Adherence with Regulatory & Statutory Compliances while filing of Shipping Bills with Customs Department

[YAGAY andSUN]

Filing a Shipping Bill in compliance with Customs Laws is a critical process in ensuring smooth export transactions and adhering to various legal and regulatory frameworks, such as classification, valuation, export incentives, and more. The following are key precautions and best practices exporters should observe while filing a Shipping Bill to ensure compliance with relevant Customs and trade laws:

1. Accurate Classification of Goods

• Precaution: Ensure the correct classification of goods under the Harmonized System (HS) Code. Incorrect classification can lead to penalties or rejection of the Shipping Bill.
• Compliance: Refer to the Customs Tariff Act for the correct classification of goods. Incorrect classification can also impact the eligibility for export incentives like RODTEP (Remission of Duties and Taxes on Export Products), ROSCTL (Rebate of State and Central Taxes and Levies), and other schemes.
• Tip: Seek professional help if uncertain about the HS Code to avoid misclassification.

2. Proper Valuation of Goods

• Precaution: The value of goods declared in the Shipping Bill should be accurate and based on the transaction value, ensuring transparency in the declaration of the export price.
• Compliance: The valuation must comply with Customs Valuation (Determination of Value of Goods) Rules, 2007. Under-declaring or over-declaring value can result in customs audits, penalties, and the rejection of claims for export incentives.
• Tip: Maintain documentary evidence for the transaction value such as invoices, contracts, and other supporting documents.

3. Adherence to Export Incentives (RODTEP, ROSCTL, etc.)

• Precaution: Ensure that the export goods are eligible for specific incentives like RODTEP or ROSCTL, and that you are applying for these benefits in compliance with the relevant schemes.
• RODTEP (Remission of Duties and Taxes on Export Products): RODTEP is designed to refund duties/taxes not refunded earlier. To claim RODTEP, ensure that your goods fall under the eligible categories and are exported as per the specific criteria for the scheme.
• ROSCTL (Rebate of State and Central Taxes and Levies): ROSCTL is available for export of textile products, particularly garments and apparel. Check if your products qualify and that you fulfil all the compliance requirements for this rebate.
• Tip: Double-check if the goods are covered under the export incentive schemes and that the appropriate documentation (e.g., invoices, export contract, etc.) is available.

4. Adherence to Foreign Trade Policy (FTP) Provisions

• Precaution: Ensure that the goods being exported comply with the provisions of the Foreign Trade Policy (FTP), including the eligibility for schemes like AA (Advance Authorization) and EPCG (Export Promotion Capital Goods Scheme).
• AA (Advance Authorization): Ensure that the exported goods are eligible for the AA scheme, which allows duty-free imports of inputs required for the manufacture of export goods. Compliance with export obligation timelines and conditions is critical.
• EPCG (Export Promotion Capital Goods Scheme): If claiming benefits under EPCG, ensure compliance with the requirement to export a specified quantity of goods or services and the associated conditions, such as the use of imported capital goods for manufacturing export products.
• Tip: Review the terms of the AA or EPCG authorization and ensure the goods being exported comply with their stipulations.

5. FTAs (Free Trade Agreements) and Preferential Tariffs

• Precaution: If the goods are being exported to countries with which India has a Free Trade Agreement (FTA), ensure the proper documentation is provided to avail preferential tariffs under the agreement.
• Compliance: FTAs usually require a certificate of origin to avail preferential tariff rates. This certificate proves that the goods being exported originate from India and are eligible for reduced duties in the importing country.
• Tip: Ensure that the certificate of origin is issued by a competent authority and is correctly attached to the Shipping Bill to claim preferential rates.

6. Accurate and Complete Documentation

• Precaution: Ensure all documents are properly filled and submitted with the Shipping Bill, including:
  • Bill of Lading/Airway Bill
  • Invoice and packing list
  • Certificate of Origin (if applicable)
  • Export License (if applicable)
  • Advance Authorization or EPCG Authorization (if applicable)
  • Export Obligation Discharge Certificate (EODC) (if applicable)
• Compliance: Incomplete or inaccurate documentation may result in delays, rejection of export incentives, or customs penalties.
• Tip: Regularly check the documentation requirements as per the latest updates from Customs and FTP.

7. Proper End-Use and Destination Declaration

• Precaution: Ensure that the destination country and end-use of the goods are accurately declared. This is especially important for sensitive or restricted items.
• Compliance: Ensure that any restrictions on the export of certain goods are complied with. For example, dual-use goods may require specific export licenses or prior approval from the Directorate General of Foreign Trade (DGFT).
• Tip: Verify if the goods require any export control certifications or permits before filing the Shipping Bill.

8. Timely and Correct Filing

• Precaution: Ensure that the Shipping Bill is filed within the specified time frame and that all corrections are made if there are any discrepancies in the filing.
• Compliance: Delayed filings or failure to correct errors can lead to penalties, fines, or a halt in the export process.
• Tip: Use the e-Sanchit system to submit digital copies of documents for faster processing and keep track of all deadlines to avoid delays.

9. Verification of Export Obligation Compliance (for AA and EPCG Schemes)

• Precaution: If using Advance Authorization (AA) or EPCG, ensure that the export obligation is met in terms of quantity, value, and time.
• Compliance: Failure to meet export obligations under AA or EPCG can result in the imposition of customs duties, interest, and penalties.
• Tip: Maintain accurate records of export transactions and fulfil all export obligations in a timely manner.

10. Review Changes in Customs Regulations

• Precaution: Keep updated with any amendments to Customs rules, foreign trade policies, or schemes like RODTEP, ROSCTL, and others.
• Compliance: Customs regulations and schemes may change periodically, so it’s crucial to stay informed to ensure compliance with the most current guidelines.
• Tip: Regularly check notifications and advisories issued by Customs, DGFT, and other relevant authorities.

Conclusion:

Filing a Shipping Bill with full compliance with Customs Laws requires a systematic approach, ensuring accuracy in goods classification, proper valuation, adherence to export incentives, and correct documentation. Exporters should be vigilant about the various compliance requirements under schemes such as RODTEP, ROSCTL, AA, EPCG, and FTAs, while ensuring that all regulatory frameworks are respected. By maintaining transparency, ensuring accurate documentation, and staying informed about changes in trade regulations, exporters can minimize risks and benefit from various incentives while ensuring smooth export transactions.