Every country controls the movement of goods through customs laws. In India, businesses involved in international trade must follow customs compliance rules. These rules cover documentation, tax payments, classification of goods, and adherence to restrictions. Proper customs compliance avoids shipment delays, extra costs, and even legal disputes.
Core Requirements of Customs Compliance 🏦
1. Registration with IEC 📝
No import or export activity is possible without an Import Export Code (IEC) issued by DGFT. It serves as a unique identification for businesses in international trade.
2. Submission of Key Customs Documents 📂
Customs authorities require specific documents:
-
Bill of Entry (for imports) confirms details of goods brought into India.
-
Shipping Bill (for exports) provides details of goods being shipped out.
Both documents must match invoices and packing lists.
3. Payment of Customs Duties 💳
For imports, duties such as Basic Customs Duty (BCD), IGST, Anti-Dumping Duty, and other surcharges must be paid. Exports are generally duty-free, but GST compliance applies through LUT filing or refund claims.
4. Product-Specific Approvals ⚖️
Some items need extra clearances:
-
FSSAI approval for food items 🍴
-
Drug Controller permission for medicines 💊
-
BIS certification for electronics and appliances ⚡
5. Correct Valuation and Classification of Goods 📦
The HSN code system is used to classify goods. Declaring the right code and value ensures the correct duty rate. Any misclassification can lead to fines or confiscation.
6. Record Maintenance and Reporting 📚
Businesses must keep all customs-related documents, including duty challans, invoices, and bills, for at least 5 years. Authorities may call for audits to check compliance.
Customs Compliance Snapshot 📊
| Requirement | Import Side | Export Side |
|---|---|---|
| IEC Code | Mandatory | Mandatory |
| Main Document | Bill of Entry | Shipping Bill |
| Taxes & Duties | BCD, IGST, surcharges | GST refund/LUT |
| Special Approvals | FSSAI, BIS, Drugs | RoDTEP, DGFT benefits |
| Record Keeping | 5 years | 5 years |
Conclusion 🏁
Customs compliance is more than just paperwork—it is the legal backbone of global trade. By ensuring IEC registration, proper documentation, duty payment, and special approvals, businesses can avoid penalties and build trust with customs authorities. Following these rules helps goods move smoothly across borders and supports long-term business growth.