Import & Export Procedures

Import and export procedures form the backbone of India’s international trade framework. These procedures ensure smooth movement of goods across borders, maintain national security, regulate the economy, and facilitate compliance with customs law. The legal structure governing these procedures primarily arises from the Customs Act, 1962, the Foreign Trade (Development and Regulation) Act, 1992, various notifications issued by the Directorate General of Foreign Trade (DGFT), and international trade agreements. For law students, understanding these procedures is crucial as they involve a mix of administrative law, taxation, and international trade principles.

Contents

Import & Export Procedures Import Procedures Export Procedures Role of Customs in Import & Export Control Conclusion

Foreign trade operates through highly structured compliance steps—from obtaining licenses to filing declarations, completing assessments, paying duties, and ensuring smooth clearance. Courts have also played a vital role in shaping the contours of customs procedures. In Collector of Customs v. Gopal Krishna, the Supreme Court highlighted the importance of accurate declarations and strict adherence to customs rules. Similarly, in Union of India v. Sampat Raj Dugar, the Court clarified that goods imported contrary to licensing conditions can be confiscated even if the importer did not intend to violate the law. These decisions reflect how procedural compliance is not a formality but a legal obligation in the import-export framework.

Import Procedures

1. Obtaining Importer Exporter Code (IEC)

Any entity wishing to import goods must first obtain an Importer Exporter Code from DGFT. This is a mandatory, unique 10-digit number without which imports cannot be legally undertaken. IEC is essential not only for customs clearance but also for international banking transactions. The courts have recognized the IEC as a statutory requirement and not a mere administrative formality.

“Tip: Without a valid IEC, no import transaction can lawfully proceed—always verify its status before initiating trade.”

2. Classifying the Goods Under HSN/CTH

Goods must be classified under the Harmonized System of Nomenclature (HSN) or the Customs Tariff Heading (CTH). Accurate classification determines:

applicable customs duty
import restrictions
licensing requirements

Incorrect classification may lead to penalties. In HPL Chemicals Ltd. v. Commissioner of Central Excise, the Supreme Court held that when classification is ambiguous, the burden of proof lies on the customs department, reinforcing that classification must follow legal standards.

3. Assessing Import Licensing and Restrictions

Certain goods require import licenses, quarantine clearance (like live animals, seeds), or compliance with safety standards. Goods prohibited under DGFT notifications or EXIM policy cannot be imported. If imported in violation of restrictions, Section 111 of the Customs Act permits confiscation.

4. Filing the Bill of Entry

This is a crucial document filed electronically on the ICEGATE portal for customs assessment. It contains details such as value, classification, country of origin, and duty calculation. The Bill of Entry can be:

Home Consumption
Warehousing
Ex-Bond Clearance

The Supreme Court in Collector of Customs v. Sanjay Chandiram emphasized that incorrect or false declarations in the Bill of Entry attract penalties under Section 112.

5. Customs Assessment and Examination

Under Section 17 of the Customs Act, goods are assessed to verify:

value
classification
duty
compliance with law

Officers may inspect goods physically or rely on automated risk-based systems (RMS).

“Tip: Ensure documents and invoices match exactly with shipment details to avoid delays during assessment.”

6. Payment of Customs Duties

Duties typically applicable include:

Basic Customs Duty (BCD)
IGST
Social Welfare Surcharge
Anti-dumping duty (if applicable)

Duties must be paid before the goods can be cleared for home consumption.

7. Out-of-Charge Order & Delivery

Once duty is paid and compliance is verified, the customs officer issues the Out-of-Charge Order, allowing the importer to take delivery.

Export Procedures

1. Obtaining IEC and Export Registration

As with imports, exporters must also have a valid IEC. Additionally, certain exports require registration with Export Promotion Councils for claiming benefits under various schemes.

2. Classifying Goods for Export

Though export duties are limited in India, accurate classification under HSN is required to verify:

export restrictions
licensing
export benefits

“Tip: Refer to the latest DGFT notifications for updated restricted and prohibited export items.”

3. Checking Export Restrictions and Licensing

Under the EXIM policy, some items require export licenses—for example, medicines, live species, antiques, and defense equipment. Exporting restricted goods without permission may lead to confiscation under Section 113.

4. Filing the Shipping Bill

A Shipping Bill is the primary export document filed on the ICEGATE portal. It includes:

SKU details
value
destination country
HS code
export incentives claimed

Shipping Bills are essential for claiming GST refunds and export promotion schemes like MEIS/RODTEP.

5. Customs Examination and Clearance

Customs officers verify goods to ensure accuracy of declarations and verify compliance with export laws. Physical inspection may not be required for low-risk shipments.

6. Loading & Departure

After receiving the Let Export Order (LEO), goods can be loaded onto the vessel or aircraft. LEO signifies customs clearance for export.

7. Realization of Export Proceeds

Export earnings must be realized within the period prescribed under FEMA regulations. Failure to bring foreign currency back to India may lead to penalties.

Role of Customs in Import & Export Control

The Customs Act gives officers significant authority to regulate trade. They may:

inspect goods (Section 17)
confiscate prohibited imports/exports (Sections 111 & 113)
impose penalties (Section 112)
arrest in cases of serious violations (Section 104)

In Collector of Customs v. D. Bhoormull, the Supreme Court held that customs may rely on circumstantial evidence for confiscation proceedings, as smuggling cases often involve clandestine activities.

Customs also coordinates with agencies such as:

DGFT
DRI (Directorate of Revenue Intelligence)
FSSAI
Plant and Animal Quarantine departments

This multi-agency framework ensures lawful, secure, and efficient international trade.

Conclusion

Import and export procedures form an essential framework for regulating international trade under Indian law. From obtaining IEC to filing declarations, paying duties, and securing clearance, each step involves detailed statutory compliance. Judicial interpretation further strengthens procedural integrity, ensuring fairness and preventing misuse. For law students, mastering these procedures offers deep insight into customs law, administrative law, and India’s position in global commerce.

Also Read: How to Improve Memory for Law Studies: 8 Proven Techniques for Law Students

Import & Export Procedures