All You Need To Know About Import Good In India
In recent times, we have seen major growth in the export and import of goods and services in India. Seeing this change, more and more entrepreneurs or startups are venturing into this area. But many jump in without weighing the pros and cons and rather than laughing their way to the bank, it turns into a nightmare experience.
First and foremost, you must have a business setup. It is recommended you open a sole proprietorship in the initial stage by taking a Service Tax registration or a VAT registration with an attractive name and logo.
1.Obtain a PAN card for the business
Once you have received the required registration, it is mandatory to have a PAN card issued by the Income Tax Department.
2. Open a current account
After receiving your business registration and PAN card, you need to open a current bank account with any commercial bank exclusively for your business.
3. Get the Import Export Code (IEC) issued
This is one of the most important requirements to get your import and export business started. IEC is required in all cases except in case of restricted or prohibited goods or services.
Import Export Code (IEC) registration can be obtained by applying online at the DGFT website.
4.Documents Required for Import Export Code (IEC):
- Personal PAN card or Company PAN card
- Applicant’s photograph
- Copy of a canceled cheque from the business’ current account
A PAN card is mandatory to get an IEC code and only one IEC is allotted per PAN card.
5.Obtaining the Registration cum Membership Certificate (RCMC)
After obtaining the IEC, you need to obtain an RCMC, granted by the concerned Export Promotion Councils to get authorization to import and export, or for any other benefit.
There are around 26 export promotion councils from where you can get an RCMC issued.
After getting the IEC and RCMC issued, you can set up your import and export business from India. The IEC and RCMC issued is valid for all branches or business premises across India, and it takes only between five and seven days to get all the registrations done.
Import Policy
The Indian Trade Classification (ITC)-Harmonized System (HS) classifies goods into three categories:
- Restricted
- Canalized
- Prohibited
Goods not specified in the above-mentioned categories can be freely imported without any restriction if the importer has obtained a valid IEC. There is no need to obtain an import license or permission to import such goods. Most of the goods can be freely imported in India.
Licensed (Restricted) Items
Restricted items can be imported only after obtaining an import license from the relevant regional licensing authority. The goods covered by the license shall be disposed of in the manner specified by the licensing authority, which should be clearly indicated in the license itself. The list of restricted goods is provided in ITC (HS). An import license is valid for 24 months for capital goods, and 18 months for all other goods.Canalized Items
Canalized goods are items that may only be imported using specific procedures or methods of transport. The list of canalized goods can be found in the ITC (HS). Goods in this category can be imported only through canalizing agencies. The main canalized items are currently petroleum products, bulk agricultural products, such as grains and vegetable oils, and some pharmaceutical products.Prohibited Items
These are the goods listed in ITC (HS) which are strictly prohibited on all import channels in India. These include wild animals, tallow fat and oils of animal origin, animal rennet, and unprocessed ivory.Will every purchase attract import duty?
No, you can import goods worth Rs 2000 duty-free. Furthermore, this duty exemption is bumped up to Rs 10,000, provided the item is marked as a "gift".
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