Establishing and growing a business takes a long time. This effort can be made in the form of an establishment abroad. In India, companies are continuously expanding their businesses by selling goods and services across borders. However, businesses looking to set up a trading company or start trading from India should understand the steps, learn about the documents, stakeholders and regulatory framework.
For example, starting an international code will require some essentials like IEC in the first place. The list is longer for these documents. So today we are here with some valuable information that can help you get started!
Some underlying authorities and guidelines allow trade flow in a particular direction. The Foreign Trade (Development and Regulation) Act 1992 empowers the Federal Government to make arrangements for the development of foreign trade and governs import and export from India.
First, we’ll walk you through the guide for imports:
Procedure for importing goods: at a glance
Typically, the process is to ensure licensing and compliance. This must be done before the stage of dispatching the goods. During this time, it is also necessary to organize the transport of the goods and the warehouse. After that, when the goods are unloaded, it is necessary to obtain customs clearance and pay the corresponding taxes.
The detailed steps involved in importing goods are outlined below.
1. Obtain the IEC
As mentioned earlier, before importing goods from India, each company must obtain an import-export number from the regional DGFT. Obtaining this number again requires a list of other formalities and documents. The IEC registration procedure takes about 10 to 15 days. However, the IEC is a PAN-based record. It allowed merchants looking for lifetime validity of this code. This code is required at several stages of the business process. It is mainly needed for customs clearance, shipments, and sending or receiving money in foreign currencies.
2. Ensure legal compliance with various trade laws
This step is as crucial as placing the documents on your table! To trade without any complexity, you need to ensure that you have complied with the relevant legalities. Legalities can take the form of product restrictions, company size or any other government requirement.
But it is assured that companies with an IEC can import goods that comply with the following regulations:
Foreign Trade Law (1992),
Article 11 of the Customs Law (1962),
Foreign Trade Policy, 2015-20.
Some items require additional permits and licenses from the DGFT and the Federal Government as they are restricted and notified by the Government.
3. Obtain import licenses
To obtain the import license, an importer must first classify the item. This is to be done by identifying the goods in Indian Trading Clarification, which is again based on a harmonized coding system. The International Trade Classification (ITC) is India’s main method of classifying items for trade and import-export operations.
It is essential to determine whether a license is required to import a specific commercial product or service. Many people confuse this code with IEC. But these two codes are totally different. The DGFT ITC-HS code is an 8-digit alphanumeric code that represents a specific class or category of goods and allows the importer to comply with the regulations applicable to those goods.
A general license or a specific license can be used to import goods. A general permit allows goods to be imported from any country, while a particular or individual license only allows imports from specific countries.
4. Find the entry invoice and other documents:
To complete customs clearance formalities, submit an entry declaration. An entry invoice provides accurate information, including the quantity and value of the goods.
After obtaining import licenses, importers must provide the import declaration and a Business Identification Number (BIN). These regularities are in accordance with Article 46 of the Customs Law (1962).
If the goods are cleared using the Electronic Data Interchange system, there is no need to lodge an official entry declaration. However, after prescribing the details, the importer must file a cargo report.
In the other case, if the BOE is not filed using EDI, the importer must provide supporting documents such as:
● commercial invoice,
● inspection certificate,
● bill of exchange
● certificate of origin,
● and a packing list.
Customs officers review and assess the information provided in the entry declaration and compare it to the imported items once the goods have been shipped. If there are no irregularities, a “place an order”, allowing the imported goods to be replaced by customs.
How many different products can one import-export number export?
Before starting trade settlements, it is crucial to keep the two most important questions in mind:
● whether a company can import and export without a registration code, and,
● how many different product types can be imported in one code.
The answer to these questions is that the import and export code is a legal requirement for every business. The IEC registration code also proves that the company is credible and trustworthy in its business operations.
In addition, individuals must also open a bank account during the IEC registration period. It’s part of the process! A bank account is required as all funds related to business operations must be received in this account.
The answer to the other question is that you can process multiple products with one code. However, the user should check the EPC to see if the product category is included or not. In conclusion, the different types of products can be exported under an IEC, but they must comply with the EPC directives.
The bottom line:
The business scenario in India is establishing itself at a faster pace in India. A trading company can start importing or exporting from India, but they need to understand the steps and stakeholders involved. This will also prevent traders from future spreads. At the same time, the regulatory framework and the required documentation must also be ensured.
There are aids and support from Indian government for better clarity. Indian Customs Compliance Information Portal is an exemplary aid that contains the details related to customs procedures and regulatory compliances for import-export trade. The Indian customs authorities initiated it. This informative guide provides a brief overview of relevant import procedures in India and key considerations related to the IEC process.