Export and import of goods and services are not only a source of income for the parties involved, these activities also act as a bridge between the governments of two nations. Hence, it is equally important as any other business activity. Exporting and importing also give a bigger marketplace to the producers. This is resulting in more and more people getting indulged in this activity. A lot many people wonder how to get started in this industry. What are the requirements that need to be fulfilled? You will find the process to be much easier than one can imagine. Let us go over the pre-requisites once
Getting an IEC (Importer-Exporter Code) Number- IEC contains a 10 digit business identification number which is provided by Directorate General of Foreign Trade (DGFT). Once you avail an IEC number, you are allowed to export and import beyond national boundary. Availing an IEC number is a necessity for anyone to commence export and import activities as per the Foreign Trade Policy. A service exporter-importer does not require an IEC number if they are not availing any benefits under the Foreign Trade Policy.
Obtaining a Registration Cum Membership Certificate (RCMC)-Export Promotion Councils or Commodity Boards of India issue a RCMC as a proof of DGFT membership for 5 years. You require this certificate if
1. You are dealing in restricted goods.
2. You are applying for any concession under the Foreign Trade Policy.
Risk covering through ECGC- Export Promotion Councils or Commodity Boards of India issue a RCMC as a proof of DGFT membership for 5 years. You require this certificate if Getting involved in international trade always poses the risk of non-payment because of individual or national insolvency. This risk can be covered by the buyer by getting an appropriate policy from Export Credit Guarantee Corporation Ltd. These are the basic things that you require to begin your import-export operations. Now, let us understand the process of importing or exporting between India and the USA.
1. Acquire IEC
Prior to importing from India, each business should initially acquire an Import Export Code (IEC) number from the territorial joint DGFT. The IEC is a pan-based registration of traders with lifetime validity and is required for clearing customs, sending shipments, as well as for sending or receiving money in foreign currency. The cycle to acquire the IEC enlistment takes around 10-15 days.
2. Guarantee lawful consistence under various exchange regulations
When an IEC is distributed, organizations might import products that are consistent with Section 11 of the Customs Act (1962), Foreign Trade (Development and Regulation) Act (1992), and the Foreign Trade Policy, 2015-20. Be that as it may, certain things – limited, canalized, or disallowed, as announced and advised by the public authority – require extra authorization and licenses from the DGFT and the central government.
3. Get import licenses:
To decide if a permit is expected to import a specific business item or administration, a merchant should initially group the thing by distinguishing its Indian Trading Clarification in light of a Harmonized System of Coding or ITC (HS) order. ITC (HS) is India’s chief method of classifying items for trade and import-export operations. The ITC-HS code, given by the DGFT, is a 8-digit alphanumeric code addressing a specific class or classification of merchandise, which permits the shipper to follow guidelines worried about those products.
An import permit is either a general permit or a specific permit. Under a general permit, merchandise can be imported from any nation, though a particular or individual permit approves import just from explicit nations. Import licenses are utilized in import freedom, sustainable, and ordinarily substantial for quite a long time for capital products or year and a half for unrefined substances parts, consumables, and spare parts.
4. Record Bill of Entry and different archives to finish customs clearing conventions
Subsequent to acquiring import licenses, merchants are expected to outfit import assertion in the recommended Bill of Entry alongside long-lasting record number (PAN) based Business Identification Number (BIN), according to Section 46 of the Customs Act (1962). A Bill of Entry gives data on the specific nature, exact amount, and worth of products that have landed or entered inwards in the country.
On the off chance that the products are cleared through the Electronic Data Interchange (EDI) framework, no conventional Bill of Entry is recorded as it is created in the PC framework. Be that as it may, the shipper should record a freight revelation after recommending specifics expected for handling of the section for customs leeway.
Assuming the Bill of Entry is recorded without utilizing the EDI framework, the merchant is expected to submit supporting reports that incorporate declaration of beginning, testament of examination, bill of trade, business receipt cum pressing rundown, among others.
When the merchandise are sent, the traditions authorities analyze and evaluate the data outfitted in the bill of passage and coordinate it with the imported things. Assuming there are no abnormalities, the authorities issue a ‘pass out request’ that permits the imported merchandise to be supplanted from the traditions
5. Decide import obligation rate for leeway of products:
India levies basic customs duty on imported goods, as specified in the first schedule of the Customs tariff Act, 1975, along with goods-specific duties such as anti-dumping duty, safeguard duty, and social welfare surcharge. In addition to these, the government levies an integrated goods and services tax (IGST) under the new GST system. The IGST rates depend on the classification of imported goods as specified in Schedules notified under Section 5 of the IGST Act (2017).
Similarly concerning imports, an organization wanting to take part in export is expected to acquire an IEC number from the local joint DGFT. In the wake of acquiring the IEC, the exporter needs to guarantee that every one of the legitimate compliances are met under various exchange regulations. Further, the exporter should check assuming a product permit is required, and appropriately apply for the permit to the DGFT. An exporter is additionally expected to enlist with the Indian Chamber of Commerce (ICC), which gives the Non-Preferential Certificates of Origin guaranteeing that the sent out products are originated in India.
Following this simple procedure, you can begin your journey as an importer or exporter if you wish to run your operations between India and the USA.