Custom clearance process India

Prerequisite: Core Registration & Compliance

Before any goods can be cleared for import or export, your business must have these mandatory registrations in place:

• Import Export Code (IEC): A unique 10-digit code issued by the Directorate General of Foreign Trade (DGFT). This is mandatory for every person or entity involved in import or export activities.

• GST Registration: Required for filing GST-compliant invoices and claiming benefits like Integrated Goods and Services Tax (IGST) refunds on exports.

• ICEGATE Registration: Registration on the Indian Customs Electronic Data Interchange Gateway is essential for the electronic filing of all necessary documents (Shipping Bills and Bills of Entry).

• Customs Broker (CHA) Appointment: While you can self-file, appointing a licensed Customs House Agent (CHA), or Customs Broker (CB), is highly recommended. They are experts in HSN classification, valuation, and dealing with customs queries.

🚢 Part 1: The Import Clearance Process

Import clearance begins the moment a vessel or aircraft submits its manifest detailing the cargo arriving in India.

Step 1: Arrival & Manifest Filing (IGM)

The carrier (shipping line or airline) files the Import General Manifest (IGM) with Customs, listing every consignment on board. This electronically notifies Customs of the goods’ arrival.

Step 2: Filing the Bill of Entry (BoE)

The importer or the CHA electronically files the Bill of Entry (BoE) via the ICEGATE portal. This is the official declaration document for the imported goods and is usually filed before the vessel’s arrival for faster processing.

The BoE requires detailed information, including:

• HSN Code (8-digit classification).

• Correct Customs Valuation.

• Claim for any import duty benefits.

Step 3: Assessment & Duty Payment

The Customs EDI System utilizes the Risk Management System (RMS) to assess the BoE.

• Facilitated Clearance: Low-risk consignments are automatically assessed and cleared without human intervention.

• Physical Examination: High-risk or randomly selected consignments are routed for physical inspection by a Customs Officer to verify the contents, quantity, and valuation against the declared BoE.

Once assessed, the duty (Basic Customs Duty + IGST + Cess) is calculated. The importer or CHA pays this duty electronically.

Step 4: Examination & Out-of-Charge (OOC)

After duty payment and successful completion of any required examination, the Customs Officer issues the Out-of-Charge (OOC) order. This is the final legal permission for the goods to be moved from Customs custody to the importer’s control.

✈️ Part 2: The Export Clearance Process

Export clearance is mandatory for goods leaving the country to ensure correct classification, valuation, and eligibility for any government benefits.

Step 1: Carting & Customs Examination

The exporter or CHA presents the cargo at the Custom Freight Station (CFS) or port/airport and files the Shipping Bill (SB) electronically via ICEGATE. The SB is the primary document for export clearance.

Step 2: Assessment & Query Resolution

Similar to imports, the Customs system assesses the SB based on the details provided:

• Classification: Verification of the HSN Code.

• Valuation: Check of the declared Free on Board (FOB) value.

• Scheme Verification: Eligibility for benefits like Duty Drawback or IGST Refund.

If discrepancies are found, a query is raised to the CHA, who must resolve it quickly by providing additional documents or clarifications.

Step 3: Let Export Order (LEO)

Once the Customs Officer is satisfied with the documentation and any physical examination, they grant the Let Export Order (LEO). This is the final authorization to load the goods onto the intended vessel or aircraft.

Step 4: Loading & Export General Manifest (EGM)

After the LEO is granted, the goods are physically loaded. The carrier then files the Export General Manifest (EGM), finalizing the customs export record. The Shipping Bill is now the proof of export, enabling the exporter to claim all eligible benefits.

📝 Mandatory Documentation Checklist

Accuracy across all documents is non-negotiable. The two core documents (BoE for Import, SB for Export) must be supported by:

Conclusion: Compliance is Your Competitive Edge

Navigating Indian Customs successfully requires proactive compliance and meticulous attention to detail. Any error—from a wrong HSN code to a discrepancy in the Packing List—will cause delays and lead to penalties.

By engaging a knowledgeable Customs Broker and ensuring your documentation is perfect the first time, you turn a potential roadblock into a smooth gateway for your international trade.