There are numerous legal procedures and document filling that must be followed to ensure a seamless process while importing products into any country.
The Bill of Entry (BOE) is one such important document. Before the arrival of the imported products, importers or customs clearance agents must file BOE. When the BOE is filled, it enables the importer to claim Input Tax Credit (ITC) on the products. The BOE is submitted to the Customs department as part of the customs clearing process.
The BOE, which includes crucial information such the bond number and the date of issuance, can be issued for domestic use or bond clearance. The purpose of this article is to give importers and exporters with a thorough manual on how to run a profitable business by examining the types of bill of entry definitions, and documentation needed for a Bill of Entry.
What is Bill of Entry?
A Bill of Entry is filed by the importer or the customs agent on the arrival of the goods. It is a legal document that contains crucial information about the goods being imported.
The Bill of Entry may be issued for the clearance of bonds or for household goods. The importer must pay taxes such the GST, IGST, and custom duty after the customs officer has examined the relevant goods following the filing of the BOE. The importer can only claim Input Tax Credit (ITC) on the products after the Bill of Entry is issued, which is when these taxes are paid to clear the items.
Why is the Bill of Entry Important?
A Bill of Entry provides the following benefits:
- It allows importers to provide important consignment details to customs authorities. And it helps the custom officers to keep a track of goods imported and maintain a record.
- BOE ensures that no illegal commodities have been imported.
- BOE helps the authorities to in cross-checking documents that have been submitted by the export business during export or shipping. This eliminates any chance of discrepancies.
- Bill of entry makes the taxation process transparent avoiding any malpractices by the customs office.
Who Needs to Issue Bill of Entry?
Those who should issue bill of entry are:
- Businesses that import goods from other countries.
- companies that buy goods from SEZ and sell them in India.
Customs Clearance Procedure
A customs officer inspects the commodities after the BOE is turned in, and the importer then pays all applicable taxes, including GST, IGST, and customs duty. The importer can then apply for ITC for GST and IGST. Importers cannot, however, seek compensation for customs duties.
Process in Bill of entry payment includes
- Filling out the form
- Custom officers inspect the goods and examins all the details
- The importer is now supposed to pay the duty to claim ITC
Suggested Read: How to Take Advantage of the RoDTEP Scheme as an Exporter
Types of Bill of Entry
A Bill of entry is categorized into three types based on the purpose and nature of commodities:
1. Bond Bill of Entry
When the importer is not interested in paying import duties at the time of import, he keeps the products in a warehouse until his Customs has received payment in full. This type of bill is called bond Bill of Entry. Though it is also known as the Bill of Entry for Warehousing.
2. Bill of Entry Household Consumption
This is for goods that the importer will purchase for personal use or for use in particular commercial operations.
3. Bill of Entry for Ex-Bond Goods
A BOE for Ex-Bond Goods is issued when the importer has to release goods from the warehouse and overrides the BOE for Warehousing.
Documents Required for Bill of Entry
Importers are supposed to present duplicate copies and photocopies of all relevant documents and a draft of the BOE, along with GSTIN, to file a BOE with customs.
Let’s see the list of things that a BOE must include
Components of Bill of Entry
Importer Details
Details like name, address and contact details of importer like phone number, email, and GSTIN.
Consignment Details
Details like the quantity of goods, description of goods or value. It might also include details like packaging, marks, and numbers on the packages.
Invoice Details
Invoice details like invoice number, date of issue, and the currency used in the transaction.
Shipping Details
Here, information like shipping vessel details, arrival date and port is included.
Customs Details
This section includes details related to customs clearance, like customs tariff, duties and taxes and the mode of transport.
Declaration
A declaration by the importer or customs agent that all the information provided in the document is true and accurate to the best of their knowledge. It also includes their signature (as both parties sign the bill)and date.
Here is a full list:
- Port code and licence number
- Importer’s name and address
- Customs house agent code
- Import export code (IEC)
- Country of origin and its code
- Country of consignment and its code
- Port of shipment
- Vessel’s name
- Description of the goods
- Quantity of the goods
- Value of the goods
- Harmonized System of Nomenclature (HSN) code of the goods
- Currency in which the goods are valued
- Freight charges
- Insurance charges
- Other charges, if any
- Assessable value
- Rate of duty
- Amount of duty payable
- Integrated Goods and Services Tax (IGST) payable
- Payable GST(Advantages and Disadvantages of GST: Updated)
- Compensation cess payable
- Declaration of the importer or their agent
- Signature of both the importer and customs agent
How to file a Bill of Entry?
Filling a Bill of Entry is quite easy, all you have to do is follow these easy steps, let’s see
- Step 1: Gather all important documents – Obtain all relevant documents like bill of lading, packing list, and other customs-related documents.
- Step 2: Determine the type of Bill of Entry: Identify the type
- Step 3: Assess the value of the goods – Determine the value of the goods being imported to calculate the customs duty payable.
- Step 4: Prepare the Bill of Entry – Draft the BOE, which includes details of the imported goods, the importer’s details, and the customs duty payable.
- Step 5: Submit the Bill of Entry
You could use Electronic Data Interchange (EDI) portal to submit BOE. All you have to do is visit the Indian customs EDI system website and submit the BOE with all the other required documents.
Conclusion
The bill of entry plays a crucial role in the import process. It helps the custom authorities to monitor and keep a check on the inflow of goods and collect appropriate taxes while avoiding malpractices. It also becomes important that importers understand different types of Bill of Entry to avoid any discrepancies. The system of BOE promotes transparency an it contributes to the overall economic welfare of the nation.
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FAQs
1. What is a bill of entry?
When importing products, importers or customs clearance agents must file a bill of entry As part of the customs clearance process, it is delivered to the Customs department. After completing this, the importer would be able to submit an ITC claim for the items.
2. What is the difference between bill of entry and bill of lading?
A bill of lading is merely documentation that goods have been loaded through air or sea. A bill of entry is nothing more than an authenticated document that the customs officials provide during the clearing of goods, whether it be for import or export.
3. What is the content of the bill of entry?
Bill of entry has a fairly simple format, it include details like Port code and license number, Importer’s name and address, Customs house agent code, Importer’s export code (IEC), Country of origin and its code, Country of consignment and its unit code, Port of shipment, Vessel’s name, Description of the goods, Quantity of the goods, Value of the goods etc.
4. What is the Colour of bill of entry?
There are 3 different kinds of Bills of Entry with distinct colours
- Bill of Entry for Home-consumption- White Colour
- Bill of Entry for Warehousing- Yellow Colour
- Ex-Bond Bill of Entry for Clearance- Green Colour
