, Goods are assessed to duty, examined and pre-audit is
and assessment carried out. Customs duty is paid after assessment.
Bond Bond is executed if required if assessment is provisional (PD bond) or
concessional rate of customs duty is subject to certain post import
conditions.
Out of customs charge Goods can be cleared outside port after ‘Out of Customs Charge’ order is
order issued by customs officer. After that, port dues, demurrage and other charges
are paid and goods are cleared.
Demurrage if clearance Demurrage is payable if goods are not cleared from port/airport within three
from port delayed days. Goods can be disposed of if not cleared from port within 30 days.

Export Procedures
Entry Outward Loading in conveyance can start after ‘Entry Outward’ is given by
customs officer.
Export manifest/Export Person in charge of conveyance is required to submit ‘Export Manifest’
report or ‘Export Report’.
Registration with DGFT and Exporter has to obtain IEC number from DGFT is advance. He should be
EPC registered with Export Promotion Council if he intends to claim export
benefits.
Third party exports Export can be by manufacturer himself or third party (i.e. by exporter on
behalf of another). Merchant exporter means a person engaged in
trading activity and exporting or intending to export goods [para 9.40 of
FTP]
Registration of documents Advance authorization, DEPB etc. should be registered if exports are
under Export Promotion under Export Promotion Scheme.
Scheme
Shipping Mill Export is required to submit Shipping Bill with required documents for
obtaining permission to export. There are five forms :
(a) Shipping Bill for export of goods under claim for duty drawback –
these should be in Green colour
(b) Shipping Bill for export of dutiable goods – this should be yellow
colour
(c) Shipping bill for export of duty free goods – it should be white colour
(d) shipping bill for export of duty free goods ex-bond – i.e. from bonded
store room – it should be pink colour
(e) Shipping Bill for export under DEPB scheme – Blue colour.
FEMA formalities GR/SDF/Softex form (under FEMA) is required to be submitted.
Noting, assessment, The shipping bill is noted, goods are assessed and examined. Export
examination duty is paid, if applicable.
Certification of documents If export is under export incentives, relevant documents are checked
for export incentives and certified. Then proof of export is obtained on ARE-1.
Let export order Conveyance can leave only after ‘Let Export’ order is issued.

Procedure for Clearance of Imported and Export Goods

1. Introduction:
The imported goods before clearance for home consumption or for warehousing are required to comply
with prescribed Customs clearance formalities. This includes presentation of a Bill of Entry containing
details such as description of goods, value, quantity, and exemption notification etc., Customs Tariff
Heading. This Bill of Entry is subject to verification by the proper officer of Customs (under self
assessment scheme) and may be reassessed if declarations are found to be incorrect. Normally import
declarations made are scrutinized without prior examination of goods with reference to documents
made available and other information about the value/ classification etc. It is at the time of clearance of
goods that these are examined by the Customs to confirm the nature of goods, valuation and other
aspects of the declarations. In case no discrepancies are observed at the time of examination of goods
‘Out of Charge’ order is issued and thereafter the goods can be cleared. Similarly Customs clearance
formalities for goods meant for export have to be fulfilled by presenting a Shipping Bill and other
related documents. These documents are verified for correctness of assessment and after examination
of the goods, if warranted, ‘Let Export Order’ is given on the Shipping Bill.

2. Import procedure - Bill of Entry:

1 Goods imported into the country attract Customs duty and are also required to confirm to
relevant legal requirements. Thus, unless the imported goods are not meant for Customs
clearance at the port/airport of arrival such as those intended for transit by the same
vessel/aircraft or transshipment to another Customs station or to any place outside India,
detailed Customs clearance formalities have to be followed by the importers. In contrast, in
terms of Section 52 to 56 of the Customs Act, 1962 the goods mentioned in the IGM/Import
Report for transit to any place outside India or meant for transshipment to another Customs
station in India are allowed transit without payment of duty. In case of goods meant for
transshipment to another Customs station, simple transshipment procedure has to be followed
by the carrier and the concerned agencies at the first port/airport of landing and the Customs
clearance formalities have to be complied with by the importer after arrival of the goods at the
other Customs station.
There could also be cases of transshipment of the goods after unloading to a port outside India.
Here also simple procedure for transshipment is prescribed, and no duty is required to be paid.

2 For goods which are offloaded at a port/airport for clearance the importers have the option to
clear the goods for home consumption after payment of duties leviable or to clear them for
warehousing without immediate discharge of the duties leviable in terms of the warehousing
provisions of the Customs Act, 1962. For this purpose every importer is required to file in terms
of the Section 46 ibid a Bill of Entry for home consumption or warehousing, as the case may be,
in the form prescribed by regulations.
The Bill of Entry is to be submitted in sets, different copies meant for different purposes
and also bearing different colours, and on the body of the Bill of Entry the purpose for which it
will be used is mentioned.

3 The importers have to obtain an Importer-Export Code (IEC) number from the Directorate
General of Foreign Trade prior to filing of Bill of Entry for clearance of imported goods. The
Customs EDI System receives the IEC number online from the DGFT.

4 If the goods are cleared through the EDI system, no formal Bill of Entry is filed as it is
generated in the computer system, but the importer is required to file a cargo declaration
having prescribed particulars required for processing of the Bill of Entry for Customs clearance.

5 The importer clearing the goods for domestic consumption through non-EDI ports/ airports
has to file Bill of Entry in four copies; original and duplicate are meant for Customs, third copy
for the importer and the fourth copy is meant for the bank for making remittances. Along with
the Bill of Entry the following documents are also generally required:
(a) Signed invoice
(b) Packing list
(c) Bill of Lading or Delivery Order/Airway Bill
(d) GATT valuation declaration form duly filled in
(e) Importers/CHA’s declaration
(f) Import license, wherever necessary
(g) Letter of Credit, wherever necessary
(h) Insurance document
 (i) Import license, where necessary
(j) Industrial License, if required
(k) Test report in case of items like chemicals
(l) DEEC Book/DEPB in original, where relevant
(m) Catalogue, technical write up, literature in case of machineries, spares or chemicals, as
applicable
(n) Separately split up value of spares, components, machineries
(o) Certificate of Origin, if preferential rate of duty is claimed

6 While filing the Bill of Entry, the correctness of the information given therein has also to be
certified by the importer in the form a declaration at the foot of the Bill of Entry and any mis-
declaration/incorrect declaration has legal consequences.

7 Under the EDI system, the importer does not submit documents as such but submits
declarations in electronic format containing all the relevant information to the Service Centre. A
signed paper copy of the declaration is taken by the service centre operator for non-reputability
of the declaration. A checklist is generated for verification of data by the importer/CHA. After
verification, the data is filed by the Service Centre Operator and EDI system generates a Bill of
Entry Number, which is endorsed on the printed checklist and returned to the importer/CHA.
No original documents are taken at this stage.

8 The first stage for processing a Bill of Entry is termed as the noting/registration of the Bill of
Entry vis-à-vis the IGM filed by the carrier. In the manual format, the importer has to get the Bill
of Entry noted in the concerned Noting Section which checks the consignment sought to be
cleared having been manifested in the particular vessel and a Bill of Entry number is generated
and indicated on all copies. After noting, the
Bill of Entry gets sent to the appraising section of the Custom House for assessment functions,
payment of duty etc. In the EDI system, the noting aspect is checked by the system itself, which
also generates Bill of Entry number.

9 After noting/registration the Bill of Entry is forwarded manually or electronically to the

concerned Appraising Group in the Custom House dealing with the commodity sought to be
cleared. Appraising Wing of the Custom House has a number of Groups dealing with
commodities falling under different Chapter Headings of the Customs Tariff and they take up
further scrutiny for assessment, import permissibility angle etc.

3. Self-assessment of imported and export goods:

1 Vide Finance Act, 2011, ‘Self-Assessment’ has been introduced under the Customs Act, 1962.
Section 17 of the Customs Act, 1962 provides for self-assessment of duty on imported and
export goods by the importer or exporter himself by filing a Bill of Entry or Shipping Bill, as the
case may be, in the electronic form (new Section 46 or 50). Thus, under self-assessment, the
importer or exporter who will ensure that he declares the correct classification, applicable rate
of duty, value, and benefit of exemption notifications claimed, if any, in respect of the imported /
export goods while presenting Bill of Entry or Shipping Bill.

2 Section 46 of the Customs Act, 1962 makes it mandatory for the importer to make entry for
the imported goods by presenting a Bill of Entry electronically to the proper officer except for
the cases where it is not feasible to make such entry electronically. It provides a legal basis for
electronic filing. Where it is not feasible to file these documents in the System, the concerned
Commissioner can allow filing of Bill of Entry in manual mode by the importer. However, this
facility should not be allowed in routine and Commissioner of Customs should ensure that
manual filing of Bill of Entry is allowed only in genuine and deserving cases. Similarly, on export
 side also, Section 50 of the Customs Act, 1962, provides the same procedure for the clearance.

3 The declaration filed by the importer or exporter may be verified by the proper officer when
so interdicted by the Risk Management Systems (RMS). In rare cases, such interdiction may also
be made with the approval of the Commissioner of Customs or an officer duly authorized by
him, not below the rank of Additional Commissioner of Customs, and this will necessarily be
done after making a record in the EDI system. On account of interdictions, Bills of Entry may
either be taken up for action of review of assessment or for examination of the imported goods
or both.

4 The verification of a self-assessed Bill of Entry or Shipping Bill shall be with regard to
correctness of classification, value, rate of duty, exemption notification or any other relevant
particular having bearing on correct assessment of duty on imported or export goods. Such
verification will be done selectively on the basis of the Risk Management System (RMS), which
not only provides assured facilitation to those importers having a good track record of
compliance but ensures that on the basis of certain rules, intervention, etc. high risk
consignments are interdicted for detailed verification before clearance.

5 One of the salient features of self-assessment is that verification of declarations and

assessment done by the importer or exporter, except for cases wherein a speaking order has
been passed by the proper officer while re-assessing the duty, can also be done at the premises
of the importer or exporter. This provision is being implemented as ‘On Site Post Clearance
Audit’ (OSPCA) programme. OSPCA has been applied to importers under the Accredited Client
Programme (ACP) with effect from 1.10.2011. The current Post Clearance Audit at Custom
Houses shall continue for other importers.

6 In cases, where the importer or exporter is not able to determine the duty liability / make self-
assessment for any reason, except in cases where examination is requested by the importer
under proviso to Section 46(1), a request shall be made to the proper officer for assessment of
the same under Section 18(a) of the Customs Act, 1962

7 Subsequent to introduction of self-assessment, it was felt that the existing facilitation levels
under RMS could be increased as responsibility of filing correct declarations has been shifted to
importers and exporters; the idea being to move towards a trust based Customs control while at
the same time fine tuning the risk parameters based interdictions through RMS to check against
non-compliance. Therefore, consequent to introduction of self-assessment, Board has decided
that the facilitation target to be achieved for Bills of Entries would be 80% at Air Cargo
Complexes, 70% at Seaports and 60% at ICDs.

4. Examination of goods:
All imported goods are required to be examined for verification of correctness of description given in
the Bill of Entry. However, ordinarily only a part of the consignment is selected on random selection
basis and examined. Under the EDI system, the Bill of Entry, after assessment by the appraising group
or first appraisement, as the case may be, needs to be presented at the counter for registration for
examination in the import shed. A declaration for correctness of entries and genuineness of the original
documents needs to be made at this stage. After registration, the Bill of Entry is passed on to the shed
Appraiser for examination of the goods. Along with the Bill of Entry, the CHA is required to present all
the necessary supporting documents.
5 Execution of bonds:
Wherever necessary, for availing duty free assessment or concessional assessment under different
schemes and notifications, execution of end use bonds with Bank Guarantee or other surety is required
to be furnished. These have to be executed in prescribed forms before the assessing Appraiser.

6. Payment of duty:
1 The duty can be paid in the designated banks through TR-6 challans. It is necessary to check the name
of the bank and the branch before depositing the duty. Bank endorses the payment particulars in
challan which is submitted to the Customs. Facility of epayment of duty through more than one
authorized bank is also available since 2007 at all major Customs locations.
In order to reduce the transaction costs and expedite Customs clearance the Board has decided to make
e-payment of duty mandatory from a date to be notified for the importers paying an amount of Rs. 1
lakh or more per transaction.

7. Amendment of Bill of Entry:

Whenever mistakes are noticed after submission of documents, amendments to the Bill of Entry is
carried out with the approval of Deputy/Assistant Commissioner. The request for amendment may be
submitted with the supporting documents.

8. Prior Entry for Bill of Entry:

For faster clearance of the goods, Section 46 of the Customs Act, 1962 allows filing of Bill of Entry prior
to arrival of goods. This Bill of Entry is valid if vessel/aircraft carrying the goods arrives within 30 days
from the date of presentation of Bill of Entry. This Bill of Entry has 5 copies, the fifth copy being called
Advance Noting copy. The importer must declare that the vessel/aircraft is due within 30 days and
present the Bill of Entry for final noting as soon as the IGM is filed.

9 Bill of Entry for bond/warehousing:

A separate form of Bill of Entry is used for clearance of goods for warehousing. All documents, as are
required to be attached with a Bill of Entry for home consumption are also required with the Bill of
Entry for warehousing which is assessed in the same manner and duty payable is determined. However,
since duty is not required to be paid at the time of warehousing, the purpose of assessing the duty at
this stage is only to secure the duty in case the goods do not reach the warehouse. The duty is paid at
the time of ex-bond clearance of goods for which an Ex-Bond Bill of Entry is filed. The rate of duty
applicable to imported goods cleared from a warehouse is the rate enforce on the date of filing of Ex-
Bond Bill of Entry.

10. Risk Management System:

‘Risk Management System’ (RMS) has been introduced in Customs locations where the EDI System
(ICES) is operational. This is one of the most significant steps in the ongoing Business Process Re-
engineering of the Customs Department. RMS is based on the realization that ever increasing volumes
and complexity of international trade and the deteriorating global security scenario present formidable
challenges to Customs and the traditional approach of scrutinizing every document and examining
every consignment will simply not work. Also, there is a need to reduce the dwell-time of cargo at
ports/airports and also transaction costs in order to enhance the competitiveness of Indian businesses,
by expediting release of cargo where compliance is high.

11 Risk Management Divisions:

With a view to streamline the operations of the RMS, a Risk Management Division (RMD) has been
created under the Directorate General of Systems.

12. National Risk Management Committee:

A National Risk Management (NRM) Committee headed by DG (Systems) reviews the functioning of the
RMS, supervise implementation and provide feedback for improving its effectiveness. The NRM
Committee includes representatives of Directorate General of Revenue Intelligence (DGRI), Directorate
General of Valuation (DGOV), Directorate General of Audit (DG Audit), Directorate General of
Safeguards (DGS) and Tax Research Unit (TRU), and Joint Secretary (customs), CBEC.

13. Local Risk Management (LRM) Committee:

A Local Risk Management (LRM) Committee headed by Commissioner of Customs has been constituted
in each Custom House / Air Cargo Complex / ICD, where RMS is operationalised. The LRM Committee
comprises the Additional / Joint Commissioner in charge of Special Investigation and Intelligence
Branch (SIIB), who is designated as the Local Risk Manager and includes the Additional / Joint
Commissioner in charge of
Audit and a nominee, not below the rank of a Deputy Director from the regional / zonal unit of the DRI,
and a nominee, not below the rank of Deputy Director from the Directorate of Valuation, if any.

14. Accredited Clients Programme:

The Accredited Clients Programme (ACP) has been introduced with the objective of granting assured
facilitation to importers who have demonstrated capacity and willingness to comply with the laws
administered by the Customs.
1 Export procedure – Shipping Bill:
For clearance of export goods, the exporter or his agent has to obtain an Importer- Export Code
(IEC) number from the Directorate General of Foreign Trade prior to filing of Shipping Bill.
Under the EDI System, IEC number is received by the Customs System from the DGFT online.
The exporter is also required to register authorized foreign exchange dealer code (through
which export proceeds are expected to be realized) and open a current account in the
designated bank for credit of any Drawback incentive.

2 Octroi exemptions for export goods:

Since the Shipping Bill is generated only after the ‘Let Export’ order is given by Customs, the
exporter may make use of export invoice or such other document as required by the Octroi
authorities for the purpose of Octroi exemption.

3 Waiver of GR form:
Generally the processing of Shipping Bills requires the production of a GR form that is used to
monitor the foreign exchange remittance in respect of the export goods. However, there are few
exceptions when the GR form is not required.

4 Arrival of export goods at docks:

The goods brought for the purpose of export are allowed entry to the Dock on the strength of
the check list and other declarations filed by the exporter in the Service Center. The custodian
has to endorse the quantity of goods actually received on the reverse of the check list.

5 Customs examination of export goods:

After the receipt of the goods in the Docks, the exporter/CHA may contact the Customs Officer
designated for the purpose, and present the check list with the endorsement of custodian and
other declarations along with all original documents such as, Invoice and Packing list, AR-4, etc.
The Customs Officer may verify the quantity of the goods actually received and enter into the
system and thereafter mark the Electronic Shipping
Bill and also hand over all original documents to the Dock Appraiser who assigns a Customs
Officer for examination and indicate the officers’ name and the packages to be examined, if any,
on the check list and return it to the exporter/CHA.

6 Examination norms:
In respect of consignments selected for examination, a minimum of two packages with a
maximum of 5% of packages (subject to a maximum of 20 packages from a consignment) shall
be opened for examination. The package number to be opened for examination is selected by
the EDI system. It is to be ensured that exporters do not split up consignments so as to fall
within the lower examination norms. Therefore, wherever on the same day the same exporter
attempts to export a second consignment (other than under Free Shipping Bills) involving
export incentive of Rs.1 lakh or less (Drawback/DEPB) or in other cases having the FOB value
upto Rs.5 lakhs to the same country, the EDI system would alert the Examining Officer. The
Examining Officer can then decide whether to subject the second consignment for examination
or not. In case the buyer in both or more consignments happens to be the same person,
subsequent consignments should be examined.

7 Factory stuffing permission:

The grant of a single factory stuffing permission valid for all the Customs stations instead of
Customs station-wise permission is permitted. This facility is subject to the following
safeguards:
(i) The exporter is required to furnish to Customs a list of Customs stations from where he
intends to export his goods
(ii) The Custom House granting the factory stuffing permission should maintain a proper
register to keep a track-record of such permissions, and also create a unique serial
number for each of such permissions.
(iii) The Custom House should circulate the factory stuffing permission to all Custom Houses
concerned clearly indicating the name and contact details of the Preventive
Officer/Inspector and Superintendent concerned of the Custom House granting the
permission as well as those of the Central Excise Range concerned to facilitate real time
verifications, if required.
(iv) In case something adverse is noticed against the exporter, the Customs station
concerned shall promptly intimate the Custom House granting the permission, which
will, in turn, withdraw the permission, and inform all Custom Houses concerned.

8 Variation between declaration and physical examination:

The check list and the declaration along with all original documents submitted with the
Shipping Bill are retained by the Appraiser concerned. In case of any variation between the
declaration in the Shipping Bill and physical documents/examination report, the Appraiser may
mark the Electronic Shipping Bill to the Assistant Commissioner/Deputy Commissioner of
Customs (Exports) along with sending the physical documents and instruct the exporter or his
agent to meet the Assistant Commissioner/Deputy Commissioner of Customs (Exports) for
settlement of dispute.

9 Drawn of samples:
Where the Appraiser Dock (Export) orders for samples to be drawn and tested, the Customs
Officer may proceed to draw two samples from the consignment and enter the particulars
thereof along with details of the testing agency in the ICES/EDI system. There is no separate
register for recording dates of samples drawn. Three copies of the test memo shall be prepared
by the Customs Officer and signed by the Customs Officer and Appraising Officer on behalf of
Customs and the exporter or his agent. The disposal of the three copies of the test memo is as
follows:
(i) Original – to be sent along with the sample to the test agency.
(ii) Duplicate – Customs copy to be retained with the 2nd sample.
(iii) Triplicate – Exporter’s copy.

10 Stuffing / loading of goods in containers:

The exporter or his agent should hand over the Exporter’s copy of the Shipping Bill duly signed
by the Appraiser permitting “Let Export” to the steamer agent who would then approach the
 proper officer (Preventive Officer) for allowing the shipment. In case of container cargo the
stuffing of container at Dock is done under Preventive Supervision. Further, loading of both
containerized and bulk cargo is to be done under Preventive Supervision.

11Amendments:
Any correction/amendments in the check list generated after filing of declaration can be made
at the Service Center provided the documents have not yet been submitted in the EDI system
and the Shipping Bill number has not been generated. Where corrections are required to be
made after the generation of the Shipping Bill number or after the goods have been brought into
the Export Dock, the amendments will be carried out in the following manner:
(i) If the goods have not yet been allowed “Let Export” the amendments may be permitted
by the Assistant Commissioner (Exports).
(ii) Where the “Let Export” order has already been given, amendments may be permitted
only by the Additional/Joint Commissioner in charge of Export.

12. Drawback claim:

After actual export of the goods, the Drawback claim is automatically processed through EDI
system by the officers of Drawback Branch on first-come-first-served basis. The status of the
Shipping Bills and sanction of Drawback claim can be ascertained from the query counter set up
at the Service Center. If any query is raised or deficiency noticed, the same is also shown on the
terminal and a print out thereof may be obtained by the authorized person of the exporter from
the Service Center. The exporters are required to reply to such queries through the Service
Center. The claim will come in queue of the EDI system only after reply to queries/deficiencies
is entered in the Service Center.

13 Generation of Shipping Bills:

After the “Let Export” order is given on the EDI system by the Appraiser, the Shipping Bill is
generated in two copies i.e., one Customs copy, one exporter’s copy (EP copy is generated after
submission of EGM). After obtaining the print out the Appraiser obtains the signatures of the
Customs Officer and the representative of the CHA on both copies of the Shipping Bill and
examination report. The Appraiser thereafter signs and stamps both the copies of the Shipping
Bill.

14 Export General Manifest:

All the shipping lines/agents need to furnish the Export General Manifests, Shipping Bill-wise, to
the Customs electronically before departure of the conveyance. Apart from lodging the EGM
electronically the shipping lines need to continue to file manual EGMs along with the exporter
copy of the Shipping Bills in the Export Department where they would be entered in a register.
The shipping lines may obtain acknowledgement indicating the date and time at which the
EGMs were received by the Export Department. .

15 Electronic Declarations for Bills of Entry and shipping Bills:

Bill of Entry (Electronic Declaration) Regulations, 2011 has been framed in supersession of the
Bill of Entry (Electronic Declaration) Regulations, 1995 to incorporate changes made vide
Finance Act, 2011 and mandate self-assessment by the importer or exporter, as the case may be.
Likewise, Shipping Bill (Electronic Declaration) Regulations, 2011 are framed in tune with
statutory provisions of Sections 17, 18 and 50 of the Customs Act, 1962

PROHIBITED AND RESTRICTED GOODS

The term “Prohibited Goods” has been defined in sub section 33 of Section 2 of the Customs Act thereby
meaning “any goods the import or export of which is subject to any prohibition under the Customs Act
or any other law for the time being in force”.
Import and export of some specified goods may be restricted/ prohibited under other laws such as
Foreign Trade (Development& Regulation) Act, Foreign Trade Policy, Environment Protection Act, Wild
Life Act, The Foreign Exchange Management Act, The Trade Marks Act, Arms Act, Drugs & Cosmetics
Act, etc. Prohibitions under those Acts will also be treated as Prohibitions under the penal provisions of
the Customs Act, rendering such goods liable to confiscation under section 111(d) of the Customs Act
(for import) and 113 (d) of the Customs Act (for export).

Some of the prohibitions and restrictions both for imports and exports are listed below:
Prohibited items (these are indicative only and not exhaustive):
Fire Arms
Pornographic and obscene materials
Maps and literature where Indian external boundaries have been shown incorrectly.
Narcotic Drugs and Psychotropic Substances.
Counterfeit goods and goods violating any of the legally enforceable intellectual property right
Chemicals mentioned in Schedule 1 to the Chemical Weapons Convention of U.N. 1993.
Wild life including its products and endangered species of plants and animals whether live or
dead
Specified Live birds and animals
Wild animals, their parts and products
Exotic birds except a few specified ones
Import of beef in any form and products containing beef in any form.
Specified Sea
shells
Human skeleton
Reptiles skin
Sex determination kits
Import of mobile handsets without IMEI number or with all zeros IMEI and CDMA mobile
phones without electronic serial number (ESN)/Mobile equipment Identifier (MEID) or with all
zeros as ESN/MEID.
Drawal of foreign exchange for travel to Nepal and/or Bhutan.
Any other item as notified from time to time

Restricted items (these are indicative only and not exhaustive):

Radio transmitters not approved for normal usage.
Arms and ammunition.
Medicines and drugs
Vintage products, replicas of antiques or weapons
Whole human blood plasma and certain products derived from human blood.
Sandal
wood (except handicraft products & oil)
Import of Multichannel GSM/CDMA receivers, transmitters and transreceivers capable of
receiving or transmitting or both in two or more frequencies simultaneously.
Any goods in trade quantity brought as part of passenger’s baggage for commercial purpose, for
profit or gain.
Export and import of Indian currency in excess of permissible limits.
Any other item as notified from time to time.

Whenever planning to bring or take any unusual item please enquire about its permissibility for export
or import before undertaking the journey. It’s a smart move to do so from ports, exit and destination so
as to ensure that you are in conformity with laws of both countries.
BAGGAGE AND PERSONAL IMPORTATION BYPASSENGERS AND TOURISTS

Passengers returning from countries other than Nepal, Bhutan, Myanmar or

China. - An Indian resident or a foreigner residing in India, returning from any country other than
Nepal, Bhutan, Myanmar or China, shall be allowed clearance free of duty articles in his bonafide
baggage to the extent mentioned in column (2) of Appendix A.
Provided that such Indian resident or such foreigners returning from Pakistan, by land route, shall be
allowed clearance free duty articles in his bona fide baggage to the extent mentioned in column (2) of
Appendix B.
Passengers returning from Nepal, Bhutan Myanmar or China. - An Indian resident or a foreigner
residing in India, returning from Nepal, Bhutan, Myanmar or China, other than by land route, shall be
allowed clearance free of duty articles in his bona fide baggage to the extent mentioned in column (2) of
Appendix B.
Professionals returning to India - An Indian passenger who was engaged in his profession abroad
shall on his return to India be allowed clearance free of duty, in addition to what he is allowed under
rule 3 or, as the case may be, under rule 4, articles in his bona fide baggage to the extent mentioned in
column (2) of Appendix C.
Jewellery. - A passenger returning to India shall be allowed clearance free of duty jewellery in his bona
fide baggage to the extent mentioned in column (2) of Appendix D.
Tourists. - A tourist arriving in India shall be allowed clearance free of duty articles in his bona fide
baggage to the extent mentioned in column (2) of Appendix E.
Transfer of residence. (1) A person who is transferring his residence to India shall be allowed
clearance free of duty, in addition to what he is allowed under rule 3 or, as the case may be, under rule
4, articles in his bona fide baggage to the extent mentioned in column (1) of Appendix F, subject to the
conditions, if any, mentioned in the corresponding entry in column
(2) Of the said Appendix.
(2) The conditions may be relaxed to the extent mentioned in column (3) of the said Appendix.

Provisions regarding unaccompanied baggage

(1) Provisions of these Rules are also extended to unaccompanied baggage except where they have
been specifically excluded.
(2) The unaccompanied baggage had been in the possession abroad of the passenger and is dispatched
within one month of his arrival in India or within such further period as the Assistant Commissioner of
Customs or Deputy Commissioner of Customs may allow.
(3) The unaccompanied baggage may land in India up to 2 months before the arrival of the passenger or
within such period, not exceeding one year, as the Assistant Commissioner of Customs or Deputy
Commissioner of Customs may allow, for reasons to be recorded, if he is satisfied that the passenger
was prevented from arriving in India within the period of two months due to circumstances beyond his
control such as sudden illness of the passenger or a member of his family, or natural calamities or
disturbed conditions or disruption of the transport or travel arrangements in the country or countries
concerned or any other reasons, which necessitated a change in the travel schedule of the passenger.

Application of these Rules to members of the crew. - The provisions of these Rules shall apply in
respect of members of the crew engaged in a foreign going vessel for importation of their baggage at the
time of final pay off on termination of their engagement.
Provided that except as specified in this sub-rule, a crew member of a vessel shall be allowed to bring
items like chocolates, cheese, cosmetics and other petty gift items for their personal or family use which
shall not exceed the value of rupees six hundred.
GENERAL EXEMPTION
A crew member of an aircraft shall be allowed to bring gift items like chocolates, cheese, cosmetics and
other petty gift items at the time of the returning of the aircraft from foreign journey for their personal
or family use which shall not exceed the value of rupees six hundred.

Articles allowed free of duty

(a) All passengers of and above 10 years of age returning after stay abroad for more than three years
(i) Used personal effects, excluding jewel and jewelry, required for satisfying daily necessities of
life.
(ii) Articles other than those mentioned in Annex. I up to a value of Rs. 25,000 if these are
carried on the person or in the accompanied baggage of the passenger.
(b) All passengers of and above 10 years of age and returning after stay abroad for three days
(i) Used personal effects, excluding jewel and jewellery required for satisfying daily necessities
of life.
(ii) Articles other than those mentioned in Annex. I up to a value of Rs. 12,000 if these are
carried on the person or in the accompanied baggage of the passenger.
(c) All passengers up to 10 years of age and returning after stay abroad for three days or more than t
hree days.
(i) Used personal effects, excluding jewel and jewellery required for satisfying daily necessities
of life.
(ii) Articles other than those mentioned in Annex. I up to a value of Rs. 6,000 if these are carried
on the person or in the accompanied baggage of the passenger.
(d) All passengers up to 10 years of age and returning after stay abroad of three days or less
(i) Used personal effects, excluding jewel and jewellery, required for satisfying daily necessities
of life.
(ii) Articles other than those mentioned in
Annex. I Up to a value of Rs. 3,000 if these are carried on the person or in the accompanied
baggage of the passenger

(See rule 4)
(a) Passengers of and above 10 years of age and returning after stay abroad for more than three days
(i) Used personal effects, excluding jewellery, required for satisfying daily Necessities of life.
(ii) Articles other than those mentioned in Annex. 1 Up to a value of Rs. 6,000 if these are carried
on the person or in the accompanied baggage of the passenger.
(b) Passengers up to 10 years of age and returning after stay abroad for more than three days
(i) Used personal effects, excluding jewel and jewellery, required for satisfying daily necessities
of life.
(ii) Articles other than those mentioned in
Annex. 1 up to a value of Rs. 1500 if these is carried on the person or in the accompanied
baggage of the passenger.
Explanation - The free allowance under this rule shall not be allowed to be pooled with the free
allowance of any other passenger.

(See rule 5)
Articles allowed free of duty
(a) Indian passenger returning after at least 3 months (i) Used household articles up to an aggregate
value of Rs. 12,000.
(ii) Professional equipment up to a value of Rs.20, 000.
(b) Indian passenger returning after at least 6 months (i) Used household articles up to an aggregate
value of Rs. 12,000.
(ii) Professional equipment up to a value of Rs.40,000.
(c) Indian passenger returning after a stay of minimum 365 days during the preceding 2 years
(i) Used household articles and personal effects, availed this concession in the preceding three years or
his family for at least six months up to an aggregate value of Rs. 75,000

GENERAL EXEMPTION
(See Rule 6)
Indian passengers who has been residing abroad (i) Jewellery up to an aggregate for over one year.
Value of Rs.10 000 by a gentleman passenger, or
(ii) Up to an aggregate value of Rs.20,000 by a lady passenger.

(See rule 7)
Article allowed free of duty
(a) Tourists of Indian origin other than those (i) Used personal effects and travel coming from Pakistan
by land route. souvenirs, if-
(a) these goods are for personal use of the tourist, and
(b) these goods, other than those consumed during the stay in India, are re-exported when the tourist
leaves India for a foreign destination.
(ii) articles as allowed to be cleared under rule 3 or rule 4.
(b) Tourists of foreign origin other than those of (i) Used personal effects and travel Nepalese origin
coming from Nepal or of Bhutanese souvenirs, if - origin coming from Bhutan or Pakistani origin (a)
these goods, are for personal use of coming from Pakistan the tourist and
(b) these goods, other than those consumed during the stay in India, are re-exported when the tourist
leaves India for a foreign destination.
(ii) articles upto a value of Rs. 8,000/- for making gifts.
(c) Tourists of Nepalese origin coming from Nepal No free allowance or of Bhutanese origin coming
from Bhutan.

GENERAL EXEMPTION
(d) Tourists of Pakistani origin or foreign tourists (i) used personal effects and travel coming from
Pakistan or tourists of Indian origin souvenirs, if coming from Pakistan by land route. (a) these goods
are for personal use of the tourist, and
(b) these goods, other than those consumed during the stay in India, are re-exported when the tourist
leaves India for a foreign destination.
(ii) articles up to a value of Rs. 6000 for making gifts.
Annexure - I
1. Fire arms.
2. Cartridges of fire arms exceeding 50.
3. Cigarettes exceeding 200 or cigars exceeding 50 or tobacco exceeding 250 gms.
4. Alcoholic liquor or wines in excess of two litres.
5. Gold or silver, in any form, other than ornaments.

GENERAL EXEMPTION
Annexure - II
1. Colour Television or Monochrome Television.
2. Digital Video Disc Player.
3. Video Home Theatre System.
4. Dish Washer.
5. Music System.
6. Air –Conditioner.
7. Domestic refrigerators of capacity above 300 liters or its equivalent .
8. Deep Freezer.
9. Microwave Oven.
10. Video camera or the combination of any such video camera with one or more of the
Following goods, namely:-
 (a) Television Receiver;
(b) Sound recording or reproducing apparatus;
(c) Video reproducing apparatus.
11. Word Processing Machine.
12. Fax Machine.
13. Portable Photocopying Machine.
14. Vessel.
15. Aircraft.
16. Cinematographic films of 35 mm and above.
17. Gold or Silver, in any form, other than ornaments.”

Annexure III
1. Video Cassette Recorder or Video Cassette Player or Video Television Receiver or Video Cassette Disk
Player.
2. Washing Machine.
3. Electrical or Liquefied Petroleum Gas Cooking Range
4. Personal Computer( Desktop Computer)
5. Laptop Computer( Laptop Computer)
6. Domestic Refrigerators of capacity up to 300 liters or its equivalent.”

GENERAL EXEMPTION
Effective rates of basic duty of customs on specified goods imported by persons returning to
India after a period of not less than one year of stay abroad.
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs
Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest
so to do, hereby exempts the goods specified when imported by-
(a) any person holding a valid passport issued under the Passports Act, 1967 (15 of 1967) and
returning to India after having stayed abroad for at least 365 days during the two years immediately
preceding the date of arrival in India; or;
(b) Any person on a bonafide transfer of residence to India as part of his bonafide baggage. From the
whole of the duty of Customs leviable thereon under the said First Schedule.
In case of (a) above,-
(i) such person has been working aborad and is returning to India on termination of such work after
having stayed abroad for atleast 365 days during the two years immediately preceding the date of
arrival in India;
(ii) such person affirms by a declaration that the goods have been in his possession abroad or, the goods
are purchased by such person at the time of his arrival, but before clearance from customs, from the
duty free shop located in the arrival hall of the international airports;
(iii) Omitted
(iv) the goods (other than those purchased from the duty free shops at the time of arrival of such
passenger) not accompanying such passenger were shipped or dispatched or arrived within the time
limits specified in the Baggage Rules, 1998; and
(v) in respect of such goods, not more than one unit shall be permissible to such person and the total
aggregate of value of the such goods including other goods imported free of duty by him under rule 5 of
the Baggage Rules, 1998 shall not exceed rupees seventy five thousand.
In case of (b) above,-
(i) Such person has been residing abroad for a minimum period of two years immediately preceding the
transfer of residence and has not availed this concession in the preceding three years.
(ii) such person affirms by a declaration that the goods have been in his possession abroad or, the goods
are purchased by such person at the time of his arrival, but before clearance from customs, from the
duty free shop located in the arrival hall of the international airports;
(iii) Omitted
(iv) the goods (other than those purchased from the duty free shops at the time of arrival of such
passenger) not accompanying such passenger were shipped or dispatched or arrived within the time
limits specified in the Baggage Rules, 1998;
(v) not more than one unit of each item of such goods shall be permissible per family and the person
claiming the benefit of this notification affirms by a declaration that no other member of the family had
availed of, or would avail of, the benefit of this notification in respect of that item; and
(vi) The total aggregate value of such goods shall not exceed Rs. 5 lakhs.

1 Video Cassette Recorder or Video Cassette Player or Video Television Receiver or Video Cassette, Disk
Player.
2 Washing Machine.
3 Electrical or Liquefied Petroleum Gas Cooking Range
4 Personal Computers (Desk Top Computer)
5 Laptop Computers (Notebook Computer)
6 Domestic refrigerators of capacity up to 300 litres or equivalent

Table - II
1 Colour Television or Monochrome Television.
2 Digital Video Disc Player.
3 Video Home Theatre System.
4 Dish Washer.
5 Music System.
6 Air-Coditioner.
7 Domestic refrigerators of capacity above 300 litres or its equivalent.
8 Deep Freezer.
9 Microwave Oven.
10 Video camera or the combination of any such video camera with one or more of the
following goods, namely:-
(a) Television Receiver;
(b) Sound recording or reproducing apparatus;
(c) Video reproducing apparatus.
11 Word Processing Machine.
12 Fax Machine.
13 Portable Photocopying Machine.
14 Vessel.
15 Aircraft.
16 Cinematographic films of 35 mm and above.
17 Gold or Silver, in any form, other than ornaments.

LIST OF EXPORT PROMOTION SCHEMES

To achieve the objectives laid down under the Foreign Trade Policy 2004-09 and double India’s
percentage share of global merchandise trade by the year 2009, the government is committed to
providing a stimulus to exports through various export promotion schemes from time to time. Details of
the existing Export Promotion Schemes are as follows:
1. Advance licensing scheme
2. Duty Free Replenishment Certificate (DFRC) scheme
3. Duty drawback scheme
4. Export Promotion Capital Goods (EPCG) scheme
5. Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTPs), Software
Technology Parks (STPs) scheme
6. Served from India scheme
7. Target Plus scheme
8. Duty Entitlement Pass Book (DEPB) Scheme
 9. Vishesh Krishi Upaj Yojana

The Government has formulated a number of export promotion schemes to support and promote
exports. Except for Duty Drawback Scheme, the policy framework for various export promotion
schemes is laid down in the Foreign Trade Policy 2004-09, whereas the procedures governing the
schemes are detailed in the Handbook of Procedures, VoI-I 2004-09. The Department of Revenue has
issued notifications to operationalise the scheme.

The objectives of most schemes are to neutralize the incidences of levies and duties on inputs used in
export products, based on the fundamental principle that duties and levies should not be exported.
Presently, the major schemes are either duty exemption or duty remission schemes. Duty exemption
schemes enable duty-free import of inputs required for export production. An Advance Licence is
issued as a duty exemption scheme. A Duty Remission Scheme enables post export replenishment /
remission of duty on inputs used in the export product. Duty remission schemes consist of (a) DFRC; (b)
DEPB Scheme and Drawback. DFRC permits duty-free replenishment of inputs used in the export
product. DEPB allows drawback of import charges on inputs used in the export product. The Drawback
Scheme intends to neutralize the incidence of central taxes paid on inputs used in the manufacture of
export goods.

Besides, there are other schemes in operation which are basically in the nature of reward schemes to
reward high performing exporters. Target Plus, Served from India and Vishesh Krishi Upaj Yojana are
reward schemes. Rewards are given on the basis of incremental exports / export turnover and such
rewards have no linkage whatsoever with the duties and taxes borne on export goods.

FUNCTION AND POWER OF CUSTOMS AUTHORITIES

Custom is an Indirect Tax, with the increase of foreign trade; its importance has also increased. It is
levied by the Central Government. To administer the system of this tax, Government has established the
chain of officers. The Custom Commissioner is considered as the top authority for the administration of
this system.

The Central Board of Excise and Customs is the supreme authority to regulate the various officers of
this department. This Board was constituted in the year of 1963 under Central Boards of Revenue Act.
One Chairman and six Members are appointed by the Government in this Board, out of six members one
member look after the administration of Central Excise Duty and one member is in charge of Custom
Duty. Third member is responsible for financial matter and rests of the members are entrusted with
different duties. This Board works under the finance minister.

FUNCTIONS AND POWERS OF BOARD

The main functions and powers of the Central Board of Excise and Customs are as under:-
(1) The officers are appointed by the board according to the rules and officers have to work according
the instructions of the board.
(2) The board sends the order, instruction and information to the officers regarding discharge of their
duties. If any proceeding is pending in the court or before any appellate authority than the board will
not intervene.
(3) Work is distributed among all the members by the board.
(4) The board can delegate its powers to the subordinate officer through notification.

OFFICERS OF CUSTOMS
To administer the system of Custom Duty following officers are appointed by the board:-
(1) Chief Commissioners of Customs
(2) Commissioner of Customs
(3) Commissioner of Customs (Appeals)
 (4) Deputy Commissioner of Customs
(5) Joint Commissioners of Customs
(6) Assistant Commissioner of customs
(7) Other officers appointed to administer the system.

FUNCTIONS AND POWERS OF CUSTOMS OFFICERS

(1) Power of Investigation
(2) Power of searching
(3) Power to screen or X-ray bodies of suspected persons for detecting secreted
(4) Power to arrest
(5) Power to search premises
(6) Power to inspect
(7) Power to require production of order permitting clearance of goods imported by land.
 Unit – IV
Types of Assets
There are two kinds of assets
1. Movable
2. Immovable
According to the provisions of registration act only on the transfer of the immovable property
registration becomes compulsory.
The following assets are included in the list of fixed assets
1. Land & building
2. Hereditary allowance
3. Rights to ways
4. Right to light
5. Right to ferries
6. Right to fisheries
7. Benefit arise from land
8. Things attached to the earth
9. Things attached with land permanently
Types of Immovable Assets
1. Agricultural land
Agricultural means a land which is used for the agricultural purposes. But so far as registration
act is concerned a land which is used for agricultural purposes and for the allied activities of
agricultural is also considered as agricultural land.
2. Non Agricultural Land
Non Agricultural land word is a very broad Non-Agricultural land means a land which is being
used for some other purposes but which is related with the agricultural itself.
3. Residential, Commercial and industrial land
A land which is being used for the construction of structure is known as Residential,
Commercial and industrial land.
4. House, flat and offices
Houses or Building is a immovable asset. As houses are constructed on the land which cannot be
separated that’ why according to Indian registration act it is considered as immovable assets
Meaning & Registration of Prakosth
This is a very well known fact that Urban population is increasing very rapidly and houses in the urban
areas are not adequate due to this reason trend of high rise is increasing. This is also a kind of building.
Though it is a kind of building inspite of that there are some specific rule and process are given for the
sale and registration of it.
Meaning of Prakosth
Prakosth is a building or multistoried building which is constructed as an independent unit. In which
entry corridor stairs parking, lift, garden, terrace are being used by the entire resident.
Measurement of Properties
To evaluate and register the immovable measurement is essential because on the basis of that
measurement stamp duty is imposed.
Use of measurement of properties
Measurement is used in the registration for the following proposes
1. For mentioning in document
2. For determination of value of property
3. For determination of location or property
4. For calculating stamp duty
5. For determination of different amount
6. For determination of land revenue and property tax
7. For determination of compensation
8. For division of property
Basis of measurement of various types of properties
The immovable properties are –
1. Agricultural land – Agricultural land is measured in hectare acre and bighas.
2. Residential Commercial Plots – Residential and Commercial plots are measured in sq. ft. and sq.
mt.
3. Building & houses – Measurement of constructed buildings & houses is a cumbersome job. The
property which is to be registered is measured on the basis of length and flows. For e.g., plinth
area, carpet area, floor area, open area and compound wall.
4. Prakoshth or Flats – Measurement of prakoshth or flats is measured on the basis of different-
different units.
Scale of conversion of measurement to metric system
1. In case of Plot, House and flat
1 sq.mt. = 10.76 sq.ft.
2. In case of Agricultural land
Hectare = 1,07600 sq.ft or 10,000 sq.mt.
1 acre = 43,560 sq.ft
1 bigha = 27,512 sq.ft.
 UNIT – V
At the time of sale of Land, building, Plot, Flat and complex registration of these immovable properties
are mandatory. For the registration of the sale provision of Registration Act 1908 becomes an
applicable.
Main features of Registration Act 1908
The main features of Registration Act 1908 are as under –
1. Short title extend and Commencement
2. Objects of Act
3. Subject Matter
4. Documents of which registration is compulsory
5. Documents of which registration is not compulsory
6. Documents of which registration is optional
Process of Registration
To register the immovable property a State Government has established registration office at various
levels. The work of registration is performed by the registrar, Deputy Registrar and by other assistant.
The process of registration are-
1. Preparation of contract deed
2. Preparation of Draft or document
3. Preparation of final document
4. Photographs and signature
5. Submission of document to registrar or sub-registrar
6. Completion of registration
7. Entry in the Registers of the Registration office
8. Delivery of registered document to purchasee
Registration Authorities
In every state a separate department of registration is working at various level. The detail of these
officers is as under –
1. Inspector General of Registration
2. District registrar
3. Deputy Registrar
4. Registration Mohrrir
5. Record Keeper
Name transfer after Registration
After registration of immovable property the buyer will file an application to the municipal corporation
in other departments for the name transfer. The meaning of name transfer is that buyer name will be
recorded as the owner of the property by all the concerning departments.
Process of name transfer
1. Name transfer of Agricultural Land
a. Filing of an application for the transfer
b. Documents to be enclosed with application
c. Public notice
d. Transfer
Proforma of document
The following documents are submitted for the registration of immovable property
1. Agreement deed
2. Sale deed
3. Donations deed
4. Will
5. Transfer of Right deal
6. Power of Attorney
7. Appeal application
8. Other
Precautions regarding writing of document
Aforesaid documents are generally prepared by document writer in the prescribed manner. At the time
of preparation of these documents the following points must be observed carefully.
1. To prepare in the prescribed proforma
2. Documents are prepared only in Hindi or English.
3. Essential information must be included
4. Inclusion of essential conditions
5. Prescribed stamp must be affixed
6. Signature and photograph
Guidelines for determination of Market Value
The liability of stamp duty is determined on the basis of value of property. At the time of transfer of
immovable property value of stamp duty and registration fees is determined only on the basis of value
of asset. For the purpose of registration of property to values are important.
1. Transaction value
2. Market value as per guideline