Understanding customs clearance costs & procedure

When you bring goods or services into the US, of course, you expect to pay for transportation. But as you plan an import in any country, remember that it also costs money to clear the customs via US customs, even when the product is not subject to any duties.

Freight Forwarding Customs Clearance is a hard process and could be time-consuming. Most of the customs clearance services documents are similar, though some people depend on the nature of imported goods. A custom clearance services procedure includes multiple steps like obtaining, preparing, and submitting the documentation needed to facilitate export procedures and imports into the country. 

Customs clearance includes customs examination, evaluation, payment of duty, and bringing the cargo into the country after it has been cleared with documentation.

A Customs Freight Solution is necessary in the following cases:

• Wherever any goods or services are loaded for exports/imports
• Sea and Airports
• International courier services in Airports 
• Coastal ports
• Land and Sea customs stations

Many of you must be thinking about How much does customs clearance cost? 

Customs Clearance Costs

In addition to the import and export duties, India charges around a 1% customs handling fee on all imported goods/services. This cost is charged on the total value of the goods/services the freight forwarder costs and Insurance.  

Here is a simple example to understand the calculation of the import duty in India.

PLEASE NOTE: Estimate value might vary depending on the Incoterm used.

Import Customs Clearance Process:

All investors, manufacturers, and businesses should undergo the import customs clearance process at the time of import clearance. Here are certain steps that must be followed to import their goods.

• Calling of vessels

If the goods reach a country, the person who was there to carry the vessels shall ensure that the ships are available at the customs port. And, if the goods are being imported via vessel then the pilot is responsible for the call of the vessels at the seaport. 

• IGM ( Filing Import General Manifest)

The procedures to file IGM (Import General Manifest) is pursued by the carrier of goods and can be done electronically before the goods arrive. This file includes all the details of the goods imported by the vessel.

• Operations on post-verification 

During the post-verification of the documents the customs authorities will grant entry for the goods along with the IGM number to the manifest and permit the master to bring the vessel and unload the cargo.

On the arrival of the vessel, the goods will further remain in the custody of the custodian until it clears the entire customs procedure. Moreover, a custodian can be a person that has been approved by the Principal Commissioner for this whole procedure. Imported goods can be unpacked if they satisfy certain conditions.

• Allow Assessment

The value appraising officer of customs verifies that the goods that will be imported are the same as the importer reporter in submitted documents. If required, an assessing officer of customs can also give his order to inspect the whole imported goods vessel. In such cases, all the pieces and packets of the goods are sent to the customs bonded area, and then a thorough inspection of imported goods/services (if applicable).

Moreover, once the classification of imported goods is done, the rate of import duty is reflected electronically on the basis of the software system of Customs Tariffs.

• EDI Assessment

In EDI (Early Development Instrument) Assessment of a bill of entry, the declaration of cargo is transferred to the assessing officer and will be evaluated by him. Further, the EDI system offers the information regarding the calculation of duty, if needed, and it will undoubtedly apply to the specific rate of exchange while calculating.

After the assessment is completed, a copy of the assessed Bill of entry and all the other supporting documents are examined at the time of examination of goods that are ready to import or export. Further, the importer has to pay the duty calculated by the system to let the process finish.

• Testification of goods

All the imported goods are checked to verify the accuracy of the description given in the Bill of entry. However, the part of the delivery is therefore chosen and randomly looked. Also, the goods will be inspected efficiently before assessment in case the importer does not have complete information. At the time of Import or even if the Customs Appraiser or Assistant Commissioner needs the goods are to be examined before assessment. The evaluator examines the goods as per the examination in order and then records his approval for future.

• Green Channel facility

Green channel clearance facilities have been given to some huge importers. It simply means that the clearance of goods procedure is done without the routine examination of the goods. Being an importer, you have to fill a declaration form during the time of filling the bill of entry. Then the appraisal is usually done as per normal procedure, but there would be no such physical inspection of the goods. In case, there are any specific doubts regarding the description of goods arise, the senior officers may order for a physical examination.

• Payment of duty

The charged duty can be easily paid either via checks or via TR-6 challans. Multiple Custom Houses have authorized various banks for payment of duty. It is necessary to check the name of the bank and its branch before you deposit the duty successfully. Moreover, the bank approves the payment particulars in the challan, which is then submitted to Customs for final submission.