Custom Act

Total Sections = 160

Limited Sections

Sec 1-11 Not in course

Sec 12 Charging section

Sec 13 – 24 Almost all sections

Sec 29 to 55 Procedure part

Sec 56 to 75 Warehousing provisions

Sec 75 to 76 Duty drawbacks

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 Charging Sections -12 of Custom Act

 Custom duty will be levy on import or export of Goods

 Custom duty will be levied as per Custom Tariff Act

 Custom duty will be levy even import of goods by Govt except

certain circumstances.

 Three are some case where duty will be exempt

 Generally duty will be levy on value of Goods. however some

cases duty will be levy on quantity of goods

 There are lots of duty which is levied on import of goods

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 Import procedure (Chart I)

FOB
USA CIF India

Transportations + Insu.

Shipping

100 I-phone Contract price = $ 50000

Iphone Loading charges, = $ 100 importer
Apple Packing charges = $ 200
Transportations charges = 300$
USA custom port = 400$
Royalty = 500$
========== FOB =$ 51500
Transportations charges = $500
Insurance charges = 100$
$ CIF = $ 53000
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 Types of duty and sequence of duty

CIF Value $ 53,000

Exchange Rate [CBIC] 1$ = 75 x 75
Value in Rs. 39,75,000

Add: Basic custom duty @ 10% on Rs. 39,75,000 3,97,500 (D1)

Add: Social welfare surcharge @ 10% 39 ,750 (D2)

Total value for levy IGST 44,12,250

Add: IGST @ 12% on Rs. 44,12,250 5,29,470 (D3)

Add: GST Compensations Cess @ 15% 6,61,837 (D4)

Total value of Imported Goods 56,03,557

Total Duty: [56, 03,557 – 39, 75,000] 16,28,557 x 3

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There are some more duty which can also levy

o Safeguard duty
o Protective duty
o Anty subsidies
o Any dumping duty
 o How to compute value of goods
o Types of duty levied
o Sequence of duty
o What happened if exchange rate change
o What happened if duty rates changes
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Date 24/4/2020
Import Procedure Chart -2
India
Person in ITW
USA charge
12 NM

USA India Custom

Custom port
port --------------------------------------
------------------------------------------------------
Shipping bill
- -----------------------------------------------------------
Import manifest
Or
Import report
Electronically

Apple company

Proper officer

ENTRY INWARD- grant to person in

charge
Date
Time place
 Custodian
Chart 3
Warehouse

Importer

Bill of entry for home Bill of entry for

consumptions warehouse (into bono)
PO will pass an order “Order clearance
for home consumptions”

Bill of entry
Assessment of duty
Attached necessary document
Proper Invoice copy
officer Bill of entry Bill of lading copy
submitted to PO Packing list

Inforom to PO
that I have paid ID
Ask to importer please pay the duty

Importer will pay duty in authorised of

bank (28)

- Duty assessed by importer himself will pay same date on which

bill of entry for home consumption filed.
Jo kud ne assess kiye h wo same day per or proper duty ko
increase koiya h uske liye ek din milega
= Bills of entry ×bond
 - If any duty increased by proper officer, then increased duty will
pay by importer in 1 day
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Chart – 4 (warehouse – INTO BOND]

Custodia
n Warehouse

Importer
He will transfer goods into warehouse

Bill of entry for

Bill of entry for home
warehouse (into bond)
consumptions
- 59
PO will pass an order “Order for
deposit into warehouse” – Sec 60

Bill of entry
Assessment of duty
Bond of thrice duty
Proper Attached necessary document
officer Bill of entry for ware housing Invoice copy
into bond submitted to PO Bill of lading copy
Packing list

Proper officer will verify the

assessment of duty and bond value.
 CHART – 5 (WAREHOUSE EX-BOND)
Warehouse
keeper

Export from warehouse

Warehouse

Cleared for home consumptions [68]

Importer

Bill of entry for home Bill of entry for

consumptions warehouse (ex bond)
PO will pass an order “Order
for home consumptions”

Bill of entry
Assessment of duty
Bill of entry for ware housing Attached necessary document
Proper Ex - bond submitted to PO Invoice copy
officer Bill of lading copy
Packing list

Inform to PO that
I have paid ID
Ask to importer please pay the duty

Importer will pay duty in authorised of

bank (28)
STEP: 1 Importer will Bill of entry into bond u/s 46 (Yellow) &
Submitted to Proper officer
o Valuations of goods
o Determine exchange rate
o Assessed of duty
o File bond of 3 time of duty

STEP: 2 Proper officers check and verify all documents

STEP:3 Proper officer pass an order for deposit into warehouse

STEP:4 Goods transfer from custodian to warehouse

STEP:5 On maturity importer file an applications Bill of entry for HC

[Green colour] to Proper officer

STEPL:6 Proper officer ask for paying ID and warehouse charges if

Any and importer will pay the same

STEP:7 Proper office issue clearance order (i.e. gate pass)

STEP: 8 Importer will take delivery from custom warehouse

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 Rate of Exchange & Rate of duty Sec 14

Import Export
Bill of entry Warehousing Shipping bill
into home Bill of entry Bill of entry Or
entry into bond ex bond Date of export
(while) (yellow) (green)
Date on Date on which
Exchange rate which Bill of shipping bill
entry filed filed
Rate of duty Date of entry Date on which
& inwards proper officer
Tariff value Or pass “”order of
Date of bill of permitting
entry filed export and
(later) clearance
order””
 Export procedure

Exporter will submitted Bill of

export or shipping Bill to STEP: 6
proper officer along with Step 1
Before leaving India
necessary documents Proper officer person in charge
submitted export manifest
to proper officer
Step -2
Proper office will check documents STEP: 5
and ask for paying export duty. After
Grant entry
payment of duty proper officer will
outward and after
pass an order
that goods will
“Order permitting clearance & Loading
upload on vessel
of goods for exportations” [ i.e. Export
Clearance order]

SETP 3
Step : 4
Exporter will submitted following to person
Person in charge will ask ENTRY
in charge of shipping company:
OUTWARD from proper officer for
 Goods
loading the goods into his
 Invoice conveyance
 And .e. Export Clearance order]

Import manifest - Export manifest

Entry inwards - entry outwards
Bill for HC/WH - Shipping bill or export
PIC – Importer - Exporter - PIC
 Sec 14, 15 & 16

Particulars In case of import of goods

Goods cleared for home Goods cleared for warehouse
In case of export
consumptions
Into bond Bill of Ex bond bill of
entry entry
Exchange Rate Date on which BOE filed Date on which Into Date on which
Bond BOE filed - shipping bill filed
Rate of duty or  DATE ON WHICH BILL OF
tariff ENTRY filed A Bill of entry for Date on which,
valuations OR home proper officer
 DATE OF ENTRY INWARDS makes an order
- consumptions
of Vessel/Aircraft or permitting
(Ex-bond bill of clearance &
VEHICLE
entry) is loading of goods
presented for exportations
WHICHEVER IS LATER.
[i.e. STEP 2]

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Sequence of duty
Ex: The Assessable value of imported goods is Rs. 10 lakh. The Basic
custom duty is 10%. Integrated tax leviable under Sec 3(7) of Custom Tariff Act is
12%. GST Compensations cess is leviable @ 15%. Social welfare surcharge @
10%. Compute the Total Custom duty and imported cost of the goods.

Computations of imported
Assessable Value u/s 14(1) [A] $10100
Add: Basic Custom Duty @ 10% [A] [B] 65
Add: SWS @ 10% of Basic Custom duty [B] [C] 656500
Total Value for levy Integrated Tax [D]
Add: IGST @ 12% of [E]
Add: GST Compensations Cess @ 15% on Value of D [F]
Total Cost of Imported goods
Total Custom duty payable [ B+C+E+F]
 How to find out assessable value

 Back ground: While filing of billing of entry a valuation declarations is required to

be filed by Assessee under Rule 11 of custom rules 2017, regarding: (A) Value of
Goods (B) Quantity of Goods etc. along with all other clearance documents. E.g Bill
of lading, packing list, invoice etc.

 As per Rule 12 proper officer may reject such declarations if he has reason to
doubt the truth or accuracy of value declared:

If such declarations is If such declarations is

not rejected by PO rejected by PO

whether all conditions Then as per Rule 3(4) follow

YES of Rule 3(2)(a),(b) (c) (d) No Rule 4 to 9 sequentially:
are satisfied ? Rule: 4 AV: Value of Identical Goods
Rule: 5 AV: Value of Similar Goods
Rule: 7 AV: Deductive Value
Then As per Rule 3(1), AV = Transactions Value Rule: 8 AV: Computed Value
(Declared Value) Rule: 9 AV: Best Judgements

Sec 14 Rule 10 Rule 10

(1) (2) (1)

Price actually Cost of  Cost of Commission, packing etc.

paid or payable Transportations  Apportioned cost
for goods to +  Royalty & License fees
Exporter or to Cost of Insurance  Subsequent out flow
anyone on behalf  Any other expenses conditions
for
of exporter by
Sale
importer

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