Are businesses subject to specific compliance requirements for undertaking import and export in India?

The compliance requirements for undertaking import and export transactions may vary on a case-to-case basis. According to Economic Laws Practice, apart from regular compliances such as obtaining Importer Exporter Code (‘IEC’), Goods and Services Tax (‘GST’) registration, ICEGATE registration, it is also essential to consider the following in case of import or export of goods sold into/from India:

• Import license as per the Indian Tariff Classification (Harmonised System) (‘ITC(HS)’) Import Policy
Import of goods into India are generally classified as ‘free’, ‘restricted’ or ‘prohibited’ as per the ITC(HS) Import Policy. In cases where imports are classified as ‘restricted’, an authorisation/license or permission is required.

• Bureau of Indian Standards (‘BIS’) registration

In order to import certain specified goods into India it is mandatory to conform to the specified Indian Standard. Manufacturers of these goods (even if located outside India with no presence in India) are required to apply for registration from BIS after getting their product tested from BIS recognized labs.

• Extended Producer Responsibility Certificate under E-Waste Rules

Extended Producer Responsibility (‘EPR’) is the responsibility of every producer of certain specified electrical and electronic equipment (‘EEE’) to channelize e-waste to an authorised dismantler / recycler to ensure environmentally sound management of this waste. EPR authorisation is mandatory and has to be obtained by all importers subject to exceptions granted.

• Legal Metrology License

Under Legal Metrology Act 2009, registration is required for importing packaged commodities which are meant for distribution or sale and for importing weights and measures.

• Export license as per ITC(HS) Export Policy including SCOMET license 

The Export Licensing Schedule lists out various goods and sets out the export policy regime applicable to certain goods. This is based on whether these goods are either prohibited / restricted / free to be exported.. This also covers the SCOMET list. The SCOMET list is a single, unified control list of all dual use items. This list (set out under Appendix 3 to Schedule 2 of India’s Export Policy) contains dual-use items and technologies classified in 8 Categories.

2. What are the practical steps / broad checklist that importers and exporters should be aware of in light of the various import / export compliance requirements?

The broad checklist in case of import/export of goods is as follows:

• Whether necessary registrations such as IEC, GST, ICEGATE have been obtained?

• Whether the imported products are ‘freely’ importable, ‘restricted’ or ‘prohibited’?

• Have they filed an application for import license, where applicable?

• Whether the imported goods require BIS registration. If yes, then the process of registration should ideally commence 2 to 3 months prior to importation

• Whether Legal Metrology Packaged Commodity (LMPC) certificate for sale or distribution of pre-packaged commodity has been obtained?

• In case of import of weights and measures, whether the certificate of registration has been obtained?

• Whether the imported goods require an EPR Certificate? If yes, whether an application is made to Central Pollution Control Board?

• In case of goods or services which are part of the SCOMET list, what are the key aspects to be analysed?

– Examining the category of the SCOMET list under which the products would be covered

– In case of export of services, whether a SCOMET license is required, e.g., R&D services

– Estimating the quantum of goods which will require SCOMET license

– Whether the exporter should opt for normal license or Global Authorisation for Intra Company Transfer (‘GAICT’) in case of intra Company tranfers?

• Whether goods are imported/exported from/to related parties?

• Whether there are any benefits availed on import or export of goods?

• Whether the imported goods are ‘second hand’ goods, in which case there are additional requirements?

3. What are the special provisions and procedures for determination and acceptance of transaction value of goods in case of import from related parties. 

In case of sale between related parties, the Special Valuation Branch (‘SVB’) of the Customs investigates whether the value of goods imported by a related party in India is influenced by the relationship between the parties.

Every importer while filing the Bill of Entry should make a declaration in Annexure A on whether the seller of imported goods is related parties as defined under Rule 2(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007.

If the Commissioner refers the case to SVB, the proper officer at SVB will carry out the investigation and seek further information in Annexure B from the importer.

Till the time the SVB investigation is pending, the importer can continue importing goods under a provisional assessment. Once the SVB investigation report is issued, the process of finalization of provisional assessment would be initiated.

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